How concerned should we be?

The treasurer on our board has been extremely reluctant to provide the rest of the board members with up to date financials.
our bylaws state that the treasurer is required to provide the homeowners with a budget every April and we have not seen
one in more than two years. This individual is the only person on the board that has power of attorney, never attends the
board meetings and has been managing the finances, dues, bids, expenses for the past 4+ years. We are getting very concerned.
The board president has made numerous attempts over the past 5+ weeks to get financial details and continues to get nothing
since he has stressed the need for an audit to take place with the majority of the homeowners wanting to move everything to
a property management firm ASAP.

How concerned should we be?

You're kidding right. After the treasurer failed to provide a budget two years ago the Board should have removed the person from that position and appointed someone else. Oh, wait no one else wanted to be bothered to do the work required so the BOD just crossed their fingers and hoped for the best. Remove this person ASAP from treasurer and get an audit.

Note I said remove from the position of treasurer not from the Board. In most cases that would require a vote of the homeowners.

Like others say, you should be concerned and should remove the Treasurer.

You might also try going to the bank and getting an account statement. Hopefully, the Board at least knows what bank the HOA uses. Even if you can't get access right away, you can find out from the bank what needs to be done to get access and then do it.

Michelle,

Yes, as others have said you should be concerned.

Comment: It could be possible that the individual just doesn't know what they are doing and too embarrassed to admit it. It doesn't alleviate the issue but it may alleviate the fear of something else.

Question: Are you still under builders/developers control or is it totally the members who are in charge of the HOA?

Question: Power of attorney? For what (as i have never heard of an officer needing a power of attorney)?

Thank you for your feedback. Our HOA is just homeowners (no developer or property management firm).
However, it was collectively decided by the homeowners and other board members recently that everything should be moved to a property management firm which is one of reasons why we are trying to get our arms around the financials.

Tell her she doesn't have to worry about that anymore. She is no longer the treasurer.

As far as the audit, I dont know what your docs say about spending money, you may not need to vote. You may want to do your own audit. You know the expenses better than any accountant. Following a money trail isn't hard.

Michelle,

I understand why the BOD is concerned about being provided financial statements, but what is even more important is to be given all the financial records of the assn. The current treasurer should be removed from that position immediately and another board member appointed to replace her. If she is not willing to turn over all the financial records to the board then have your attorney send her a demand letter. The records are much more important than the financial statements. A CPA does not need financial statements to perform an audit; he'll prepare his own financial statements, but he does need to have the financial records. It's apparent to me the treasurer does not want to be cooperative.

At this point you have no proof of any wrong doing on the part of the treasurer. Until an audit is performed you will not know what the state of the finances of the assn is. So, I would not recommend saying anything to the members about the treasurer. If the BOD wants to tell the members something just state that a new treasurer has been appointed and that a CPA is being contacted to perform an audit. I see no need to state why a new treasurer has been appointed. If the audit turns up some wrong doing (meaning embezzlement)on the part of the treasurer only then should the members be informed. In other words if it turns out that the assn would need to press charges against the treasurer only then should the members be informed about what the treasurer has done.

One other important point. Be very forthright with the CPA about why you want an audit performed. Let him know how secretive the treasurer has been and that she would not prepare any financial statements. Ask him to be sure to look for any signs of embezzlement. Also the audit should go back to the year she became treasurer.

i ask these things:

where are the records kept?
does any other board member have access to the computer?
if you need bank statements, can the board add to the signature card?

i ran for our board on the position of open records and decisions....our homeowners are coming around to this, and are starting to question why things were done differently before.

Patti,

How can you call your org an HOA that is required to abide by CO HOA statutes if you don't have covenants and restrictions (CCRs)? Surely your governing documents consist of more than a set of bylaws.

Our treasurer did the same and turns out she stole $14,000. We were able to prove it through the bank statements. Hopefully, your treasurer is not the only signer on the account. Get the records and see for yourselves what is going on.