Do you trust management and your fellow board members?

I just saw news that an executive at Saparn Realty management company in NYC was arrested for stealing reserve money. I've also seen news of board members stealing from their the communities.

How do board members prevent this? I know the people in my community would blame the board members if something like that happened to us.

Could not disagree more.

Your job should be to protect the community from something like this. My suggestion, involve yourself directly and do NOT simply turn the property over to the MC.

Prevention of theft and abuse IS part of the Board's job. Not sit back and wait till after the fact and THEN act.

Easier to keep the car on the road rather then having to pull it out of a ditch after you did not bother to see where it was you were going.

You should and MUST have a clear understanding of the MC's role and what they do and why. And you must understand the MC works for the Board they ARE NOT to do the Board's job.

Totally agree with Jon that the Board must do everything possible to prevent this by being involved, regular audits and constant over-sight.

IMO it should not be up to the Treasurer alone to verify the financial statements. The more eyes on anything the better the chance to see.

Our former MC was charging us for office supplies each month. A long list of expenses was given to us and when someone ook he time o do the math we were being overcharged. Not once but each month. he numbers simply were not added up correctly. FORMER being the key phrase.

In our case the Treasurer, VP and myself have access to all the accounts online. We can see what was done, when and why. In the past we have caught overpayments, CDs coming due, bank fees which could be avoided, and in one case a check which was drawn out of our account twice.

We are provided bank statements, check ledgers, along with other financials each month. Sadly, many on the Board can't be bothered to review these but enough do to ensure things are being verified.

Each check issued is sent to the Treasurer for her signature, a copy of the invoice provided for her records.

In most cases when something improper has taken place the Board has failed to do their jobs and allowed it.

No one watches your money like you can or should. Whenever you turn a blind eye and take the easy route you might leave yourself at risk and your entire community.

very simple solution:

the treasure should sign every check PREPARED by the MC

this could be done once a week and would take 20-30 minutes maximum

only members of the BOD should be signatories to the bank account(s)

the signatories should be 'bonded' for full $

case closed - simple

One great think our President does is watch our money. We receive all Association Fees, and stamp for deposit only before our PM even sees the checks.

Our President approves all bills then we give the bills to the PM to cut checks which are returned to us for the President to sign. After the President has signed the checks, we return the checks to the PM to mail and file.

We have got to tweek this a little bit as it caused us to have a late payment fee on one of our utility bils.

In my opinion we should let our PM sign the checks after they have been approved. We could get the checks in the mail much faster this way. But our President will not go for this.

Our Board of seven is sent all of the financial reports every month for our review. They're supplemental materials to our monthly directors report or packet. The Finance Committee also reviews them.

I'm not sure that anyone except the treasurer and I actually review all of them. And I'm not so sure about the treasurer! I suspect most just review the spreadsheet of summaries of various reports. I mainly look for anomalies since we're a really complex HOA that writes lots of checks each month.

How did it go on Thursday? Thanks

For starters, dont give the mgmt company access to the reserve fund. They dont need access. It should be setup as a separate account, even a separate bank if the bank cant separate online access to prevent the transfer of funds. If they need reserve money, they need to ask the board for it. The board can write a check to the operating account. Incoming checks should go into a separate, deposit only, account that the mgmt company does not have access to.

The operating fund should be controlled by the mgmt company and only have enough money to operate the HOA. This is the only money they should be trusted with. The board should regularly transfer funds into this account from the incoming checks account to run the HOA.

As for board members stealing funds, there needs to be checks and balances. Form a finance committee who's sole job is to continuously audit the books. Every month, quarter or 6 months they need to look over everything, original bank statements, etc. Make sure everything looks good. If its done on a regular basis, it shouldn't take much time.