Quote:
Posted By NathanielM2 on 05/10/2017 9:50 AM
My HOA was under the micro scope for years now of allege misappropriation, our board don't have the money to hire a forensic audit. We are a 400 plus unit association. Does anyone have any practical advice on how we can find out if shenanigans are going out, over billing, kickbacks, dummy companies etc.
Thanks
A Forensic audit or a Financial audit? There's a difference.
A Forensic audit is conducted for the purpose of developing evidence for a criminal or civil prosecution, it involves highly skilled auditors or investigators. If there is over billing, kickbacks, dummy companies etc it is highly doubtful that a non law enforcement auditor would have the ability to obtain the records of the companies doing business with the HOA. You have to get those kind of records via the legal process such as subpoenas.
On the other hand a Financial audit is an audit of the books and financial records of the business or organization and while it may also turn up evidence of impropriety, is is used to determine if the business or organization is operating using generally accepted accounting principals. In it's simplest form it follows the money from receipt to disbursement. It might turn up suspicious transactions, such as invoices billing more than what is the reasonable amount for a service. Such suspicious transactions can then be referred to law enforcement for appropriate investigation.
I'd say you're better off just doing a financial audit and if the HOA is unwilling or unable to pay, then the members should be able to get access to the records and review them. The question is how far back do the records go, and how far back do you want to look at. An audit is really just basic math, what comes in - minus what goes out - equals whats left.