ISO Input on Best Banking Practices

Hi, all. I'm a new board officer for our small HOA. Currently, the totality of our HOA funds (i.e., monthly dues, special assessments, reserves, move-in deposits and general operating monies) are housed together and intermingled in a single checking account. (And we rely on updated spreadsheets to know what's what.) I imagine that part of the thinking in setting things up this way was to avoid banking fees. (I get that. No one likes fees.) But is this recommended or best practice? As a novice, I'd appreciate some input and advice on the pluses and minuses of keeping all HOA funds in a single pot.

Thanks!

Reserves are better off in a different account. High interest the better. However what do you call your reserves? Is it more like savings or capital expenditures? There is a difference.

We used checks that required 2 signatures to sign off. They were officers and approved signatures at bank.

You may want to look into it other bank options. Not every bank is equal. I recently went bank shopping myself. Did lots of comparisons. It was not the bank fees in some cases. It was the services. You get what you pay for.

I was able to avoid fees by making an automated deposit from a savings account. This avoided fees if auto deposit set up.

In Calif, reserve accounts must be separate from operating accounts.

https://www.davis-stirling.com/HOME/H/HOA-Reserve-Accounts "Associations must set up bank accounts that are separate and distinct from their managing agent's funds and must separate their operating and reserve funds into separate accounts.

 A "Reserve Account" refers to money the association has set aside to defray the future repair or replacement of, or additions to, those major components which the association is obligated to maintain. (Civ. Code § 4177.)
"

So it's more than a good practice in CA. MO might have similar statute? Or, your Bylaws or CC&Rs might say a something on this topic.

From https://associationtaxes.com/?view=article&id=19:reserves-as-capital-contributions&catid=12:articles:

[For Form 1120] Money must be HELD IN SEPARATE BANK ACCOUNTS from the operating (noncapital) bank accounts of the association (Revenue Rulings 75-370 and 75-371)

Does your HOA carry any capital budget needs? You don't replace roofs or take care of the roads etc...? If not, then you may not need a capital fund set up but just a separate emergency savings fund. Many HOA's that have a large need for capital improvements have separate accounts and investments for that. A smaller HOA like mine was, had no need for nothing more than a separate emergency savings fund. Which usually was funded just by any savings or non-spent money we may have had over time. We didn't build in a savings with our dues as we were a non-profit. Capital is usually built into the dues collections for funding.