Budget Tamer

To do this job, you don’t need to be a certified public accountant, or a businesswoman, or a math whiz. “To be a good board treasurer, you need somebody who’s got the time and the interest to dive into [an] understanding [of] the building’s financial issues,” says Howard Lazarus, managing director at Tudor Realty. A treasurer must play many roles – as financial watchdog, as the board’s second set of eyes, and as a liaison between the property manager and the board, and between the board and its auditor.

Key Job

The treasurer’s key job is to review the manager’s monthly financial report and know how to spot signs of trouble. At least once each year, finances must be audited by an independent certified public accountant to confirm that records are accurate and properly maintained. Treasurers monitor the process and explain the audit findings to the full board.He or she must also be able to explain the property manager’s proposed annual budget to the entire board. (In self-managed buildings, of course, he or she will do even more and actually prepare the budget.) The job also entails taking a key role when the board interviews contractors before major capital projects. The treasurer’s job is to know if there are adequate funds for capital projects, and if the building is on budget – and if not, why not?

Just as important, a treasurer must know what he or she does not have to do. “It’s not the treasurer’s job to reconcile the bank accounts every month – that’s the manager’s and accountant’s job,” says Lazarus. “The treasurer’s job is not to keep good books on expenses and capital projects – that’s the managing agent’s and accountant’s job.” Since there’s no college for board treasurers, how does an unschooled co-op shareholder or condo unit-owner learn to perform this complex and vital job?

Many novice treasurers rely on their management company to show them the ropes. There also may be a transition period in which a new treasurer works closely with his or her predecessor. Some turn to their building’s accountant for help. “The best source of knowledge is the building’s accountant,” says Stanley Greenberg, a CPA who served as treasurer and is now board president at the 1,024-unit Le Havre co-op in Queens. Greenberg, who has helped train many co-op and condo treasurers, says the key document they must understand is the annual budget, which comes in two parts. The operating budget covers day-to-day expenses while the capital budget is a blueprint for major, long-term improvements.

“I regard training treasurers as part of my job,” says Lazarus. “I offer a private seminar that takes about an hour. I walk them through the monthly management report. First, they’re looking at the overall balance sheet – how much money there is, and what it’s needed for. Then we talk about accounts payable, and that’s a place where you can see red flags. If [the accounts payable] are high, why? Is somebody fighting with a vendor? Then there are receivables. It’s not the treasurer’s job to collect [monthly maintenance or common charges], but it is their job to understand the policy on charging late fees.”

Budgeting Questions

The treasurer must also be aware when more money is budgeted than is being paid out, Lazarus adds. If expenses for unionized employees are under budget, for instance, the treasurer should find out why. Were people fired? Were union benefits not paid on time, not paid in full, or not paid at all? “Once the treasurer understands the balance sheet and the operating budget, then they’ve got the overall view,” Lazarus says. “The job intimidates people unnecessarily.”

Arlene Goldman has no formal financial training, but she spent 30 years running companies before she became treasurer of the 200-unit Albert Apartments cooperative in Manhattan. Experience has taught her that a board’s treasurer is in a unique position to help a building. For the treasurer – unlike the property manager or accountant – has a personal stake in seeing that finances come out right. As Goldman notes: “Nobody watches your money the way you do.”