More disappearing money

Started by BradP • 8 replies • 2029 views

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BradP (Kansas)
Posts: 2,640

Posted:

This is a follow-up to a previous thread I started, orginally I noticed two cash withdrawals for $210 total from three years ago in our association. I asked the previous treasurer in person about it, she said she didn't remember anything.

Well...Since then I have done a thorough check on all bank statements and have noticed more mysterious transactions. She did three seperate check deposits in 2003 and got cash back. In total we have $349.50 that was withdrew and unaccounted for.

What should I do, send a letter to her asking for an explanation and telling her that the appearance of these transactions is bad for the association? I know she will deny any knowledge of it. But, can I ban her and her husband from every being a board member again? Can I revoke her membership rights? I was willing to take 2 transactions and $210 in the shorts and move on, but 5 for $349.50 bothers me a lot.

Thoughts?

HaroldS (Arizona)
Posts: 906

Posted:

Did you read the board minutes for those dates? Maybe she was authorized to reimburse herself for money spent on association business or supplies. If anything, she is certainly guilty of poor judgment for not identifying every cent while under her control. But believe me, if I were going to embezzle it would have to be worthwhile and certainly for a lot more than $349.50.
If you are sure of your facts, you need to turn them over to the proper authorities and let them handle it. Harold
PS - Does your documents actually give you the power to ban someone for life and their spouse too? And to revoke their membership rights?

WilliamT (Arizona)
Posts: 489

Posted:

Regarding reimbursement of money that board members advance for small items:

Is it proper for a director who has spent money, such as $50 for small repair parts, to just hand a receipt to the MC for reimbursement?

Or should the director first make a motion to have the board approve the expenditure?

Would the MC need authorization from the board (through a resolution) to cut a check?

I'm trying to find the best way for this sort of expense reimbursement.

Thanks,

Bill

BradP (Kansas)
Posts: 2,640

Posted:

Harold:

Herein lies the problem, there are no record or copies of minutes from back then. Our HOA did a very poor job of running meetings, keeping minutes and just about everything. Part of it could be for reimbursement of but she withdrew $320 with three seperate transactions on the same day.

Our docs provide that we can suspend member rights, i.e. voting and use of common areas, if they break any of our CC&R's and if the board feels there is good cause to do so.

I am not 100% sure of the facts, unless she talks we can only speculate. Is this something that should be brought up in a board meeting?

JulieS (Georgia)
Posts: 412

Posted:

Bill,

I am always purchasing items for the neighborhood. Most items are for a specific item, or related to something, that the board has voted and agreed to (i.e., purchase of new basketball goal, community cookout, website hosting, etc.). I create an expense report and include copies of all purchases in which I am asking to be reimbursed for. The MC then writes me a check to cover these items put on my personal credit card.

We had a situation last year in which a resident overturned the board and during that process, four people spent the morning at the MC's office going through everything. They specifically were interested in what I did and anything with my name on it. They were unable to find any wrong doing on my part. Documentation is everything.

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

Hi Brad - I would only bring this up in private session because the facts are dated, sketchy and the implications could be damaging. You have no proof that a violation occurred, no matter how suspicious the withdrawals may seem. Since this owner is not a treasurer anymore, it doesn't seem like any future damage could occur. However, I would document the sums that were unnacounted for in your general ledger, I would institute a policy and a repercussion to prevent this from occurring in the future. Typically, officers can have their title stripped but remain on the Board as Directors. GeraldT1

WilliamT (Arizona)
Posts: 489

Posted:

Thanks Julie,

Bill

LisaS (Illinois)
Posts: 341

Posted:

Records of account and receipts are supposed to be kept for 10 years. It's not a difficult task...heck a shoe box would do! So i too would be suspicious.

I would not make any public accusations that you cannot factually back up. But I would make mention of concerns regarding accounting practices, and the fact that you had questions and were not able to find answers that should have been easily provided. People that have nothing to hide and that have made honest mistaked will not be offended. And those that are not that honest will take note that someone is watching.

BradP (Kansas)
Posts: 2,640

Posted:

I appreciate the feedback. As much as it angers me it really isn't worth taking the risk of accussing her of wrongdoing. I am simply going to send her a letter and ask if she has receipts and remembers what happened, then we will discuss at a board meeting proper safeguards and penalties for when those aren't followed.

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