Bank on It! Board Members’ Guide to Money Management

The New York metropolitan area probably has more banks and other financial institutions than anyplace else in the country. This is after all the city where Wall Street is located. Go down any major shopping street and chances are you’ll see five or six bank branches within two or three blocks—big banks like Chase and Citibank, smaller community banks, foreign-owned banks, you name it.

Add to that investment banks, online bank accounts, government bonds and other financial instruments, and it can be confusing to many—especially when you want to know where to put your co-op or condo’s money. Administrators need to keep their operating funds both safe and accessible, and also take care of their reserve and operating funds.

Types of Accounts

In most cases, what types of accounts do co-ops and condos have? We found a variety of answers. For example, Stephen Beer, CPA, a partner at the Manhattan accounting firm of Czarnowski & Beer, LLP, says that there are basically four types of accounts.

These include the basic operating checking account “that you pay your bills with,” reserve funds that can restricted for capital items or other items that the board deems necessary; an account to store extra money that is saved unexpectedly, which can later be moved into your operating fund or a money-making account; and an escrow account, often for security-deposit money that you’re holding for a few months for new residents. The “extra money” account, Beer says, often can be found in gas-heated buildings after mild winters, when the building spends less than it had budgeted for.

Richard Smolin, CPA, with the Brooklyn-based accounting firm Smolin & Altamura, CPAs, says that generally, co-ops have two or three basic accounts. The aforementioned operating accounts, he says, are typically checking accounts at an FDIC-insured institution. Buildings also have a savings account, “which can double as the reserve account for smaller buildings.” And larger buildings generally have separate, board-controlled reserve accounts.


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  • Thank you for your article! You say, "The best managed buildings have board oversight." Is there a data visualization and budgeting tool, such as for individuals, recommended to help board members keep track of buildings' different accounts? Would you consider it advisable to set up such a system?