An association's board of directors has the affirmative duty to:

• Review a current reconciliation of the association's operating accounts on a monthly basis;
• Review a current reconciliation of the association's reserve accounts on a monthly basis;
• Review, on a monthly basis, the current year's actual operating revenues and expenses compared to the current year's budget;
• Review, on a monthly basis, the latest bank account statements for both the association's operating and reserve accounts;
• Review, on a monthly basis, the check register, monthly general ledger, and delinquent assessment receivable reports; and
• Review an association's most recent reserve study on an annual basis in order to consider and implement any necessary adjustments to the board's analysis of the HOA's reserve account requirements.

Notwithstanding the above, the board has the duty to adhere to any more stringent financial review requirements that may be contained in the association's governing documents.

The financial review requirements set forth above may be met when every individual member of the board, or a subcommittee of the board consisting of the treasurer and at least one other board member, reviews the documents and statements described above independent of a board meeting, so long as the review is ratified at the next board meeting and that ratification is reflected in the minutes of that meeting.

Audits. Reviews, and Compilations

Glossary of Accounting Terms

Requirements for California Mutual Water Companies - AB 240