Previous Boards Mishandling of Funds

Started by CristieC • 6 replies • 1982 views

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CristieC (Georgia)
Posts: 1

Posted:

I am the current Treasurer of a community of 179 homes. I have found through previous paperwork where funds were poorly handled at the least. I am curious if anyone has advice or has dealt with this sort of thing. We are considering an audit because some money can not be spoken for. This previous board also paid themselves for everything that did, such as planting flowers, small maintanence, etc. My understanding of being on an HOA board is that it is a voluntary position. I would appreciate any advise. Thank you, Cristie

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

CristieC - An audit and attorney review are good places to begin. Certainly an audit with an outside accountant that gets the job through a bid process. Where is your MC in all of this? While being on an HOA board is a voluntary position, your governing documents may permit payment of certain out of pocket expenditures by board members. This usually requires approval in advance of it being expended. Gerald

BradP (Kansas)
Posts: 2,640

Posted:

Cristie:

Gerald is right, get an audit and an attorney. Even if board members are allowed to receive payment for services rendered to the community it is a conflict of interest and shoudn't happen.

KennethC (Alabama)
Posts: 27

Posted:

Posted By GeraldT1 on 06/12/2006 1:36 PM

CristieC - An audit and attorney review are good places to begin. Certainly an audit with an outside accountant that gets the job through a bid process. Where is your MC in all of this? While being on an HOA board is a voluntary position, your governing documents may permit payment of certain out of pocket expenditures by board members. This usually requires approval in advance of it being expended. Gerald

Posted By BradP on 06/12/2006 1:40 PM

Cristie:

Gerald is right, get an audit and an attorney. Even if board members are allowed to receive payment for services rendered to the community it is a conflict of interest and shoudn't happen.

But as long as it is a reimbursement and receipts are provided then there shouldn't be a problem right? For instance, I and others have racked up some expenses with getting our HOA running again. The reason for this is that we have to have at least 2 signatures on a check and we only had one remaining person on the list of possible signatures. At our last meeting we presented our expenses and receipts and it was voted to reimburse each of us once the new signatures have been filed with the bank. But again, only for the amount accounted for on receipts.

RogerB (Colorado)
Posts: 5,067

Posted:

Kenneth, many HOAs require only one signature for minor expenses. Many HOAs think 2 signatures provides safety at their Bank. But all banks I am aware of only require and look for one signature.

KennethC (Alabama)
Posts: 27

Posted:

Posted By RogerB on 06/12/2006 2:00 PM

Kenneth, many HOAs require only one signature for minor expenses. Many HOAs think 2 signatures provides safety at their Bank. But all banks I am aware of only require and look for one signature.

I personally have not spoken with the bank yet, but according to our "last man standing", who orginal office was treasurer, our account requries at least two signatures. It did not orginally and there was some questions about the spending, but since the change there has been a check & balance system in place.

JohnM3 (Florida)
Posts: 288

Posted:

It is normal and good business practice to get 2 signatures on al checks for HOAs.
Read your docs it usually states who has to sign all checks it usually is the treas and either the Pres or the vice pres.
It is bad enough going thru the normal way without making a disaster out of running your hoa. Put $1000 in petty cash disbursements thru your PM to hold so there is no hold-ups on deliverys etc.
Trust me have been treas for 10 years and the best way is do what your docs do. It is normal to re-imburse Board Members for monies spent on the boards behalf I usually have 2-4 times per month CC layouts and so forth .It is just too darn impossible to get a account set up with Lowes or Home Depot it is a nightmare. If I had it to do all over I would make it manditory to set up a ATM drawing account with a $1000 in it and the treas to keep the card and be answerable to all disburseements. H/she is covered for fraud under your d/o insurance policy

Jack
TFL ( Treas for life)

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