Washington HOA Audit Requirement: RCW 64.90.530 Explained

Quick answer: Under RCW 64.90.530, every Washington association governed by WUCIOA must prepare an accrual-basis financial statement at least once a year. If annual assessments are $100,000 or more, a CPA must audit those statements every year, with no option to waive. If annual assessments are under $100,000 (as adjusted under RCW 64.90.065), an audit is still required, but owners holding a majority of the votes, excluding the declarant, can waive it each year. All association money must stay in accounts in the association's own name and never be commingled.

The current text of this section reflects 2025 and 2026 amendments, so if your board learned the rule a few years ago, check it again. Here is what it says now and how to comply.

What RCW 64.90.530 requires

1. An annual accrual-basis financial statement

(1) The association must prepare, or cause to be prepared, at least annually, a financial statement of the association in accordance with accrual based accounting practices.

Accrual basis means recording assessments when they are due and expenses when they are incurred, not just when cash moves. If your books are kept on a cash basis during the year, plan for year-end adjustments: assessments receivable, prepaid assessments, accounts payable and prepaid insurance.

2. The annual CPA audit, and when owners can waive it

(2) The financial statements of associations with annual assessments of $100,000 or more must be audited at least annually by a certified public accountant.

In the case of an association with annual assessments of less than $100,000, as adjusted pursuant to RCW 64.90.065 , an annual audit is also required but may be waived annually by unit owners other than the declarant of units to which a majority of the votes in the association are allocated, excluding the votes allocated to units owned by the declarant.

Three practical points:

• The waiver is annual. A waiver from last year does not carry forward. Put it on the ballot or collect written consents every year.
• Majority of all votes, not votes cast. The waiver needs owners holding a majority of the votes in the association, excluding declarant-owned units. A thin turnout at the annual meeting will not get you there, so use absentee ballots. Our sister site explains Washington ballot rules in RCW 64.90.455 owner voting.
• Check the adjusted threshold. The under-$100,000 figure is subject to adjustment under RCW 64.90.065. Confirm the current figure with the statute before relying on it.

If your declaration or bylaws require an audit regardless, follow the stricter rule.

3. Keep association money in the association's name

The funds must not be commingled with the funds of any other association or with the funds of any managing agent of the association or any other person, or be kept in any trust account or custodial account in the name of any trustee or custodian.

Subsection (4) adds that a managing agent who receives association money must promptly deposit it into an account the association maintains. For self-managed boards, that means no running dues through a board member's personal account, even briefly. Reserve accounts follow RCW 64.90.535.

Does this apply to older Washington communities?

RCW 64.90 governs communities created on or after July 1, 2018 and those that have opted in, and full WUCIOA applies to all common interest communities on January 1, 2028. Some sections already apply to pre-2018 communities; RCW 64.90.525 budget ratification, for example, has applied since 2018. If your association predates 2018 and has not opted in, confirm with the statute or your attorney whether RCW 64.90.530 or your old statute governs your audit today. Our Washington HOA laws WUCIOA guide and the WUCIOA 2028 checklist explain the transition.

A year-end audit workflow

1. Calculate annual assessments for the threshold. Use the total regular assessments in the adopted budget, and confirm with your CPA how special assessments are treated.
2. Decide early whether to seek a waiver (under-$100,000 associations only) and include it on the annual meeting ballot.
3. Close the year on an accrual basis. HOA Fiscal's year-end checklist lists the entries.
4. Engage the CPA and give them the reconciliations, owner ledger, minutes and reserve study.
5. Tie the audit to the budget cycle. The audited numbers feed next year's budget and reserve disclosures under RCW 64.90.525 and the RCW 64.90.545 reserve study.

How Dynamite helps

Audits go faster and cost less when the books are already on an accrual basis and reconciled monthly. Dynamite Management keeps those books for Washington associations and coordinates with your auditor. We also prepare Form 1120-H for $175 flat, plus $100 for a state return.

FAQ

Do Washington HOAs need an annual audit? Under RCW 64.90.530, yes. Associations with annual assessments of $100,000 or more must have a CPA audit every year. Smaller associations also need one unless owners waive it for that year.

How do owners waive the audit in Washington? Owners holding a majority of the votes in the association, excluding units owned by the declarant, can waive it annually. It is available only to associations with annual assessments under $100,000, as adjusted under RCW 64.90.065.

Does a Washington HOA have to use accrual accounting? The annual financial statement must be prepared in accordance with accrual-based accounting practices.

Can a board member hold HOA money in a personal account? No. Association funds must be kept in the association's name with a qualified financial institution and not commingled with anyone else's funds.

Did the Washington audit threshold change? The current statute uses $100,000 and reflects amendments in 2025 and 2026. Check the current text if you were relying on an older figure.

This is not legal advice. Confirm with the current text of RCW 64.90.530 and your association's attorney.

Cover: Photo by Wildfire 1775 on Pexels