The monthly packet
A well-run association produces the same four statements every month: a balance sheet, an income and expense statement against budget, a delinquency aging, and a bank reconciliation. Larger packets add a general ledger detail and a check register. The board approves the packet in the minutes, which is why each director should read it.
The balance sheet
What the association owns and owes on the last day of the month. Assets: operating cash, reserve cash, assessments receivable (what owners owe), prepaid expenses. Liabilities: accounts payable, prepaid assessments (what owners paid early), deposits held. Equity: the operating fund balance and the reserve fund balance, kept separate.
The question: is reserve cash equal to the reserve fund balance? If reserve equity is larger than reserve cash, operating has been borrowing from reserves, which most states require to be repaid within a set time and disclosed.
Income and expense against budget
The month and the year to date, each line beside its budget with the variance. Income is mostly assessments; expenses follow the chart of accounts: utilities, landscaping, insurance, management, repairs, administrative, and the reserve contribution.
The question: what caused each variance over a set threshold, say 10 percent or $500? A landscaping line over budget in July is a one-time storm cleanup or a contract increase nobody told the board about. The manager should answer in the packet, not at the meeting.
The delinquency aging
Every owner with a balance, grouped by how old the oldest unpaid charge is: current, 30, 60, 90, over 90 days. The total is the assessments receivable on the balance sheet.
The question: what collection step is each 60-plus account on, and when was it taken? An aging without actions is a list of money the association has decided not to collect.
The bank reconciliation
The bank statement balance, adjusted for deposits in transit and outstanding checks, matched to the ledger's cash balance. One per account, operating and reserve.
The question: who prepared it and who reviewed it? The person who writes the checks should not be the only person who reconciles them. A treasurer who signs the reconciliation each month is the cheapest fraud control an association has.
Fund accounting, in one paragraph
Association books are kept by fund: operating for the year's expenses, reserve for the components in the reserve study, and a special assessment fund when one is levied. Every transaction belongs to one fund, so the statements can show that reserve money was spent on reserve components and nothing else. Statements that show a single pot of cash are not fund accounting, and most states require it.