Leading, Supporting, and Serving the Non-Profit Housing Sector

Best Practices

Best Practices for Financial Planning

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1.	To ensure the buildings will achieve or exceed their maximum life and that funds will be available to replace major building components: Regularly assess the condition of building elements and equipment through the preventive maintenance program Annually update the five- or ten-year capital plan (replacement, modernization and improvement) for each development Submit the capital plan(s) to the Board for review. Related Links >>
2.	To ensure the society’s activities are adequately funded and to be able to monitor financial results, obtain Board approval (for each development) of: Annual operating budget Modernization and improvement budget Replacement reserve spending plan. Related Links >>
3.	To keep the replacement reserves at appropriate levels to meet long-term obligations, make adequate provisions for the replacement reserve in the annual operating budget. Related Links >>
4.	To keep appropriate funds in chequing accounts, and in short-term and long-term investments, prepare annual cash flow projections and update them monthly. Related Links >>
5.	To maximize returns on the society’s funds and conserve reserve funds, apply a prudent investment policy for security deposits and for capital and operating funds not needed in the current period. Related Links >>
6.	To ensure the buildings remain available for housing low-income tenants once the mortgage is paid off and the operating agreement expires, develop a long-term capital plan for upgrading or replacing the buildings and equipment starting at least 15 years prior to expiry of the mortgage and operating agreement. Related Links >>