RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Have you read the article "Property Managers Accused of Theft"? This seems to be a too common occurance. If you have read DARCO's ad under the HOA Professionals tab perhaps you notice we remove possibilities for theft.
Does a financial review or audit prevent theft? NO! So what can an HOA do? Start by setting up policies and procedures which prevent the MC from access to funds. How? We use the following procedures and require them in our Agreements:
All payments must be made payable to the HOA - never to the MC. The payments are sent to the MC or the record of deposits is sent to the MC.
All checks must be signed by a Board member who is a signee on the account - no one in the MC ever signs a check or has the ability to withdraw funds. However, we have access to view the account, transfer funds between accounts, and receive and reconcile the monthly statements.
The monthly financial reports are e-mails to all Board members and copies of the bank statements are sent quarterly to the Treasurer for comparison to the financial statements.
Anything else? Yes, the HOA needs fidelity insurance. This protects against theft by Board members as well as the MC. Does DARCO provide anything else? Yes, to our clients.
The above procedures may not be acceptable to some MCs. They may argue that they need to pay for emergency repairs. But they can be done by authorizing a limit on expenditures which they can authorize without Board approval. Also a working, or petty cash, fund can be provided to the MC.
Protect your HOA funds with good money handling procedures.
Does a financial review or audit prevent theft? NO! So what can an HOA do? Start by setting up policies and procedures which prevent the MC from access to funds. How? We use the following procedures and require them in our Agreements:
All payments must be made payable to the HOA - never to the MC. The payments are sent to the MC or the record of deposits is sent to the MC.
All checks must be signed by a Board member who is a signee on the account - no one in the MC ever signs a check or has the ability to withdraw funds. However, we have access to view the account, transfer funds between accounts, and receive and reconcile the monthly statements.
The monthly financial reports are e-mails to all Board members and copies of the bank statements are sent quarterly to the Treasurer for comparison to the financial statements.
Anything else? Yes, the HOA needs fidelity insurance. This protects against theft by Board members as well as the MC. Does DARCO provide anything else? Yes, to our clients.
The above procedures may not be acceptable to some MCs. They may argue that they need to pay for emergency repairs. But they can be done by authorizing a limit on expenditures which they can authorize without Board approval. Also a working, or petty cash, fund can be provided to the MC.
Protect your HOA funds with good money handling procedures.