I cannot give an opinion on whether something is “kosher” however your budget sounds unbalanced at best.

I am an accountant but not a CPA. Best practice is that capital assessment funds be deposited into a dedicated capital reserve checking account (while operational assessments can go into the operating account). This also communicates clearly to your CPA what amounts get added to your cost basis so when you sell your unit, if your sale is taxable, your profit and corresponding taxes are less. The assessment funds at my co-op get transferred on a one month lag into the capital funds from the operating account (i.e. after the previous month’s assessment funds are fully known).

My two words of caution would be to: check the loan payments to see if they went up (a loan may have been used to cover the project costs); and to check to see if your building already had reserve funds which are being used to cover the costs. It seems odd that if elevators are ‘being installed’, the contractor would do so without needing progress payments as the work is being completed.

If your suspicions are true, you may have a big budget hole. Assuming it was not an honest mistake, you may also need a new management company or a new manager. Even if it was an honest mistake, you still may need a new manager who understands building finances a little better.

Good luck!