HOA Financial Statements Guide: What Boards Should Review

Quick Answer

A standard HOA financial report package includes a balance sheet, an income statement, a budget-versus-actual comparison, bank reconciliations, a reserve fund report and a delinquency report. Boards should review these monthly. California law requires monthly board review of several of them, and Michigan condominium owners may examine financial statements. Your documents may require more.

The Core HOA Financial Statements

These reports show where the association stands and whether it is following its budget.

• Balance sheet: assets, liabilities and fund balances at a point in time, including operating cash, reserve balances, assessments receivable and prepaid expenses.
• Income statement: revenue and expenses for the period, usually shown month-to-date and year-to-date.
• Budget vs actual: compares actual results to the adopted budget and flags variances for discussion.
• Bank reconciliations: prove that the books match bank statements for operating and reserve accounts.
• Reserve report: shows reserve balances, contributions and spending against the reserve plan.
• Delinquency report: lists owners with unpaid assessments and the status of collection.

Supporting detail such as the check register and general ledger lets directors trace any line item.

What the Law Requires You to Review

California Civil Code section 5500 says that, unless the governing documents impose more stringent standards, the board must review the following on a monthly basis:

• A current reconciliation of operating accounts
• A current reconciliation of reserve accounts
• Actual operating revenues and expenses compared to the budget
• The latest bank and financial institution statements
• An income and expense statement for operating and reserve accounts
• The check register, monthly general ledger and delinquent assessment receivable reports

In Michigan, the Condominium Act (MCL 559.157) says the books, records, contracts and financial statements of a condominium project must be available for examination by co-owners and their mortgagees at convenient times. Rules for other association types vary by state and by the association's documents and bylaws. See California annual disclosure requirements.

How to Read the Reports

Start with cash

Confirm operating and reserve cash balances match the reconciled bank balances. Reserve money should be tracked separately from operating funds.

Look for variances

Review budget-versus-actual lines where spending is well over or under plan. Seasonal items such as snow removal or landscaping may be uneven across months, so look at year-to-date trends.

Watch receivables

A growing delinquency balance can strain cash flow. Compare it to prior months and confirm collection steps follow your policy. For more on the budget cycle, see the HOA budget process.

Check reserves

Compare reserve contributions with the reserve plan. See reserve funds explained.

Sharing Reports With Owners

Good communication builds trust. Many boards share a summary at meetings and make fuller reports available on request or through an owner portal, as their documents and state law require. Owners usually have a right to review association records, with details set by state law and documents. Directors carry duties of care, so see board member responsibilities.

When to Involve a CPA

Internal statements prepared by the manager are not the same as a CPA-prepared audit, review or compilation. Your state law or documents may require one of those. See audit, review or compilation explained.

Frequently Asked Questions

What financial reports should an HOA board get every month?

At minimum: balance sheet, income statement, budget versus actual, bank reconciliations, check register, general ledger and a delinquency report. Your documents or state law may add more.

What is the difference between a balance sheet and an income statement?

The balance sheet is a snapshot of assets, liabilities and fund balances on one date. The income statement shows revenue and expenses over a period.

Can homeowners request HOA financial statements?

Generally yes, though the process and timing depend on state law and the governing documents. Ask the board or manager for the procedure.

What is a delinquency report?

It lists owners with past-due assessments, amounts owed and collection status, helping the board monitor cash flow.

Who prepares HOA financial statements?

Usually the management company or bookkeeper prepares monthly statements. A CPA may separately audit, review or compile annual statements.

How APM Helps

APM manages community associations in Michigan and California, including financial reporting for boards. See our association management services, review pricing, or request a free proposal.

This article is general information, not legal, tax or accounting advice. Laws and documents vary by community; ask your association's attorney or CPA about your situation. Last verified October 25, 2026.