Requesting Documents Prior to Meeting

Talk to your other Board Members on replacing the PM if they are not fulfilling the duties you are paying them to perform.

If the PM only provide financials for 1 month; as Treasurer, you should have picked this up right away and requested the rest. The PM's response to you is silly, but if you noticed the issue and never informed them, then that was silly too. I suppose the rest of your Board was silent too.

In this case, why attempt to be difficult and combative? Simply indicate your availability and tell the PM to provide the desired financials when you need them or when their contract says they are to provide them.

It's ok to ask for the appropriate financials, but irresponsible not to attend meetings. You are a board member and there are other things besides the financials that need to be discussed, so it's your responsibility to be there.

I was treasurer on my Board and we have a few incidents when our reports didn't show up on time. They were supposed to arrive by the 10th of the month, but when they started arriving up a day or two before the meeting, I asked the property manager about it (during an open board meeting) and learned they were late because other departments who provided information for the report were late (she had to review the entire report before it went to the Board).

That was followed by an email to the president of the company (copies to the property manager and the rest of the board). He apologized for the delay, the head of the department that was causing most of the trouble also sent me an email to apologize and it never happened again.

As for you, might I suggest that you talk to whoever is over the property manager, providing recent examples of the problems and ask how the company will respond to ensure these are fixed and don't happen again? Start by discussing your concerns with the rest of the board and go on from there. Personally, I'd ask for an executive session to discuss the matter and then send a letter to the company, copying the property manager so he/she has a chance to explain.

Give the manager time (90 days or so) to correct him/herself and if it doesn't work, ask for a new property manager to be assigned - and if that doesn't work, find another management company.

I agree with Richard. Typically a PM Company will send monthly financials. As Treasurer it would be one's job the keep track of them.

Our PM prepares monthly reports that can be over 12 pages long. These reports are electronically sent to each BOD Member. Owners can get "reduced" monthly reports (Profit/Loss, YTD) when they request such. They could get most of the 12 pages (less delinquent list) if they requested so but only one owner ever did request such.

John

I will trade you, ours are 85 pages or more.

Suzie,

YOU are the treasurer.

YOU should be the one creating the financials based on input from the PM.

YOU should have the bank statements and control the check book.

YOU should have copies of all deposit slips.

YOU should perform an occasional (I did one at the 6 month mark) audit of the ledgers just to verify that the PM is performing their duty properly in regard to financials.

YOU should prepare and track the budget.

THIS IS YOUR RESPONSIBILITY AS TREASURER.

You may, of course, delegate various tasks. However, the responsibility remains with the Office of the Treasurer.

If these things are not occurring, you should take steps to make them occur or step down as treasurer.

Here is some more info:

Best Practices #4 Financial Operations from the Foundation for Community Association Research

Spotlight on you the Treasurer a handbook by the National Association of Parliamentarians

Responsibilities of the HOA Treasurer Youtube video by Community Association Law Group

Subject: Duties of a new HOA treasurer 2010 thread on this forum

The Board Member Tool Kit; A GUIDE FOR COMMUNITY ASSOCIATION VOLUNTEER LEADERS from CAI

Treasurers Guide to Community Association Finances by CA Executive Council of Home Owners

2015
TREASURER’S ACCOUNTING HANDBOOK & PROCEDURES MANUAL by a CPA firm
From this manual:

Congratulations! By electing you Treasurer of your Association, the membership has demonstrated its confidence in your abilities to lead the Association towards fiscal responsibility and financial stability. Whether you are a seasoned Chief Financial Officer or a layperson that generally has trouble balancing your own checkbook, this manual is designed to give you the tools necessary to do a great job.

IMO, it would be reasonable to respond that, as Treasurer, you want the meeting scheduled exactly one week after you and the other board members receive the complete financials for the prior 90 day period.

This should typically be sometime between the 15th and the 25th of the month so there is ample time for the grace period and posting of that month's payments.

Richard,

I didn't write the quote. It came from a publication.
I used the quote to stress a point - that the publication may be helpful.

As for the list of things, if the Treasurer isn't taking that responsibility, then that individual should step down or the Board should remove them.

Tim

Tim

First, let me say I have the utmost respect for you and for all the help you provide daily for people coming to this site.

Self Manage and Professionally Managed are two different entities. Your's works because, as we all see here, you put the time in. In the vast majority of HOA's throughout the U.S. that doesn't happen.

Let me answer some of the questions you identified on the survey.

1) Do you have control of the Association financial accounts?
If professionally managed the operating account will be at the bank the MC has a banking relationship in order to provide, at the lowest cost, all the services that may be required, lockbox, free banking, ACH, online banking access. Per California statues, reserves accounts are in total control of the Association and can be with the bank of their choosing.

2) Do you prepare the financial statements for the meetings?
We prepare the financials for the meetings. Depending on the size of the Association, it can be up to 100 pages. It is quite detailed. I am a firm believer in complete transparency. With the exception of the bank reconciliation, all reports are available as of the the 1st of the month. I also include a customized Financial Summary Report for each Association. All minutes, financial reports for the homeowners and associations rules are on a website built specifically for them.

3) Do you control the check book?
We write the checks out of the operating, only after the Board has reviewed the invoices corresponding to the check and given their authorization. Reserve checks, per California statues, must be signed by two Board members.

4) Do you receive the Bank statements?
Bank statements are included in the monthly financial reports and per California statues MUST be reviewed by the Board on a quarterly basis.

5) Do you have copies of all deposit slips?
All homeowner deposits are done with lockbox. Any payments done through escrow, deposit slips are included with the financials.

6) Who reconciles the bank accounts (you, a PM/MC, employee/temp or an independent contractor)?
All bank accounts, operating and reserve are reconciled with the MC software.

7) Are you self managed or utilize a management company, property manager, employees, temps or independent contractors?

8) Do you keep the individual lot ledgers (or someone else)?
We maintain the individual lot ledgers and are available as part of the general ledger or their separate report.

8a) (for those utilizing an MC/PM or Independent Contractor) Do you verify those ledgers?
In California, any association with income over $75K, an annual review MUST be performed by a CPA. For a few dollars more an audit can be done, but quite frankly, it's a waste of money. If there are serious issues, an HOA would want to spend the money on a forensic audit.

If an Association doesn't want to be involved on a day to day basis with the "chores" you outlined above, then they may vote to hire an MC. They are two programs an MC can provide, full or financial. If they don't want the day to day involvement they may should full service. There are some that like the day to day, but don't want to be involved with the financial aspect, then they may choose financial only. I provide both.

It's hard enough to get warm bodies to become board members and then slotting them into specific roles or officers is something else. Then you get into politics. The best qualified is a new member (outsider) that a board doesn't want them to know what they have done, or it a power grab.

Most here have either lived in one, two or three different associations in their lifetime. I have lived in one, but have been involved in almost 100, so I have a different prospective. I have seen good MC's and I have seen bad MC's. I have seen a few self manage go MC managed and those weren't pretty transitions. I have seen MC managed that wanted total, total control, and we felt it best to felt them go.

Lastly, I recently changed CAI chapters. The difference was night and day. For the past three months, I have been involved with our Educational Committee. Where one chapter had one class held twice a year for Board members, this new one has 2 classes, one with 8 parts and classes are held monthly. Different mindset, which is quite refreshing.

Douglas,

Yeah, I keep reading a lot of things like that on many of the posts here.

But still, logically, it doesn't make sense that the treasurer can be held responsible if he/she is not even aware of mistakes or shenanigans that are going on with the MC. They are getting paid the big bucks and from what I can see, they do not even try to get things right. They just do what is easiest.

If missing funds comes down to a lawsuit, are you saying that the treasurer would be held liable?

Yes, Yes, and Yes.

But, But, and But.

1. The Business Judgment Rule allows the Treas to reasonably rely on an expert.

2. Directors and Officers Insurance protects the Treas from personal claims.

3. Fidelity Insurance protects the Treas re missing money if he acted reasonably.

For every potential liability, there is protection if the Treas acts with reasonable diligence and in good faith.

From what you posted, the MC should be your treasurer and I thought that was a fairly common thing when an HOA has a MC running things. If you are the treasurer, you should have complete and unfettered access to your own financials, especially with all being online now. If you don't then why are you treasurer exactly? And that would be the question I would ask the board and the MC. As suggested, check your own documents to see if it does say who is to be treasurer. Ours state that the president is to sign all checks, but that doesn't mean they to have to be the treasurer.

Also, you can now approach the MC and ask him to please detail what your tasks are exactly as the treasurer. He opened the door completely with his asking you why you did not inform him.

Tim is right, the Treasurer is responsible for all of that and if the HOA hires a MC although some of those responsibilities can be turned over the MC, at the end of the day, the office of treasurer is on the hook for any problems. When the crap hit the fan in our HOA, the board was on the hook solely, the MC didn't even need to show up because they weren't officers or board members. (we would have to turn and sue them personally was how it was explained to us)

And although there are a few good ones around, most management companies prefer to have a board and officers that are not completely clear on just what their responsibilities, it gives them all the wiggle room necessary to do as they think is best without worry. And from what you say, yours could be one of them. Good Luck

What I'm trying to say, is the Board is responsible, not an officer. I imagine the officer, let's say the treasurer, could be entirely responsible if s/he embezzles or commits other acts of fraud.

Here, our bylaws permit us directors to delegate the management of our Association's pottery an fines to an MC, which we do. We directors receive over 100 pages of financials every month about a week before our Board meeting. Also, a week before the Board mtg., our Finance Committee, chaired by our treasurer, meets. This FC queries the PM about all manner of expenses. The FC recommends to the Board to approve the financials continent upon the year -end audit.

Our current president makes investments into CDs & Money Mkt accounts and she provides her report at the FC mtg.

Among us 7 directors, I believe I'm one of two who scour the financials and email questions about them to our PM.

With three operating and three reserves budgets, plus a construction defect (CD) account it's pretty complicated around here. This month, for instance, I saw a $10,000 "Plumbing" expense from our CD funds that I didn't recall the Board approving. But, asking our PM, it was actually an expense for corroded pipes & fittings (high rise bldg.), which had, indeed, been identified as a CD and we had indeed approved it in a way that was not one $10,000 expenditure but an overall project.