Reconciliation of expenses and revenue involves which concept?

• A. To reconcile means to create a new budget from scratch
• B. To reconcile means to bring together after a difference; if expenses exceed revenue, reduce expenses or increase revenue from assessments; may involve a vote
• C. To reconcile means to disband the association
• D. To reconcile means to audit the bank accounts only

Answer: (B)

Reconciliation is bringing actual financial results into alignment with the plan. In managing a community association, this means comparing expenses to revenue and spotting any gaps. When expenses exceed revenue, the practical fix is to bring the numbers back into balance by cutting expenses or boosting revenue, often through increased assessments. Since raising assessments or altering funding typically involves the membership, a vote may be required. This captures both the balance act and the governance step that can accompany it. The other options don’t fit because creating a new budget from scratch is budgeting, not reconciling; disbanding the association is unrelated to balancing the books; and auditing bank accounts is about verifying transactions, not the broader reconciliation of revenue and expenses.