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Subject: Forensic Audit
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09/11/2020 7:46 AM  
What Florida state agency monitors homeowners associations? There is very little information available to homeowners about what money is being spent and where, and when questions are asked in our meetings the questioner is shut down.


09/11/2020 9:15 AM  
The Department of Business and Professional Regulation provides limited oversight of associations, see the relevant Florida HOA law here:

Like most states, Florida does not provide any active oversight of associations, and limited assistance to owners who have concerns, but you never know, they might be of help.

In any case it is a good idea to become familiar with FS720 (718 for condos), in your case especially the section titled "INSPECTION AND COPYING OF RECORDS", which outlines homeowner rights to see and copy records, and provides monetary penalties of $50/day for not providing the required access.

The covenants (CCRs, Deed restrictions, etc.) are essentially a contract between homeowners, and most enforcement is through the court system via civil lawsuit. Unfortunately, this can get expensive and time consuming, with no assurance of winning any action.

Escaped former treasurer and director of a self managed association.


09/11/2020 10:15 AM  
When I was on my last Board in Ca. After having served for 6 prior years. We had a new Board member that requested that we do a Forensic Audit. I was the President at the time but had spent 4 years as Treasurer who really watched the Books closely. We had a Management Company who paid the Bills and over the years I found little minor discrepancies but nothing major. We voted as a Board and hired a CPA who specializes in Forensic Auditing. I believe we paid about $3,000 and it took them 2 months to complete. During the deep dive they found only minor issues and made minor issues that we could change.

It was great to know that we were not missing any funds or any accounting errors in the PMCs favor. All in All I thought is was a worth while experience. If you do hire a Company make sure they are specialists.


09/11/2020 11:16 AM  
Mark and Douglas make great points. Since forensic audits can be expensive, it may be helpful to begin by identifying what concerns you the most. You said people who ask questions at board meetings are "shut down" - does this happen regardless of what's being asked, or is the board getting cranky over anything related to finances?

Boards who aren't transparent in their actions, especially with money, should prompt you to chat with some of your neighbors to see if they're as concerned and annoyed as you. If so, it may be faster to call a special homeowner's meeting to discuss their behavior and if warranted, recall one (or several and perhaps all) of the board members and install another group.

Job one for the new board may be to get an internal audit first and if something doesn't seem right, get a forensic audit. If you have a property manager and he/she balks at cooperating with an audit, you may have to make their replacement job one, which would include an audit (by an outside company), and then go from there.

For those who don't know the difference between a forensic audit vs. an internal one, check out this article -


09/11/2020 11:45 AM  
JohnW51, as others have already mentioned, as the owner of a home in an HOA you have every right to view all the financial reports. You may have to ask for them "the right way". Both the condo and HOA statutes (FS 718 and FS 720) provide information about the official records of the association that owners may access, and how a requuest to see them should be prepared and delivered.

A Board, perhaps through the management company, can legally and ethically "shut you down" if you're not complying with the statutes when you request to see things.


09/11/2020 12:23 PM  
I need to know more like the others. Just shutting down the conversation could mean a variety of things. Plus most requests should be in writing not at a meeting. Do not know how the meeting is being handled. Is it the MC or the HOA board?

Who do you want to pay for this forensic audit? What result do you want or think is happening? Is your HOA not meeting it's bills? Is it spending money on items don't think needed? What is it that your looking for?

Former HOA President
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