CAI-NJ July 2022

Staying Ahead of Items that Can Blow Your Budget By Michael Mezzo, CPA, WilkinGuttenplan

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hether you love or hate it, preparing a realistic budget is one of the keystones to financial success for condominium and homeowner associations.

nance, snow fund, etc.) investment income to each respective fund. Without this allocation, the investment income will be included as operating revenue and will overstate the income to be earned in the operating fund. Sales Tax: Sales tax is another budget buster than is often over looked and can easily be addressed. It is important to remember to review all vendor proposals for sales tax. Doing so will ensure that the full expense is being captured within the budget. Although this may not seem significant for smaller contracts, it can add up to a significant amount when considering larger contracts such as landscaping, maintenance contracts, snow removal, etc. Snow and Ice Clearing: Snow clearing is notorious for consistently being one of the more difficult line items to budget for, and rightfully so! CONT I NU E S ON PAGE 16

This has never been truer given the current environment of inflation and ever-rising costs. These factors will definitely pose a few additional challenges while tackling your cur rent year’s budget. However, these tips and tricks will help ensure a successful budget season for your community! Investment Income: Although this may seem like a straightforward line item, there is one key item to remember when budgeting for invest ment income: “Allocating it!” Many associations have a large portion of their investments held in the replacement fund. This makes sense as larger sums of monies are being accumulated in the replacement fund for future capital improvements. As such, it is important to include a line item within your budget to allocate any replacement fund (as well as deferred mainte

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