Treasurer's Duties

By-Laws - Article IV - Officers - 5 - Treasurer:

"The Treasurer shall have custody of all property of the ASSOCIATION, including funds, securities and evidence of indebtedness. He shall keep the books of the ASSOCIATION in accordance with good accounting practices and he shall perform all other duties incident to the office of Treasurer."

By-Laws - Article IV - Officers - 7 - Books and Records:

"The books, records and papers of the ASSOCIATION shall at all times, during reasonable business hours, be subject to inspection by any member. The Declaration of Restrictions, Articles of Incorporation and the By-Laws of the ASSOCIATION shall be available for inspection by any member at the principal office of the ASSOCIATION where copies may be purchased at reasonable cost."

By-Laws - Article V - Assessments - 2:

"When the Board of Directors has determined the amount of any assessment, the Treasurer of the ASSOCIATION shall mail or present to each lot owner a statement of said lot owner's assessment. All assessments shall be payable to the ASSOCIATION and, upon request, the Treasurer shall give a receipt for each payment made to him. Any assessments which are not paid when due shall be delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the date of delinquency, at l0% per annum and the ASSOCIATION may bring an action at law against the owner personally obligated to pay the same or foreclose the lien against the property, and interest, costs, and reasonable attorneys' fees with respect to any such action shall be added to the amount of such assessment. No owner may waive or otherwise escape liability for the assessments provided for herein by non-use of facilities or services provided or abandonment of his lot."

In 2003 the board of directors decided it was time to keep the books of the Association using a computer based accounting package rather than a manual system. The board asked me if I would be willing to use my computer expertise to set up the system and if and when a vacancy occurred on the board, become treasurer. I agreed that I would and when a board member sold his home and moved out of the community I was appointed by the board to serve the remainder of his term and was elected treasurer.

The manual system was used throughout the remainder of 2003 but a computerized version operated in parallel for the second half of the year. The board agreed to purchase a computer system and appropriate accounting software.

After consideration, I proposed that the software be installed on my computer as I would prefer to do that than have two computers at home and so it was agreed. QuickBooks Professional was the application chosen.

Once the transition from a manual to a computer system was complete the set up was reviewed by an independent CPA and determined to be in line with good accounting practices as required by the Association By-Laws.

The following is the process currently followed by me during the financial year.



Once the assessment mandated in the By-Laws has been determined the treasurer receives payments from homeowners. This is almost always by the homeowner placing a check in the special mailbox installed inside the front porch of the treasurer's home. A small percentage of checks arrive in the mail from homeowners who are not full time Florida residents.

Assessments are due on the first of each month and homeowners choose the frequency of their payments. Some make an annual payment in January; others make monthly payments and still others pay two, three or six months at a time. Although the By-Laws determine delinquency to begin after 30 days our practice is to allow 90 days as payment patterns can vary from month to month.

Our accounting system is cash based meaning that we record income at the time it is received.

When a homeowner sells their property the treasurer provides a statement of assessments paid and the seller and buyer reconcile any pre-paid assessment at closing.

Whilst the By-Laws allow for members to request a receipt for their payment, no homeowner has currently made such a request, therefore, receipts are not generated.

Recording Income and Bank Deposit

The check number, date, name and address of the homeowner are recorded in QuickBooks. Since not all checks arrive on the first of the month, they are usually held and batched together before a bank deposit is made. Deposits usually occur on or around the second Monday in the month. Some homeowners, despite being reminded that assessments are due at the beginning of the month, still present their checks near the end of the month! This results a second bank deposit being made usually around the 29th of the month.

Chart of Accounts - Income/Expense

We classify income as either Ordinary Income or Other Income.

Ordinary Income is that which we expect to use to meet expenses that will occur within the financial year. Other Income is the money collected as part of the monthly assessment that we set aside the meet expenditure that will occur in a succeeding financial year. For example, painting the outside of the homes is not an annual expense, therefore, the money collected to meet that expense is classified as Other Income and shown separately on any financial statements presented by the treasurer.

Ordinary Income is held in a checking account; Other Income is held in an interest bearing account.

Expenses are similarly classified as Ordinary and Other when presented.

Ordinary Expense categories have been established in order to provide an easy way to understand where the money is being spent and give a historical base for determining future assessments. The categories are somewhat aligned with the various committees that oversee the management of our Association.

Making Payments

Payments are made when invoices are received. There are two types of invoices.

The first as a result of a monthly contract entered into by the board such as the invoice from Comcast for supplying our cable TV service and utility companies for the services they provide. These invoices are usually sent directly to the treasurer.

The second type of invoice is usually for a different amount with each invoice. These could be for repairs to the sprinkler system or ad hoc expenses approved by the board or committee chairman. These invoices are sent to the committee chairman for approval before being passed to the treasurer for payment.

In either case, when an invoice is received by the treasurer, the invoice number, date, payee and amount are recorded in QuickBooks and a check printed from QuickBooks.

Check stock is in three parts:

  1. The check
  2. The invoice number and breakdown of the line items shown on the original invoice attached to the check an sent to the vendor
  3. A duplicate of the second part

The original invoice and the third part of the check stock are attached to each other and filed by the treasurer in check numerical order by month.

Checks are mailed to vendors usually within seven days of receipt by the treasurer. It depends mainly on when the weekend occurs!

LATE and PAST DUE Statements

An extract from our By-Laws:

"Any assessments which are not paid when due shall be delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the date of delinquency, at l0% per annum."

Monthly assessments are due on the first of the month.

Since we are a small self-managed community the board of directors has agreed that penalties and interest will only be added to delinquent accounts that are ninety days past due.

Here's an example showing the steps of the agreed process:

  1. 1st of month 1: payment due.
  2. End of month 1: no payment received.
  3. 1st of month 2: next payment due.
  4. Middle of month 2: no payment received.
  5. Middle of month 2: treasurer reminds homeowner that payment is overdue.
  6. End of month 2: no payment received.
  7. 1st of month 3: next payment due.
  8. Middle of month 3: no payment received.
  9. Middle of month 3: treasurer sends Late Statement to homeowner.
  10. End of month 3: no payment received.
  11. End of month 3: a late fee and interest is added to the delinquent account.
  12. End of month 3: treasurer sends Past Due Statement to homeowner.
  13. The Past Due statement includes the following charges based on a $240.00 monthly assessment:
    • $25.00 late fee
    • $  6.00 interest for unpaid month 1 (Example: $240 × 10% ÷ 12 = $2 × 3)
    • $  4.00 interest for unpaid month 2
    • $  2.00 interest for unpaid month 3
  14. 1st of month 4: next payment due.
  15. End of month 4: no payment received.
  16. End of month 4 and each following month: interest is added to the delinquent account amount due, until payment is received in full.

Bank Statements

The treasurer receives statements from the bank after the last day of each month. These statements are used to reconcile the income and expense payments recorded in QuickBooks and then filed in a binder held by the treasurer.

Monthly Report

The treasurer presents a monthly report to the board. The report is printed from QuickBooks and currently includes:

  • Balance Sheet
  • Year to Date Income and Expense Summary compared to budget
  • Current month Income and Expense Detail compared to budget
  • List of checks written during the month

Additional reports can be made available to committees showing expenditure over a period of time.

Audit Committee

The President of the Association appoints the chairman of the Audit Committee and the chairman appoints a number of homeowners to serve on the Audit Committee. A board member may not serve as chairman or be a member of the Audit Committee.

The purpose of the Audit Committee is to review the expenditure authorized by the Board of Directors and to be satisfied that Association funds are being used in the best interest of the members.

At the end of each quarter the treasurer provides the Audit Committee with a set of reports similar to those presented to the board but covering the three month period plus a copy of the budget showing for the remainder of the year. In addition, the chairman receives a copy of the bank statements.

The chairman arranges an Audit Committee meeting attended by the treasurer and the accounts are reviewed. Bank records and filed invoices are available for inspection at the meeting.

The chairman prepares a report of the meeting for the board.

Finance Committee

The treasurer is the chairman of the Finance Committee comprising the Officers of the Association and the chairman of the Audit Committee.

Historically, the Finance Committee met to assist the treasurer in preparing the budget for the following year which would then be presented to the board for discussion.

Following the transition to a computer based system, the accounting software is now able to provide the information for discussion by the board and the Finance Committee is inactive.


At the end of September each year the treasurer prepares a budget report based upon the actual expenditure during the first nine months and the anticipated expenses for the rest of the year.

The report includes the increase expected for the following year due to contracts already in agreement plus increases due to inflation and economic factors.

At the October board meeting board then add line items for improvements in the community facilities and refine the budget. Revisions are made and the budget presented for approval at the November board meeting.


It is good practice to make back-up copies of computer based records. This is done regularly with a copy being stored on-line with Iron Mountain - a company specializing is providing secure backup facilities to various industries. The annual charge for this service is currently around $100 per year.


The President, Vice President and Secretary are all authorized to sign checks in the absence of the Treasurer.

When the Treasurer is out of town for an extended period, the checkbook is left with the Secretary in case there is a need to obtain funds.

If the Treasurer is absent at the beginning of the month then a deputy is appointed to retrieve assessment checks from the mailbox, manually record them and make a bank deposit. The accounting software will be updated when the Treasurer returns.

The Audit Committee requested that the treasurer review the internal controls and asked that the board consider the need for more than one signature on checks, the need for fidelity bond and other controls.

A review was held and independent advice sought from two separate CPAs and the manager of the Mercantile Bank.

The minutes of a board meeting record the outcome of this exercise which I understand to be as follows:

  • A fidelity bond would not be a cost effective expense for the Association
  • If two signature per check were required by the Association the bank stated that every check would need two signatures irrespective of the amount but that the number of checks per month and the control of invoices already in place did not warrant more than one signature per check
  • The bank was prepared to mail a second copy of the bank statements to a named party other than the treasurer but the fact that they were being provided to the Audit Committee chairman was deemed adequate. (Nov. 2010 update: The minutes of the board meeting 9/14/2010 record a motion to provide copies of the bank statements to the board. This was amended at the 11/9/2010 board meeting to read that the bank be requested to send copies of bank statements to both the treasurer and the president.)
  • Arranging for assessments to be received by someone other than the treasurer was deemed unnecessary for our community of 49 homes
  • The current method of collecting assessments was working with no complaints from homeowners or the treasurer


Other Income is defined as money being accrued for designated expenses outside the current financial year. Such income is being held in reserve.

We have two types of reserve a General Reserve and a Designated Reserve.

The General Reserve is increased at the end of the financial year when the Ordinary Income exceeds the Ordinary Expense and decreased when the opposite is true. It is held by the Association to meet insurance deductibles, unforeseen (unbudgeted) emergency repairs, replacement of worn out community property and other expenses at the discretion of the board of directors.

An amount equal to 20% of the annual budget is considered to be an adequate General Reserve.

The Designated Reserve is increased as deemed necessary by the board during the budget discussions. Currently we have designated funds for:

  • Paint and Roofs
  • Irrigation
  • Pool and Spa

Year End

At the end of the financial year the treasurer prepares a set of reports for the board and the Audit Committee and provides a copy of the books to an independent CPA for review. The CPA is also provided with a copy of the year end bank statements and any 1099-INT statements needed for the preparation of the Association's Income Tax Return which is signed by the treasure and then mailed to the IRS.

The CPA reviews the books to ensure the income and expenses are correctly recorded and that the bank accounts are reconciled. Transactions to and from the reserve accounts are reviewed and the board meeting minutes checked to ensure such transaction had board approval. A final report is sent by the CPA to the treasurer who then presents it to the Annual Meeting of the Association.

By-Laws - Article IV - Officers - 1 - Executive Officers:

"The executive officers of the ASSOCIATION shall be a President, who shall be a director, a Vice President, a Treasurer, a Secretary and an Assistant Secretary, all of whom shall be elected annually by the Board of Directors and who may be removed by vote of the directors at any meeting. Any person may hold two or more offices except that the President shall not also be the Secretary or an Assistant Secretary. The Board of Directors shall from time to time elect such additional officers and designate their powers and duties, as the Board of Directors shall find to be required to manage the affairs of the ASSOCIATION."

Thus the Treasurer is accountable to the Board of Directors and not to any individual member.

This paper respectfully presented to the board of directors in March 2010 by Fred D. Crane, Treasurer.