HOA Debit Card

This is a bad idea in my opinion. You have to keep this concept in mind. The HOA's money is NOT the board members money it is ALL the members money. The board members were elected from the general membership to REPRESENT the general membership on a DAILY basis. The money/budget spent is to be discussed and voted on prior to spending. Having a debit card in the hands of a board member means that voting process can be by-passed.

What if your board member sees a good buy on an item like pool umbrellas? Do they have the authority just to buy a pool umbrella and then the rest of the membership has to live with the color/design? These small type purchases add up and should be approved before buying.

It sounds like the daily routine items like toilet paper, office supplies, or cleaning supplies may be the intent of this decision. However, it is still best to have an assigned member to buy these and submit the receipt. Otherwise, you can have that one rogue member who decides to buy convenience items like the pool umbrellas without thinking about the ramifications. Too many of these type purchases can really make people question the board priorities.

Now things such as Sam club/COSCO cards are okay for individual members to have. We had those for our board members. That way things could be bought in bulk and save the HOA money in reimbursement. Club cards are still paid for by the HOA to purchase but the purchases made by them are the responsibility of the card holder. Just to make sure to understand the difference between debit card and club card benefits/drawbacks.

We purchase small prepaid Visa cards for our handyman to buy supplies. He has to provide receipts and the supplies can only be used for work previously authorized by the board. So far it's worked pretty well as the cards usually don't exceed $50 and we specify what's to be purchased, quantity, etc.

We have a debit card for one of our officers and it has caused no problem.

Our rural HOA is responsible for maintaining around 300 miles of dirt roads. We have a small fleet of vehicles: a road grader, an end loader, a 1-ton truck to tow the fuel trailer, and another small truck for getting our personnel to and from the work sites. We have to go 75 miles away to purchase diesel fuel at a good price and usually buy 500 gallons at a time.

When we first started our own grading we quickly discovered that our normal procedures for reimbursing our board members for association expenses just did not work. While our treasurer lived in the town where we purchase fuel, the management company was 150 miles in the other direction. Getting a paper check to our VP for Roads to pay for fuel was just not practical.

We opened a special bank account just for a debit card to allow the VP to purchase fuel and other materials. We put $5,000 into the new account and replenish the funds monthly. There is only one card, one authorized user, and never more than $5,000 in the account. The treasurer and the management company both keep a close eye on the receipts to be sure that we are paying only for HOA business.

This has saved our butts many times as it allows the VP to respond to unforeseen problems immediately without having to wait for the next board meeting or chasing a paper check over thousands of square miles.

My suggestion to anyone considering issuing debit cards to any HOA personnel is to open a unique account to limit the amount that can be taken out.

Generally a bad idea. Even if the expenditure are all HOA related, losing one or two receipts will raise issues of impropriety. If debit card is needed for extreme circumstances, be sure to document the expense and allocate the expense to the proper account on the books. Do not just put every debit card purchase in the "miscellaneous" account.