Condo Association Management Blog

The main purpose of the annual membership meeting is to elect new board members and can be done separately than the budget. Normally outgoing board members approve the budget before the new Board takes over anyway. 
 
Your fiscal year would still be the fiscal year and your budget is required to be based upon that. You would hold a budget meeting in December to adopt a budget for the new year.

Many association's condo docs stipulate the annual meeting on one date and the fiscal year to run differently than the terms of the board members. This is why i say the outgoing board (or sitting) approves the budget for the coming year. 
 
This is instance is a perfect example. The fiscal year runs January 1 - December 31st. The election is dictated by the condo docs (annual membership meeting) is the 1st Monday in March.  
 
So the Board elected the 1st Monday in March will work on and create and adopt the budget for 2012. 
 
The incoming Board at the next election can always look at the budget and make adjustments...remember it's only a budget, not set in stone.

In Fl our election is in March. Our budget is Jan 1--Dec 31. The outgoing Board approves it. It works fine. As Joyce Nord said above, it is only a budget, it's not set in stone, and there are normal deviations anyway.

Also, Florida Statutes require Associations to use the fiscal year as specified in their condo docs. 
 
What steps the board would have to take to modify the fiscal year as set forth in the condo docs depend upon the condo docs themselves. 
 
You normally would have to amend the condo docs. At minimal it would require notice to all owners of the proposed changes to the condo docs (which in and of themselves have very specific requirements and process), a meeting of the Board to adopt the proposed changes, and then to file a copy of the amendment with the county clerk's office. 
 
Many Association's use attorneys for this process due to the complexity and it can get costly. 
 
For the specifics your Association would require to do so, I would seek the advice of an attorney.

As has been stated - the election of directors and the budget year are not the same. 
 
The budget process for the following year begins almost as soon as the current fiscal year begins. The budget is a road map of anticipated expenses adopted to establish the yearly assessment rate. Individual variances during the year are resolved by the board in the reallocation of planned spending.  
 
Well-organized communities often have a budget committee that works with the Treasurer for two purposes: 
* monitoring the current expenditures to recommend to the Board necessary changes due to unexpected larger than anticipated expenditure in one category, curtailing expenses elsewhere to permit a balanced budget by the end of the year 
* beginning as early as necessary to develop a proposed budget for the following year. 
 
The role of professional management is to assist, perhaps developing a first draft for discussion and to bring knowledge of anticipated adjustments to the cost of doing business to the attention of the planners and the directors. 
This proposed budget is usually discussed by the board beginning at perhaps 3-4 months before final adoption. When the board reaches consensus on the proposed budget, it should be sent to owners 30 days prior to final approval. The owners should have an opportunity at the next board meeting to ask questions and make recommendations. Then the budget is approved by the board (unless the documents of the assoc. require member approval). Many documents require that this happen 30 days prior to notice of the assessment rate for the following year.  
Ongoing financial situations can affect the budget during the year, requiring action and affecting the budget for the following year. This can include change in a vendor resulting in different pricing; loss of revenue due to assessment collection, unanticipated loss due to property damage, litigation, etc. The current board needs to continually monitor the financial condition of the association. 
 
Best intentions can be lost due to actual events. Utilize the advise of all the professionals who can assist: the management, the CPA, the vendors, and members who have had experience in their business life.  
 
 

What one can or cannot do about budget setting and at what time are to be determined by Florida laws governing condominium,and/or mutual benefit corporations. In California it is the Civil Code. 
In general, the law requires a budget to be presented to homeowner (a) Annually within a time limit (b) A budget based on "Accrual" basis of accounting (Meaning "Don't pretend you don't have any money left over from last year", or "Don't you start at zero in every year and pocket the left over cash") (c) Budget and research plan is usually the same thing or usually prepared at the same time for the homeowners. (d) Approving a budget is quite often a procedural thing if the board is full of the "President's men or women", otherwise there can be a fruitful discussion before vote of approval. However I do not know whether the majority of the homeowners' approval is required for budget setting?  

Correction of typo. 
"Research plan" should be "Reserve Plan"

get a virtual accountant. it is much easier and light on the pocket.