Board Member Access to MC Quickbooks File Illinois

New member on a Board. Want to make sure money is being spent appropriately and all accountings presented are in accrual basis, and have no way to see actual amounts being paid out or taken in, and no copies of bank statements provided.

As board member do I have the right in Illinois to request a copy of the Quickbooks file kept on our Association by the Management Company as well as copies of the actual bank statements so that I may make sure all money is accounted for properly?

Yes you should have access. If you are not serving as Treasurer, you should first ask your Treasurer. Otherwise, going directly to the MC could give the Treasurer the impression that you do not trust them and cause for issues on the Board.

No, you do not have the "right"..... legally.

Although they could provide that file to you voluntarily, they don't "have" to. Its proprietary. They created it. They create many things to do their job, that you do not have the right to take from them just because they use these items to maintain your HOA and others. You have no more right to that file than the computer that it is on, the person that made it or the building it is in.

Unless..... your contract specifically states otherwise.

Remember Berni Madoff's scam suceesed because he was able to create professional looking statements that were believable. People trusted these statements for decades. In reality, it was all made up. The money was gone.

Who has signature authority on the bank account? If it is solely the management company you are asking for trouble. Insist that a board member have signature authority. Then have that board member direct the bank to provide duplicate bank statements directly to the HOA, not through the management company. This is the absolute minimum internal control measure to assure that the HOA knows where its money is.

I am having this same issue. I asked to see the bank statements and I was given the quickbooks P&L statement and quite frankly, that means nothing. Anyone can type anything into quickbooks and spit out a report. On our P&L statement, the treasurer indicated that the liability insurance cost was $1965.00 yet when I finally got a copy of it from the insurance company the cost of the policy was only $550. I was flat out denied the statements and no one will back me up, all the homeowners don't want to step in - not sure why everyone has their head in the sand. So what do we all do if we want to review costs, just bend over and take what ever they tell us?? This system is not fair - our only recourse is to hire an attorney and eat the cost of that. May as well just let the HOA over-charge us because either way we loose.

What do the members do? Not fair at all.

Hi Debbie,
It is not fair and I do not understand the other Board members - why be a Board member if you don't want to do the job? We did personally hire an attorney to advise us on how to proceed and I've been told if the Management company does not provide the documents and actual Quickbooks file on disk (not a printed report) that I can sue him, and unfortunately the Association will ultimately have to pay me back for the attorney fees. It's like I'm suing myself, but I guess that the only way to a) get the records; and b) to get the other homeowners and board members to share in the attorney fees - basically forecably. I had an accountant look over the reports and she told me the same thing - anyone can change anything before the report is printed. I hate to think anyone may be doing this, but I don't know.

I cannot believe how common this is across the country!

Although the management company will have to turn over the HOA docs such as bills, bank statements, etc, it's unlikely it will be required to turn over the QuickBooks file. Its property of the mgmt company.

Whether it is a mgmt co doing the books or the treasurer of the HOA, the data and the bank statements ARE property of the HOA. HOW can you think it is not? HOw can any checks and balances (audit) be done if we cannot see the bank statement and cross reference it to the QB file. In my case the other Board members do not want to be in the board. We only have 11 homes in the assoc, so no one wants to get involved. EVEN if they DID want to get involved - if the treasurer on the account won;t show the QB data AND the bank statements, we effectively screwed the pooch!!

Fact is that if you appoint or hire someone to do the books, you should be allowed to see them - period! I have been asking since March 28 and I was told by the treasurer that there is no reason for me to review the bank statements and all she is "required by law" to give me is the QB P&L file. I am in Tennessee but most laws indicated that members can see "records" but most laws do not specify exactly what those records are. The laws should be changed to help the members. If I was the treasurer and someone wanted to double check me, all I have to do is send them the statements and the QB report and off ya go! How hard is taht with technology these days?

This is just an opinion. Not backed by a court decision.

The mgmt company is the creator of these files, thus the owner. It is proprietary data. Unless you have "Data Ownership Policy" in writing with the mgmt company that states the working computer files they use such as quickbooks, excel in regards to your HOA are yours and shall be given to you upon request, you really have no right to them. The mgmt company can simply print out the records from quickbooks and mail the pages to you.

Typically you hire the mgmt company to produce reports from quickbooks, excel, etc and provide them to the HOA. Unless you have this stated otherwise in the contract, principles of trade secret laws would apply.

Your treasurer has no idea what she is talking about, and you're taking her statement as fact. Time for a new treasurer.

Good advice.

Roger's contract does look good, Cheryl. I only skimmed it so I may have missed it, but our MC contract states that the MC is "not obligated" to follow instructions from the board that oppose the governing documents or state laws.

Given your long-term MC, another related clause might be the within its areas of authority, the MC must comply with the governing documents and state laws. Or some such. I may have missed that wording in Roger's too an I'm sure it can be better stated than my version.

Thanks - the more details like that the better the contract.

Well just heard from the MC and he is invoking the 30 day provision that applies to Unit Owners for copying records for me, as well as a charge. Why is it so difficult to "do the right thing" - and expensive as I need to consult an attorney?

Well you only need an attorney if you dont know how to do something. So you either learn for free, or pay someone else. Your choosing to pay.

Yes I am a Board member.

Seems she is the ONLY one paying attention. The mgmt company could be robbing the HOA blind and no one would have a clue. Trust...... but verify.

Cheryl - I feel your pain, trust me. The law in all aspects of this protect the ones on the bank account, not the members. I am only a member but I should be able to see the bank statements at least once a year upon request. With modern technology, scanning and email is free. Let the members see the actual transactions - what is the big deal unless there is a cover up? Really? I can't understand those here in this forum indicating otherwise. Our meeting is tomorrow and I will face our current treasurer and ask her face to face to see the statements. I already talked to the court clerk in the local jurisdiction and she indicated something sounds fishy if the one in charge of the books won;t let you see statements. She even indicated that the QB reports mean nothing, the bank statements are the holy grail.

FYI - I am not an attorney and do not take this as legal advice. it is NOT hard to file a Summons and Complaint( for Specific Performance) in your local court. You can do it "pro per" and the court has blanket summons to fill out. You don't always have to file a lawsuit for money, you can sue for actions (performance). the only penalty of course is money but once the HOA is served with papers, I can bet you'll get the statements and then you can dismiss the case (again, the court has all these blanket forms). You can ask the court for your filing fee and service of process as a damage if you want but for that little cost to gain a peace of mind is well worth it. Some are going to respond that you are suing your self if you do this - we can agree to disagree on that observation.

The clerk whispered to me that I should call the State Attorney General....

Great idea! Maybe I will take that advice.