Tag: finances

An article from the Board of Directors, The Weekly, July 13, 2025

The board thought it might be helpful to review what our budgets consist of, and some financ-y terms that are used, for those that may not already be familiar or for those that want a review.

The co-op earns money mainly from our housing charges. The revenue is allocated to two broad categories.

Operating budget : This is what we use for our day-to-day spending. This includes things like our mortgage, our utilities, cable, maintenance, our office, our committees and more.

Capital budget: This is what we use for our big projects and to keep our buildings and units up-to-date, safe and sound.

Here are some terms you may have heard:

Reserve: A reserve is exactly how it sounds. Money that we are putting aside or “reserving”. for later use. There is a reserve for both Operating and Capital expenses. We need to keep our reserves healthy so we can pay for everything we need to.

Budget: A budget is an amount that the co-op PLANS to spend on something. We have a budget for every operating and capital expense. Budgets are sometimes done based on a fact-based assumption on how much something will cost. The budgets also help us to know if we are earning enough money to cover our expenses and if we have enough to cover future expenses.

Actual: An actual is the amount that was actually spent on something. So, the co-op may plan to spend a certain amount, but depending on the needs, timing and actual cost, it may come over or under the budgeted amount. Obviously as a co-op we want to stay on budget, but there will always be variances.

To Date: This means the amount spent so far. This helps us know whether we are nearing our budget and if we need to allocate more or intervene.

Contingency: Usually with big Capital expenses, a contingency amount is built into the budget, to cover anything unforeseen.

Fiscal Year: Fiscal year refers to the annual time -period an organization is using for its financial reporting. Fiscal years don’t always coincide with the beginning of a calendar year. In our co-op’s case the Fiscal Year begins August 1, which is why we effect housing charge changes at that time.

Audit: You may have noticed we have an audit once a year done by an outside firm (to ensure objectivity). At a high level, the audit is done to make sure the finances of the co-op are healthy, and to ensure that our accounting practices are correct and our accounts are whole. The audit is a protective measure for the coop and provides another set of eyes on our finances.

Thanks for Reading.
Co-operatively,
The Board of Directors