Federal Audit

I am currently treasurer for my association and it seems that within a year and half we have developed a 60 thousand dollar deficit. Our old president seemed to make unilateral decisions changing the amount of money spent on projects after the board approved the expenditure. The old president allowed the property manager to basically act like a president and run the association for her. I have emails questioning the financial impact of various projects and financial decisions that property manager made from the past two years. She basically told me not to worry and that the projects and financial decisions would have little impact on our reserves. The advice that she gave me was obviously incorrect.

We have since recently elected a new president and voted to replace the property manager, however, Vanguard management told us that they will not have a replacement for the current property manager for several months. Unfortunately, We have to rely on her for help with the budget. The past president relied on the property manager to produce the entire budget. The past president discouraged board members from actively producing financial figures to incorporate into the final budget. The existing property manager completed the whole budget process on her own. This is a problem for us today because the current property manager knows that the majority of the board wants to replace her. Unfortunately, the old president is still on the board and wants to keep her. We believe she tipped off the current property manager that we were voting to replace her.

After the Sept. meeting, when the majority of the board voted to replace the property manager she threatened to resign and told us it was a bad idea to replace her during the budget time. She emailed the president of Vanguard and told him she was resigning and two hours later she sent the entire board an email stating the same.

A week later she sent the entire board another email telling us that she had a meeting with her supervisor and the president of vanguard and they told her that she is staying on possibly indefinitely or for several months until her replacement becomes available. I emailed the president of Vanguard three weeks ago, voicing my concern about her working on our budget. Mike Dorociak, the president of vanguard has not responded to my concern or gave a date for replacing our current property manager.

Is there any government agency or federal auditor that I can contact to come in and look at the financial situation? As previously mentioned, A year and half ago everything was financially stable, no deficit and now we have a 60 thousand dollar deficit. I believe the ex-president and the property manager concealed the deficit and is making it look like the deficit occurred under the new president. The ex-president, who is still on the board was president for the past 15 years and was devastated and put up a fight when the majority of the board elected someone else as president. I am fairly certain she is holding out to regain the presidency next year and planning to bring back the current property manager. We have little legal recourse until we hire a new attorney, because the property manager under the old president hired the existing one. Any helpful advice would be appreciated.

Thanks,

Kevin

Kevin - why is your post titled Federal Audit ??

Because Kevin was looking for a government agency or federal auditor. They don't exist. He needs to hire someone to go through the books, or do it himself.

I fully agree...you need a professional to track your accounts and find out wher this went awry.

The next course should be why it happened. Was it a simple mistake, or was it fraud in some manner? Our HOA carries insurance for crimes, E&O, etc. Does yours? The President may not be legally personally liable (as a Board member) unless he 'willfully or wantonly' committed this act, but there is a responsibility here. I would also take the results to Vanguard if the manager gave obviously poor.mispeading advice and ask them what they plan to do. that kind of an error give you substantial leverage to get someone new in!

Peter,

I agree, that the board is responsible for the budget. However, if some of the spending is concealed or not recorded on invoices there is no paper trail to follow. No figures to add. We hired the management company to pay out and keep track of invoices, not play money games with our ex-president.

Darlene,
I am glad that you were able to conduct your own audit. We are trying to account for the undocumented expenditures. Vanguard has not been forthcoming with the documentation that we requested. We will probably have to hire a professional.