Florida Community Association Manager Practice Exam

Is it true that all community associations must have a financial plan for the fiscal year?

1. True

2. False

3. Only for large associations

4. Only for newly formed associations

The correct answer is: True

Having a financial plan is crucial for all community associations to effectively manage their financial resources and ensure long-term sustainability. This plan outlines the expected income and expenses for the fiscal year, helping to guide the association's budgetary process. A financial plan allows the community association to project costs associated with maintenance, improvements, reserves for future repairs, and other operational expenses. It also helps in establishing assessments for unit owners, ensuring that the association can meet its obligations. Furthermore, having a financial plan fosters transparency and accountability within the association, as it can be communicated to all members and serves as a basis for financial decision-making. In this context, it's important to recognize that regardless of the size or age of the community association, a well-defined financial plan is essential for effective governance, financial stability, and adherence to legal requirements.