CMCA - Certified Manager of Community Associations Budgeting and Reserve Studies Questions and Answers Flashcards
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Read the first 7 CMCA - Certified Manager of Community Associations Budgeting and Reserve Studies Questions and Answers flashcards as text
Which element is part of the CAI four-part test for whether an item belongs in reserves?
Answer: The item must have a limited useful life
The test requires association responsibility, limited useful life, predictable remaining life, and cost above a threshold.
Fence posts were installed 6 years ago with a 20-year useful life, but recent repairs extended their expected life. What figure in the reserve study changes?
Answer: Remaining useful life
Repairs or conditions that extend life adjust the remaining useful life estimate for the component.
How often do industry guidelines generally recommend updating a reserve study?
Answer: Every 1 to 3 years with a site visit at least every 3 to 5 years
Annual reviews with periodic updates and a site visit every few years keep the study accurate; many state laws set specific intervals.
Which reserve funding goal targets 100% funded, keeping reserves equal to the deteriorated value of components?
Answer: Full funding
Full funding aims for a reserve balance at or near the fully funded balance, minimizing special assessment risk.
An association earns interest on its reserve accounts. How should reserve interest generally be handled?
Answer: Retained in the reserve fund
Keeping reserve interest in reserves helps offset inflation and supports the funding plan.
Which statement best describes the difference between an operating budget and a reserve budget?
Answer: Operating covers recurring annual costs; reserves cover major periodic repair and replacement
Operating budgets fund routine yearly expenses, while reserves accumulate money for long-lived component replacement.
A board wants to borrow from reserves to cover an operating shortfall. What should the manager advise?
Answer: Follow governing documents and state law, document the decision, and set a repayment plan
Interfund borrowing, where allowed, must comply with legal and document requirements and include a repayment plan.
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Sources & references
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- camicb.org — Eligibility, exam format, retake fee · verified Oct 2026
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