check sent ot attorneys grandmother

Nancy, your diligence may have uncovered wrongdoing but it may be difficult to prove. Your example illustrates why every HOA should sign their own checks and set up a financial review process to catch errors, theft, and/or fraud. We use the following procedures.

Our management company receives all invoices and prepares all checks. We will not sign checks or have direct access to any HOA's funds. Checks are signed by at least one authorized representative of the Board (for large checks two signatures are often required). After checks are signed we distribute them.

A computer generated record of all checks is filed with the invoices each month. Monthly financial statements are emailed to all Board members and some HOA's ask us to provide them to all owners with email. Plus quarterly bank statements are scanned and emailed to provide a independent financial confirmation. All financial files are always available to any owner.

Bill, here are answers to your questions.
1. DARCO after establishing the invoice is valid and work has been satisfactorily completed. The invoice is attached to the check so the Board member signing the check can also check the invoice.

2. Most checks under $1000 require one signature. If the payment is for an unusual situation, not a contractural obligation, then a second signature may be sought. The Treasurer can have a difficult time finding someone home for a second signature; plus the bank only looks for one signature so there is no safeguard from theft by requiring a second signature. The method we use of having two independent parties provides a better safeguard IMO. However, it does not prevent a authorized signee from using a blank withdrawal form at the bank. But we would catch this within 30 days and advise the Board immediately as to who signed for the money.

3. Yes that is part of our management contract.

4. I could interpret this either way. But when you raised the question the Management Company should have immediately agreed to send copies to all Board members.

5. I have no Boards that approve every monthly financial statement. If a Board member has a question on any financial statement they call and we discuss it with them. An accountant can produce anything they want on a piece of paper; so independent confirmation, such as bank statements, are necessary before any financial approval or review can be completed.