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| IHG Insurance (National Insurance Provider) |
| Providing Community Association Insurance for over 25 years: D&O Liability, Crime Products, Umbrella Coverage and Property Manager's Errors & Omissions Liability. |
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JosephW
(Michigan)
Posts:788
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| 01/28/2008 5:49 PM |
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There were three more embezzlement news stories over the weekend. The largest, today in Chicago. This should be on the news page shortly. One important point to be remembered is that at least two people should receive monthly bank statement directly from the bank (or any other financial institution in which the association has money). This could be the management company and the Treasurer; or the President and Treasurer; etc. But make sure they come direct, not via the the other party.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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SusanW1
(Michigan)
Posts:2316
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| 01/28/2008 7:07 PM |
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Having a bookkeeper come in an reconciling the checkbook helps, too. We did that on a quarterly basis. The more "eyes" on the financial paperwork, the better.
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GloriaM
(North Carolina)
Posts:778
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| 01/29/2008 10:56 AM |
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| Also making sure your MC, treasurer or anyone handling the funds is bonded. This way your funds are guaranteed. |
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Dr. Gloria J. Martinez, CFO
Official HOATalk.com Sponsor
Author of "A Guide to Community Living"
Faith Management Services, LLC (North Carolina)
(704) 799-3791
www.FaithManagementServices.com
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JosephW
(Michigan)
Posts:788
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| 01/29/2008 11:26 AM |
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You need the crime policy, not just the fidelity bond. In the embezzlement regarding the management company in Virginia, I was just told this weekend that about half the insurers didn't pay off, for various reasons. You need to have the insurance agent outline the exclusions or conditions under which a policy won't pay off and make sure you have those areas covered by your procedures.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JC3
Posts:290
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| 01/29/2008 12:03 PM |
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| What is this "crime policy?" Is that part of bond insurance? Is that included as part of D&O insurance, or a separate insurance policy? If so, where do we get that? |
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RogerB
(Colorado)
Posts:3726
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| 01/29/2008 12:25 PM |
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JC3, I believe by "crime policy" it is also called theft insurance and previously was know as fidelity insurance. Some people have also referred to this insurance as "being bonded"; but it is not a bond.
This is a pet peeve of mine. If you have read our ad it states "Our money handling procedures remove possibilities for theft." I have posted the procedures several times which can be viewed by using the search button. I do caution those who think requiring 2 signatures helps prevent embezzlements. It is an extremely minor safeguard at best. Banks we do business with only require one signature and have no idea how many signatures the HOA requires.
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JosephW
(Michigan)
Posts:788
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| 01/29/2008 12:33 PM |
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From the sponsor ot the left (IHG) here's an article, and you can talk to them or your own agent:
http://www.ihginsurance.com/risk-management/article.jsf
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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MicheleD
(Kentucky)
Posts:1866
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| 01/29/2008 4:10 PM |
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RogerB said: "I do caution those who think requiring 2 signatures helps prevent embezzlements. It is an extremely minor safeguard at best. Banks we do business with only require one signature and have no idea how many signatures the HOA requires. "
I agree with this statement. While our board policy required 2 signatures, the 2 banks we used (at different times) paid no attention whatsoever to that requirement, even so far as stating to me once that they don't even look at the signatures. I said, "So you're telling me that someone could sign this 'Santa Claus' and it would not be compared against a signature card?" She said, "That's correct."
We had a treasurer signing and counter-signing some checks. He would sign the president's name (me), but spelled it wrong.
Fortunately, we caught this early and he only redirected about $200. He reimbursed us and resigned.
But it could have been worse.
We implemented a policy where one person would pick up the mail and open it and then send an email to the entire board listing each piece of mail and what was in it. For the banks statements, he would basically list each line item.
Only after his email went out would the mail then be delivered to the appropriate board member (president, treasurer, whatever).
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JosephW
(Michigan)
Posts:788
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| 01/30/2008 6:04 AM |
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Going back to my first post, the key to most of the embezzlements was not only cooking the books, but altering the bank statement to reflect what should have been in the account instead of what actually was. Red flags don't go up if everything appears to be in balance and your bank statement shows an amount close to what should be in there. The person doing the books should not be the only one to receive a bank statement directly from the bank. Most banks will send copies, or you can get an electronic copy sent to one of more other people.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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RogerB
(Colorado)
Posts:3726
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| 01/30/2008 8:46 AM |
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| Excellent point Joe. We encourage all Board members to be signers on all accounts. All signers can go to the banks websites to view unaltered bank records. Since all Board members with an email address are emailed the monthly financials they have one of the safeguards. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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