HOA Finance Committee Charter

This charter outlines the purpose, responsibilities, and operating guidelines for the Finance Committee (the "Committee") of the [Homeowners Association Name] (the "HOA"). The Committee serves as an advisory body to the HOA Board of Directors (the "Board") on all matters relating to the HOA's financial health and stability.

Purpose

The primary purpose of the Committee is to assist the Board in fulfilling its fiduciary responsibility to manage the HOA's finances prudently and effectively. This includes providing oversight of budgeting, financial reporting, reserve management, and adherence to financial policies and procedures.

Responsibilities

The Committee's core responsibilities include:

• Budget Development and Review: The Committee will actively participate in the annual budget preparation process. This includes reviewing proposed budgets, analyzing projected income and expenses, and providing recommendations to the Board regarding budget adjustments and priorities.
• Financial Reporting Oversight: The Committee will review monthly financial statements prepared by the HOA's management company or treasurer. They will identify trends, variances, and potential issues that require further investigation and will report their findings to the Board.
• Reserve Fund Management: The Committee will regularly assess the adequacy of the HOA's reserve fund, ensuring it is sufficient to cover anticipated capital expenditures for common area maintenance and replacements. They will research and recommend investment strategies for the reserve fund to maximize returns while maintaining appropriate levels of liquidity and security.
• Audit Oversight: The Committee will participate in the selection of the HOA's auditor and will review the annual audit report, providing recommendations to the Board regarding any necessary corrective actions.
• Financial Policy Recommendations: The Committee will review and recommend updates to the HOA's financial policies and procedures, ensuring they are in compliance with applicable laws and regulations and reflect best practices in financial management. This includes policies related to assessments, collections, delinquencies, and investment management.
• Vendor Contract Review: The Committee may review and provide recommendations to the Board regarding significant vendor contracts with financial implications.
• Special Financial Projects: The Committee may be assigned special projects by the Board, such as analyzing the financial impact of proposed capital improvements or evaluating alternative financing options.

Membership and Structure

The Committee will consist of at least three (3) members, appointed by the Board. Members should possess relevant skills and experience in finance, accounting, budgeting, or related fields. The Board will designate a Chair of the Committee. The Committee Chair will be responsible for setting meeting agendas, facilitating meetings, and reporting the Committee's findings and recommendations to the Board.

Meetings and Reporting

The Committee will meet on a regular basis, as determined by the needs of the HOA and the Board. Meeting minutes will be recorded and provided to the Board. The Committee will submit written reports to the Board summarizing their activities, findings, and recommendations. The Committee is an advisory body, and all decisions regarding the HOA's finances ultimately rest with the Board.

Amendment

This Charter may be amended by a majority vote of the Board of Directors.