Top Red Flags
- Payroll Expenses Missing
- Report shows $95,160 in payroll taxes but no wages or salaries listed.
- Strongly suggests misclassification or omission of major expenses.
- Insurance Expense Underreported
- 2024 actual insurance was $27,169, but YTD 2025 shows only $444.
- This is highly irregular for a recurring, mandatory cost.
- Unrealistic Income Forecasts
- “Past dues” budgeted at $23,000–$25,740, while only $5,677 was collected in 2024.
- Legal fees projected at $15,000 despite historical income under $2,000.
- Improper Revenue Assumptions
- Returned check charges are listed as planned income. This is not a reliable or appropriate revenue source.
- Expense Irregularities
- Utilities under-budgeted while actual costs run much higher.
- “Maintenance – Other” shows a negative expense, indicating possible errors.
- Pool activities repeatedly budgeted despite little to no spending history.
- Surplus Projections Not Credible
- 2024 ended with a loss of ($3,737).
- Yet budgets project large surpluses ($17,164 in 2025, $28,520 in 2026).
- These projections are based on inflated income and understated expenses.
Why This Matters
While the association currently holds strong reserves ($256,510 total cash), repeated budgeting errors, inflated projections, and missing expenses could quickly erode financial stability.
Recommendations
- Correct and disclose all payroll and insurance expenses.
- Base income and expenses on real historical data.
- Remove improper revenue categories.
- Commission an independent audit for transparency and accountability.
Bottom Line:
The budget, as presented, is unreliable and may mislead property owners. Immediate corrective action and independent oversight are needed.
