KateS2 (Connecticut)
Posts: 41
Posts: 41
Posted:
Do other HOA's deal with debit card's. If so how many are issued and do you have a limit on it and who can use it. Just officers or just the President.
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Debit Card's
Started by KateS2 • 9 replies • 1676 views
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MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
We only issued credit cards never debit cards. Plus approval of the expense had to be pre-approved with the board before purchase with the card was allowed. Whoever was on the account's signature card was the one with the card. Which is usually the officers of the HOA.
The debit card system works different than credit card. It's best for a corporation to use credit cards for purchases due to the many protection options it offers. Otherwise using a debit card is like using cash. I'd consider it like "petty cash".
The debit card system works different than credit card. It's best for a corporation to use credit cards for purchases due to the many protection options it offers. Otherwise using a debit card is like using cash. I'd consider it like "petty cash".
Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
We do not use debit or credit cards.
DonA2 (Arizona)
Posts: 170
Posts: 170
Posted:
We don't use either one.
LarryB13 (Arizona)
Posts: 4,099
Posts: 4,099
Posted:
Kate,
My association has had a debit card issued to one board member/officer for several years.
We have an unusual situation in that our properties are all 36-acres and larger scattered over several hundred square miles in northern Arizona. Our association exists mainly to keep the dirt roads graded. We own our own road grader and a few other pieces of heavy equipment.
Our VP of Roads found early on that our normal routine of writing and approving checks was just not going to work. Our management company was located nearly 200 miles in one direction and the places we needed to go for fuel, parts, and supplies were all 75 miles away in the opposite direction. In addition, road maintenance is dependent upon good weather and that can change in just moments. While some things could be purchased and paid for in advance, other things, such as breakdowns, occur without warning. Our bylaws allow directors to spend their personal funds and seek reimbursement but few parts or services at the Caterpillar dealer cost less than a thousand dollars.
We decided to open a special checking account for the specific purpose of getting a debit card issued for our VP of Roads. We initially transferred $10,000 into the new account. At each board meeting the VP is required to bring the receipts for his expenditures and, if all is good, the board then approves bringing the funding back up to the original $10,000. We have been doing this for at least seven years and it has worked out well. The VP is able to purchase what he needs when he needs it. This debit card is the only one we have and only the VP of Roads may use it.
I think the key to making this work is the special account with limited funding. It limits unauthorized access to just the money in the account. Our primary account is safe at another bank. The holder of the debit card is an elected member of our board and not an employee of a management company. Yes, the VP could steal the money and fly to Brazil but how long will he be able to remain there with the limited funding of the account? (BTW, most thefts of HOA funds are committed by management company employees rather than homeowners.)
My association has had a debit card issued to one board member/officer for several years.
We have an unusual situation in that our properties are all 36-acres and larger scattered over several hundred square miles in northern Arizona. Our association exists mainly to keep the dirt roads graded. We own our own road grader and a few other pieces of heavy equipment.
Our VP of Roads found early on that our normal routine of writing and approving checks was just not going to work. Our management company was located nearly 200 miles in one direction and the places we needed to go for fuel, parts, and supplies were all 75 miles away in the opposite direction. In addition, road maintenance is dependent upon good weather and that can change in just moments. While some things could be purchased and paid for in advance, other things, such as breakdowns, occur without warning. Our bylaws allow directors to spend their personal funds and seek reimbursement but few parts or services at the Caterpillar dealer cost less than a thousand dollars.
We decided to open a special checking account for the specific purpose of getting a debit card issued for our VP of Roads. We initially transferred $10,000 into the new account. At each board meeting the VP is required to bring the receipts for his expenditures and, if all is good, the board then approves bringing the funding back up to the original $10,000. We have been doing this for at least seven years and it has worked out well. The VP is able to purchase what he needs when he needs it. This debit card is the only one we have and only the VP of Roads may use it.
I think the key to making this work is the special account with limited funding. It limits unauthorized access to just the money in the account. Our primary account is safe at another bank. The holder of the debit card is an elected member of our board and not an employee of a management company. Yes, the VP could steal the money and fly to Brazil but how long will he be able to remain there with the limited funding of the account? (BTW, most thefts of HOA funds are committed by management company employees rather than homeowners.)
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
We don't use them. Once upon a time, we bought Visa gift cards with a specific amount and used it as a form of petty cash. The president had it because she or our handyman occasionally made small purchased for the common area (e.g. grass seed for a bare area.) Like anything else, receipts were mandatory, otherwise the president or handyman would have to pay it back and cough up the card.
Thankfully, we had honest people for a president and handyman, but today, we don't use them or have a petty cash line item. If a board member has an expense for something done for the Association (e.g. printing costs for a newsletter), that expense must be approved by the board before it's paid.
Thankfully, we had honest people for a president and handyman, but today, we don't use them or have a petty cash line item. If a board member has an expense for something done for the Association (e.g. printing costs for a newsletter), that expense must be approved by the board before it's paid.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
DouglasK1 (Florida)
Posts: 2,046
Posts: 2,046
Posted:
Quote:
Posted By TimB4 on 06/16/2016 2:26 PM
We do not use debit or credit cards.
We do not use debit or credit cards.
Same here, no real need for us.
Escaped former treasurer and director of a self managed association.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
I do want to mention that we used our credit card for semi-large purchases if we had any. Instead of applying for a loan, we would use the card. It was good for emergencies. Keep in mind our budget was a real non-profit situation. We did collect as much as we collected. A credit card payment was about all we could afford to avoid a special assessment situation.
Former HOA President
LarryB13 (Arizona)
Posts: 4,099
Posts: 4,099
Posted:
I also want to add that the expenses our VP pays with our debit card is money that already has been budgeted for that purpose. We have never had a situation arise where the VP has used the funds for something not directly related to road maintenance.
JoyceR2 (Virginia)
Posts: 156
Posts: 156
Posted:
Any money needs to be safely nailed down from board members and management companies. Allowing members to spend their money and be reimbursed can be tricky in the world of perks and rewards and even deals etc. And receipts can also be a point of contention.
Regardless of the situation this is not a limb I would care to crawl out on.
Regardless of the situation this is not a limb I would care to crawl out on.
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