The HOA Board and management team carefully assess all HOA activities with regard to risk management. Risk management is managed within a self-sustaining planning and control cycle. At the start of each year, the cycle begins anew as policies are reviewed for continuing usefulness and the next year’s business plan is created.
Setting Policies and the Governance Framework: HOA sets policies that put limits on the amount of business risk it will assume. The policies are reviewed annually;
Planning: HOA goes through an annual planning process to produce an updated strategic plan and an annual business plan and budget. The planning effort sets out the goals and objectives for the organization, actions, outcomes and targets for performance and risk, that together will ensure HOA’s long-term success;
Measuring Risk: HOA uses regular reporting to measure performance and business risk and to compare the results to the business plan and historical trends. The system allows the organization to evaluate and constantly improve its performance; and
Managing Risk: HOA manages risk through a wide array of internal controls, comprehensive lending criteria, constant attention to both short- and long-term cash projections, contingency plans and reserves and a network of outside experts and resource groups.
