Guideline for signing bank checks from HOA funds

Started by KW3 • 3 replies • 2198 views

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KW3 (California)
Posts: 146

Posted:

What are the guidelines for signing bank checks from all HOA funds? (best is with referred official CA state law or act or rules; our HOA bylaws does not specify details but only allows the board to determine the matter from time to time, i.e., whenever new board is elected):

(Only) Who should be authorized to sign ALL association's checks (operating fund, reserve fund, etc)?

If, by most common consensus, only board members are allowed/required to sign and so all directors' signatures are set on bank signature card, in actual situation, i.e., bill is in and check is prepared (by MC) for signature, what is the list of order of board members for signing the check? president, vp, treasurer, secretary, ...? How many signatures (1 or 2) are required for each check? Do all these (who and how many) matter when the check concerns different account (operating or reserve fund) or different amount (large or small)?

Please share with your HOA's guideline and experience. Thanks

Happy Holiday!

TimB4 (Tennessee)
Posts: 21,059

Posted:

KW,

It's going to depend on your governing documents.

My governing documents specified that the Treasurer and President would sign all checks (two signatures required). As this became an issue due to vacation/work schedules the Board recommended and the membership approved that the checks could be signed by any two officers (mind you officers are not always board members but typically are).

Some Boards delegate this authority to management companies or bookkeeping services contractor. Personally, I believe that only the Board should be issuing checks.

Tim

DanS9 (Colorado)
Posts: 23

Posted:

KW,

Our HOA had no such rule or policy. When we seated the new boardone of the frst things we did was adopt a financial policy. In that policy it states that two (2) officers MUST sign any check. All of our officers are BOD members. Generally, the President (me) and the Treasurer sign the checks. If one of us is not available then the VP signs with whichever of us is there.

Another thing we did, was to change all of our billing cycles to the end of the month rather than the beginning. As we have our meetings the first week of the month, we sign checks at the meeting in front of everyone. The only time we do not do thisis if somethng comes up between meetings.

Merry Christmas!!

FredB4 (Ohio)
Posts: 375

Posted:

KW3
We previously had our management company handle all bank accounts and signatures but we now have the management company handle only the opperational account with a $1,000 limit on writing checks without a three board member approval. Our reserve account is controlled entirely by the board.It requires only one signature to transfer money from the reserve to the operational.
We wanted to set up a two signature requirement but were surprised to find that most banks do not pay any attention to that requirement, nor do they accept any responsibility if that stipulation is not followed.
As long as one signature from the bank's signature card is on the check or transaction they will process it. A few banks still claim that they will follow that guideline but other banks that we spoke to say because almost everything is now handled by computers it is not possible.
HOA officer fidelity bond insurance is a must.

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