A budget is only as good as what it was told. This is the complete list of what to tell it: every check that should happen before a single number gets typed. Work the list with the documents open, and the draft that follows starts from the year instead of from last year.
(The narrative version, with what each miss costs, is Seven Inputs Your HOA Budget Ignored. This page is the working superset.)
The six families
Income
- New offsetting income identified. Any lease, antenna, fee, or interest source that did not exist last year is in the draft.
- Existing income falling or ending. Every income source confirmed against its contract: amount, escalator, end date. A lease that ends in October funds ten months, not twelve.
Projects and one-offs
- Planned major repairs or replacements listed, each with its funding source (operating, reserves, or special), before the season decides for you.
- This year's non-recurring costs flagged. The storm repair, the lawsuit, the special project: identified so they do not roll into next year's baseline.
Debt
- Loans reaching final payment, with the month. Draft versus amortization schedule, to the month, every loan.
- New borrowing or refinancing reflected. The new payment, from the new schedule, not last year's line.
Timing
- Insurance renewal month known, early rate read requested. The line pro-rated: current premium until renewal, estimate after, estimate marked as such (the method is in Budgeting for an Insurance Renewal You Haven't Seen).
- Utilities on non-monthly cycles mapped. Water, trash, anything billed quarterly or seasonally, never naively annualized from a mid-year figure.
- Once- and twice-a-year items scheduled: audit, tax preparation, reserve study fee, permits, annual meeting costs.
Vendors and decisions
- Contract changes carried through: renegotiations, escalators, terminations, new agreements, each at its actual new number.
- The minutes audit done. Every money-touching motion of the year walked against the draft's lines, before the board reviews it, so the board never catches its own decisions missing.
Reserves and realism
- Reserve contribution versus the study's recommendation, gap stated in dollars, any gap a minuted decision someone owns (why this line especially: When Reserves Get the Leftovers).
- Bad debt budgeted. Expected delinquency and write-offs at a defensible rate, because 100 percent collection is a hope, not a plan.
- NBI identified and its tax provisioned. Non-exempt income segregated, a provision line the CPA can correct (the details are in Loans and NBI: The Two Lines Nobody Budgets).
No number gets typed until the list is worked. That single rule is most of the difference between a built budget and a copied one.
In the interest of transparency: this is the gap my company works on. We offer a free, easy-to-use tool governed by your association's own documents. It ensures every budget line is properly coded, who is responsible and on what basis it is shared, as the documents direct, or as an explicit board decision where the documents leave that to the board. The math underneath is deterministic. The method above works with or without it.
Related: Seven Inputs Your HOA Budget Ignored · The Three Ways Every HOA Budget Goes Wrong.
