Should funding a repair fund be included as a line item in the budget?
by Mary Bartlein
Should funding a Major Repair Fund be included as an expense line item in the budget? In other words, we have a separate savings account for major building repairs that we fund monthly by transferring money from the regular operating checking account to the fund. If we have a major repair (new A/C unit, new roof, etc) we pay for it out of the fund, which is an MMI.
We have an ongoing debate whether or not the monthly funding should be a line item on the budget P&L. All we're doing is "sweeping" money into the fund for future use. If we do have a major repair it should be considered a Capital Improvement. So, it seems that it doesn't make sense to make it an expense line item in the budget.
Thanks for any light you can shed on this.