Should I question a journal entry

Started by NancyM2 • 8 replies • 2011 views

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NancyM2 (California)
Posts: 249

Posted:

Roger; I am the poster that recently found an error in our financial's where a check was paid out of our HOA funds for repair's on our "in house" attorney's grandmothers residence for $1,399.50 The grandmother lives outside our community. ~~ see: "check sent to attorney's grandmother" posted 1/12/06

When I brought this to their attention they claimed it was an oversight (error) and promised that our HOA would be reimbursed. Upon recieving the financial's for the next month, I noticed the amount of $1,339.50 (not $1,399.50) was entered back in our financial's as a JE (journal entry)

Should I question why a journal entry, or is this standard operating procedure.

Nancy M.

CharlesW1 (Georgia)
Posts: 826

Posted:

I’ll have to familiarize myself with your previous post. I would think it would be in the best interest of your community if this “error” was brought to their attentions. If the board ever needs to look at the expenses paid in the past they need to have the correct amount. If your HOA was ever audited then you would need to show proof of where the money went and you would need to show the amount. I would think it would have to be the correct amount too.

Not sure though.
Chuck W.

Charles E. Wafer Jr.

RogerB (Colorado)
Posts: 5,067

Posted:

Nancy, as I recall it was recommended you demand repayment plus take other actions. I would never have an attorney handling my money. Whoever is involved should be replaced. The first check appears to be attempted fraud, not an oversight and the journal entry for a wrong amount at the least indicates incompetance.

A general journal entry is a means of recording repayment depending on the software used. However, this could be a bogus cover up. Ask to see the document (repayment check or voided original check) which is the basis for this entry. People handling money must be trustworthy. Theft happens too often.

NancyM2 (California)
Posts: 249

Posted:

Roger; The reason our Mgmt co. gave for the error was that our atorney approves all expert invoices before they are paid by our Mgmt co. The check in question was to a firm that we have used in the ***** settlement, as well as the grandmother using this firm for repair on her residence. Therefore the over site occured. I don't think I believe them, but it would be hard to prove.

The grandmother was to reimburse the HOA for the error. My question would be why would this show up as a journel entry on the financial's. Shouldn't this just be a check from the grandmother ?

Also I noticed they credited the wrong line item when the amount was credited.

P.S. my previous posting about this matter was 7/12/06 ~ not 1/12/06

NancyM

RogerB (Colorado)
Posts: 5,067

Posted:

Nancy, if I understand this correctly the attorney made an error. Then the MC followed up and made the same error but blamed their error on the attorney. As I said there should be either the returned original check which has been voided or else a check from the grandmother for the correct amount. Either way the amount needs to be added into the financial records under the correct account to balance against the original check. This can be done through a general journal entry.

With your associations financial history I would recommend a quarterly financial review which includes independent varifications through bank and/or othe financial institution statements

JosephW (Michigan)
Posts: 882

Posted:

Journal entries are often used to correct errors. What should also be present is a deposit in the correct amount for that day or shortly after the date of the journal entry. Check the bank statement for that month.

Joe

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NancyM2 (California)
Posts: 249

Posted:

Joe; Great idea ~ Do I ask the Mgmt Co. for the bank statement. the bank statement was not with the financial's when I recieved them. I'm afraid to ask the Mgmt Co for proof of the deposit, as they will possibly tell me the monies was transfered out of a trust account the attorney was handling for her grandmother to the HOA account, therefore a journel entry was used. I like your approach much better.

NancyM

NancyM2 (California)
Posts: 249

Posted:

Roger; I agree all fingers point to the other person, with the history of all parties involved, it does make one nervious. I don't want to push this issue, as I have contacted my own attorney to look into the redactions on the financial's (35) of them on 8 different financial's ~ They haven't heard the last from me as yet.

You guys are my support group ~ Thank you sooo much.

NancyM

JosephW (Michigan)
Posts: 882

Posted:

You've already raised the issue. Just ask the accountant at the management company to help settle and close the issue. You just want to confirm that the error had been corrected and that the money was correctly deposited.

Joe

Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal

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