HOA Bank Account Acess

MichaelY2 (Florida)
Posts: 2

Posted:

New to our board which had the same board for 20 years. I and another person were just recently appointed President and Vice President. We have the same treasurer who is the only person on the account as far as we know. Shes an 80 year old woman and her son in law used to be the Pres, how can i ensure that nothing shady is going on and should the president or myself also be on the account? First thing on my agenda is getting a management company to enforce the covenants.

LetA (Nevada)
Posts: 2,679

Posted:

All members of the board should have access to the account and have signature cards on file with the bank.
You as President or VP can call for an audit of the associations financials.. When is the last time your books was audited? had a reserve study completed?
Taxes filed?

Time to turn up the heat is my guess.. Why hasn't your MC been on her?

MichaelY2 (Florida)
Posts: 2

Posted:

They never hired an MC in 20 years me and the new guy plan to vote and hire one.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I agree that all Board members should be on the signature card.

You ensure that nothing shady is going on by having annual or biannual (every two years) financial review or financial audit by an external CPA.

The financial reports given at each meeting should be giving a good to excellent indication of what is going on.

GenoS (Florida)
Posts: 4,276

Posted:

A management company will not enforce the covenants. That's up to the board and a fining committee.

If you're thinking fines, be aware that the Florida HOA and Condo statutes require a fining committee of at least 3 members who aren't directors, officers or employees of the association. In other words, you can't delegate the operation of the fining committee to your management company. A management company can be helpful, however, in finding violations and recommending fines to the board.

DouglasK1 (Florida)
Posts: 2,046

Posted:

We have our operating account and reserves at two different banks. So that no board member has access to all of the funds, two are signees on one account and two different board members are signees on another. We've instituted a policy that the treasurer will include the bank statements from both accounts with the quarterly financials presented at the board meetings so that all board members can compare and make sure they match.

Escaped former treasurer and director of a self managed association.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our Pres and Treasurer are both account signers. The rest of the BOD is not.

JoyceR2 (Virginia)
Posts: 156

Posted:

Awesome.

SheliaH (Indiana)
Posts: 6,964

Posted:

Interesting that no one else seemed to be bugged by the fact this lady's son in law was president and she was treasurer - maybe nothing did happen, but the optics are really shaky. In addition to hiring a management company, you should get an audit right now of the association's records to be sure.

You might want to put in several checks and balances besides limiting who goes on the bank's signature card - the association attorney and an independent accountant may be able to assist you with setting up policies.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

GwenG (Florida)
Posts: 669

Posted:

One should check Bylaws before authorizing signatures. Our Bylaws require TWO officers--not board directors--officers--- to co-sign all checks. At one time, the board authorized the MC to sign checks and members protested that the Association would NOT be covered by any insurance since the Bylaws were not being observed by the HOA. The MC protested and tried to bluff legalese about it, but members were insistent that this was a violation by the board of its own laws. The board finally took the MC off the accounts signature cards.

A Management Company can only "educate" owners about the rules and covenants and assist in identifying and validating complaints. As another poster pointed out, the MC cannot be the "enforcer" and the process of fining is quite detailed by statute and must be supervised by the Board to comply with the laws of Florida.

It must also specifically be permitted by the Declaration. In the case of my HOA, there is no provision authorizing HOA to fine owners for violations. There were two attempts to "amend" this but it was defeated both times.

GwenG (Florida)
Posts: 669

Posted:

One should check Bylaws before authorizing signatures. Our Bylaws require TWO officers--not board directors--officers--- to co-sign all checks. At one time, the board authorized the MC to sign checks and members protested that the Association would NOT be covered by any insurance since the Bylaws were not being observed by the HOA. The MC protested and tried to bluff legalese about it, but members were insistent that this was a violation by the board of its own laws. The board finally took the MC off the accounts signature cards.

A Management Company can only "educate" owners about the rules and covenants and assist in identifying and validating complaints. As another poster pointed out, the MC cannot be the "enforcer" and the process of fining is quite detailed by statute and must be supervised by the Board to comply with the laws of Florida.

It must also specifically be permitted by the Declaration. In the case of my HOA, there is no provision authorizing HOA to fine owners for violations. There were two attempts to "amend" this but it was defeated both times.

GwenG (Florida)
Posts: 669

Posted:

One should check Bylaws before authorizing signatures. Our Bylaws require TWO officers--not board directors--officers--- to co-sign all checks. At one time, the board authorized the MC to sign checks and members protested that the Association would NOT be covered by any insurance since the Bylaws were not being observed by the HOA. The MC protested and tried to bluff legalese about it, but members were insistent that this was a violation by the board of its own laws. The board finally took the MC off the accounts signature cards.

A Management Company can only "educate" owners about the rules and covenants and assist in identifying and validating complaints. As another poster pointed out, the MC cannot be the "enforcer" and the process of fining is quite detailed by statute and must be supervised by the Board to comply with the laws of Florida.

It must also specifically be permitted by the Declaration. In the case of my HOA, there is no provision authorizing HOA to fine owners for violations. There were two attempts to "amend" this but it was defeated both times.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

When we hired our MC one thing they agreed to do was to be our "enforcer". Our violation letters and fining letters are BOD directed/controlled but they come from our MC. Any appeals are heard by the BOD.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JohnC46 on 10/05/2017 1:22 PM
When we hired our MC one thing they agreed to do was to be our "enforcer". Our violation letters and fining letters are BOD directed/controlled but they come from our MC. Any appeals are heard by the BOD.

This sounds like a typical arrangement. We received a bid for property management services last year that contained a colorful marketing brochure. One section of it advertised how they would act as the cops for violations and therefore relieve the board from having to deal with fielding complaints and phone calls at all hours. They conveniently left out the part where it's not that easy, at least in FL.

JoyceR2 (Virginia)
Posts: 156

Posted:

Trust me it does not have to be only a issue with direct kin for things to go south. All you need is a "leader" & a loyal "follower" with no one especially the other board members doing checks & balances ongoing.

JoyceR2 (Virginia)
Posts: 156

Posted:

Trust me it does not have to be only a issue with direct kin for things to go south. All you need is a "leader" & a loyal "follower" with no one especially the other board members doing checks & balances ongoing.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By SheliaH on 10/05/2017 11:55 AM

Interesting that no one else seemed to be bugged by the fact this lady's son in law was president and she was treasurer - maybe nothing did happen, but the optics are really shaky.

Shelia,

Should it happen? No, at least not in my opinion.

However, to be realistic, when there is apathy within the membership or apathy on the Board (i.e. I don't want to be treasurer or I won't serve as President), then Associations have to do what they can to continue to function.

Since I actually faced such an issue (lack of volunteers to serve or those volunteering only willing to do this over that), I'm becoming a little more realistic vs. idealistic.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By TimB4 on 10/05/2017 3:19 PM
However, to be realistic, when there is apathy within the membership or apathy on the Board (i.e. I don't want to be treasurer or I won't serve as President), then Associations have to do what they can to continue to function.

This is very true. We're having an extreme bout of this in my HOA right now. The president has gone rogue and the rest of the board is not inclined to do anything about it because that would entail getting someone else to be the president. That single consideration is causing major problems at the moment. Some homeowners are upset about the situation, but not upset enough to step up and serve.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By TimB4 on 10/05/2017 12:58 AM
I agree that all Board members should be on the signature card.

You ensure that nothing shady is going on by having annual or biannual (every two years) financial review or financial audit by an external CPA.

The financial reports given at each meeting should be giving a good to excellent indication of what is going on.

Tim hit the nail on the head. Also, you should have others (other than the Treasurer) sign checks. You should potentially NEVER have any individual who receives and deposits money, balances the checkbook, writes the checks, makes the budget, etc., be the individual who also signs the checks. That will give you an additional check and balance system.

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By JohnC46 on 10/05/2017 9:56 AM
Our Pres and Treasurer are both account signers. The rest of the BOD is not.

My last association was the same way. This should be the bare minimum.