Initial data when drawing up a budget Document structure Errors in drawing up
You can find out how to create your own HOA, where you can complain about unlawful actions of the association, as well as how to get out of it, on our website. Read also about the rules for conducting absentee voting for HOA members.
Estimates for HOAs and housing cooperatives: purpose, procedure for preparation and approval
Homeowners' associations and housing cooperatives are types of consumer cooperatives. They are created in order to accumulate the finances of citizens for the joint ownership and use of their property or the creation of new objects of civil circulation.
Since these entities are legal entities, they must keep records of their activities by drawing up various documents, for example, estimates, declarations, protocols, etc.
The estimate of income and expenses is intended to identify the finances attracted to the consumer cooperative and legitimize their further expenditure for certain purposes. The rules for preparing estimates are fixed by internal local acts of the organization. An HOA, as a way of managing an apartment building, does not have the right to engage in entrepreneurial activities that generate income. However, housing legislation gives them the right to receive small profits, which are used for the general needs of residents. Such income must also be reflected in the document.
The estimate is usually prepared by the organization's accountant as part of accounting. Its approval is carried out by the head of the HOA or housing cooperative, TSN and other organizations.
In a situation where there is no accountant in the cooperative, it is the board of the consumer cooperative that is responsible for drawing up and at the same time approving such a document.
Due dates
The completed declaration must be submitted by the responsible person no later than the end of March of the year following the reporting year, in accordance with Part 1, Clause 1, Art. 346.23 Tax Code of the Russian Federation.
When liquidating a housing association, it is necessary to submit a closing reporting declaration to the tax service no later than the 25th day of the month following the month of liquidation of the housing structure (clause 2 of Article 346.23 of the Tax Code of the Russian Federation).
The date for submitting internal reports of the housing association is determined by the charter and the general meeting of the organization’s tenants; as a rule, such reports are presented in early January or late December at the annual meeting of property owners.
So, a simplified tax assessment system can reduce the taxation expenses of a housing association, provided that the organization of residents is large enough and the majority of residents of houses entrusted to the HOA are its members. If there are significant debts of residents (more than 10% of assets) in the housing structure, it is better to use a common payment system.
How to create an estimate of HOA income and expenses for 2021
It should be noted that the preparation of these documents is not an obligation, but a right of the organization. However, many consumer cooperatives draw up estimates in order to avoid conflicts and controversial situations in the future.
The estimate is prepared separately for each calendar year. It fully reflects the entire budget of the company. It includes the following items:
- Revenue part.
- Expenditure part.
In the first case, all possible income of the company is indicated, which may include finances for renting out common property, contributions transferred by cooperative members, etc. In the second case, the costs of maintaining an apartment building, its major and current repairs, office expenses, and payment expenses are included according to concluded contracts, etc.
Although the law does not contain specific rules for approving estimates, recommendations may be made by separate resolutions of authorized government bodies. For example, it is recommended to include the following elements in expense items:
- administrative expenses;
- technical expenses;
- other expenses.
The last group of expenses is not included in all estimates. As a rule, these are expenses aimed at insuring the home and its general property.
In 2021, it is imperative to include one more specific element in the estimate - contributions for major repairs. If the HOA has decided to implement it this year, then these expenses must be included in the expenses.
The estimate may also include housing tax, estimated savings, utility payments to various services, etc. The document must be in writing, properly certified and signed.
The document can also include possible annual risks. This is done in a separate line, since the probability of their occurrence can be either low or high. Future expenses will depend on this. As a rule, if risks are included in the estimate, then the expenditure part may have several separate items that will be implemented depending on the occurrence of these same listed risks.
Spending
What are the funds spent on? Funds can be spent on completely different needs. Let's consider the main ways of distributing funds :
- For home needs . So, expenses include the purchase of materials.
- The second reason why spending may occur is the payment of wages to employees who carry out activities to maintain the house.
- Expenses include the activities of organizations cooperating with the partnership and carrying out actions under a contract , for example, garbage removal.
- On gratitude for the actions of the chairmen and the board.
- Funds are spent to pay bills from resource-providing organizations.
- To purchase the appropriate equipment to carry out the work.
- Purchase of various office supplies for the needs of the partnership.
- For the services of a credit institution in whose accounts funds are located.
- Training of staff to work with the house.
- For insurance .
- Payment of various taxes , including land taxes.
- Repair of the housing stock of a specific house.
- Bonuses and incentives for staff.
- Various types of unforeseen losses.
Read about the types of HOA services in our article.
Who approves the estimate of income and expenses in the HOA and when?
As noted above, the contents of this type of report are approved by the HOA board. Sometimes such a consumer cooperative may hire third parties to carry out this type of work - an accountant.
It is this person who will be responsible for drawing up the estimate. Approval of the document is within the competence of the board. In a situation where there is no accountant in the organization, the approval of the preparation is carried out by the board itself. So-called forums (in other words, meetings of owners of residential premises) can be held regarding the preparation of expenditures and the conclusion of contracts with management companies. They discuss possible expenses and vote in favor of one or another item. Based on the results of the meeting, a protocol is drawn up. The resulting list of expenses is approved by the HOA board and included in the estimate.
As already noted, the estimate is drawn up for a year. That is why it is worth starting to write it at the end of this year. Approval occurs immediately after preparation.
Estimate and tariff changes
In a situation where a homeowners’ association, through its direct representatives, enters into contracts with resource supply organizations in the housing and communal services sector, the cost of payments to them may also be included in the estimate.
Utility tariffs change very often, usually once a year. Sometimes rates may change several times over the course of a year. That is why periodic changes have to be made to the estimate. Some partnerships include the proposed increase in tariffs in the “risks” column. Therefore, in their cost estimates, expenses include separate items that come into effect when tariffs for a particular service increase.
There are situations when the Government of the Russian Federation announces in advance an increase in tariffs and the size of such an increase. In this situation, numbers are entered into the document in advance that will be put into effect for a certain period of time. It is necessary to correct or make changes to the estimate correctly by holding a meeting between the owners who are part of the HOA. This meeting is also recorded. Based on the results of the discussions, the HOA board makes changes by issuing a separate act, which specifies new provisions and invalidates the previous expenditure items.
It should be noted that utility costs are included only when they are aimed at ensuring the activities of the apartment building itself and its common property. Utility costs for each individual owner are not included.
Initial data for budget planning
First of all, when drawing up an estimate, the budget of the previous 1-3 years, as well as the execution by item, is taken into account. The technical parameters of apartment buildings remain unchanged - number of floors, area, but are entirely subject to changes in the ratio between residential and non-residential premises due to transfer from one category to another. Both the number of residents and their rights to housing benefits are changing.
The following initial data are also taken into account:
- balance of financial reserves;
- stocks of material resources;
- inflation indicators;
- planned revenues from the state budget for the repair of common property;
- approximate salary amounts for staff and board staff;
- cost of maintenance services for apartment buildings, etc.
Attention! You should always include in the estimate a certain amount for unforeseen expenses, the amount of which will help you navigate the real figures of expenses for this item for previous periods. This is money that will come in handy in case of accidents and other unplanned problems that require urgent solutions and spending money.
Is it necessary to include heating in the HOA estimate?
Heating is a public service provided during a certain season. It is necessary to include it in the estimate, but only under certain conditions.
So, if premises belonging to common property are heated, then such costs must be included in the estimate. If there is already information that tariffs will increase, then this must also be indicated in the document.
In a situation where we are talking about heating supplied to specific apartments that are part of an apartment building, such expenses are not subject to inclusion in the list of expenses according to the estimate. If we are talking about Moscow, then the tariffs set by the government of the city apply. The same applies to other regions of Russia.
In SNT, heating is not included in the estimate. This is due to the fact that gardening partnerships are seasonal organizations and simply do not have heating.
Samples and examples of estimates of income and expenses of HOAs and TSNs
The estimate, as one of the important documents in the activities of this type of consumer cooperatives, is published in writing. It can be either handwritten or printed using technical means.
The estimate, as noted above, should include such elements as:
- The income part.
- Consumable part.
- Approximate deadlines for fulfilling obligations.
- Payment purposes.
- Services for the current maintenance of housing.
- Tax accounting forms.
- Typical calculations, etc.
The first sheet of the document includes the name of the organization, the location of the apartment building, its actual address, an indication of the persons managing the board of the HOA, etc.
Sample document, form and example of how to fill it out. ⇐
Filling out the declaration
The tax return of a housing association under the simplified tax system must be filled out in accordance with the form approved by Order of the Tax Service No. 7-3-99. The text of the declaration must contain the following information:
- Name of the HOA.
- Taxable period.
- Details of the partnership as a legal entity, incl. banking.
- Name and code of the tax office where the information is provided.
- Code of activity of the partnership according to the classifier.
- The amount of advance payments received as of the date of filing the declaration.
- The amount of tax payable, minus advance payments.
Attention! With a simplified calculation scheme, the tax is calculated independently by the accounting staff of the housing association, but the tax service has the right to initiate a verification of the calculation data by requesting the necessary payment documents from the board.
You can find out how to correctly fill out a declaration under the simplified tax system in our article.
How to fix errors
Various errors may be made during the preparation of estimates. These are both grammatical and counting arrears. In a situation where there were grammatical errors, they can be corrected very simply by retyping the existing text.
A separate issue is errors associated with calculations in estimates. If certain assumptions are discovered, any citizen who is part of the homeowners association has the right to appeal this or that point. In a situation where the HOA board does not make any concessions, a person has the right to contact the housing inspectorate or the prosecutor's office. This occurs by submitting an application or visiting the relevant authority in person. Based on the results of the consideration of the conflict, the perpetrators may be brought to criminal liability.
Errors in the estimate are corrected by making changes. This happens by issuing a separate document, which states which item is to be replaced and why. After which the subparagraph is stated in the new edition. The procedure for punishing guilty persons may also be provided for in the Code of Administrative Offences. That is why you need to do the work of drawing up estimates in good faith.
In order to avoid possible mistakes, it is necessary, first of all, to take into account the experience in preparing similar papers in previous years. In some cases, you can get free advice from a specialist working in the housing inspection. He can help with drawing up estimates and give the necessary recommendations.
Thus, in order for the HOA to function normally and operate within the legal framework, it is necessary to prepare the necessary documentation. One of the most important documents is the estimate of income and expenses for the next year. This is a written act that includes different parts, both income and expenses. In case of intentional mistakes, the perpetrators who made it and received income from it can be brought to both criminal and administrative liability.
