Financial Controls 3: Budgeting and Forecasting
Financial planning includes shorter-term and longer-term budgeting. It involves creating an annual operating budget and a budget for capital replacements. Ideally, these will align with a comprehensive asset management plan.
Considerations and Recommendations:
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- Are your processes working well for you? Do they comply with the Cooperative Association Act and your co-op’s Rules?
- If there are discrepancies between the approved framework and how the co-op works, review and make appropriate adjustments.
- Prepare and review budgets in a timely manner.
Boards should be transparent in explaining the rationale for their decisions and recommendations.
- Regularly review when capital assets are nearing the end of their anticipated life and prepare for replacement.
- Have a current asset management plan (AMP) and track capital expenditures.
- Ensure adequate insurance coverage for all building components and other needs.
