Assess to Bank Account Denied

Started by SidneyP • 28 replies • 3021 views

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SidneyP (Florida)
Posts: 302

Posted:

Hello All...it has been awhile since I have been on this site asking for help...but here I go again....Read the bottom letter first, as this is my e-mail to our "NEW" MC, the one above is his reply to me....I am the Treasurer but I do not write check or make deposits, the MC does all of this....all I want is a pass word so that I may look at our bank account(s)when ever I wish. I had this w/other MC's and feel this is my right...am I wrong? You guys are the smart ones.

As stated in my e-mail...this was/is the only way I know what is going on from day to day...like transferring the $20,000.+ dollars....After reading the news paper yesterday (and your site today) this makes me even more concerned about having this access...

Sid:

Please reference a date of the transaction so I can provide you the answer.

In regards of your job as Treasurer. This is not a "hands on job" for you - it is more of an executive/supervisory role. You have the responsibility to look at the bank statement, profit and loss detail, check register, balance sheet and the budget. Our financial package is an auditable package that we post online.

I do want to clarify your expectation though. We do not call, email, fax or write to the Treasurer before posting any payments as normal operating. That is far too time consuming and unproductive for our role. In regards to adding you as an online access to our account, we will not do that either. While I am sure you are trust worthy Treasurer - we have a professional responsibility to the Association and the Board to safeguard funds. We have insurance for this event and I am willing to extend the liability that is within my control. Internally, only 2 people in my office are keyholders - which is myself and my accountant. We use double authentication for payments as an internal practice. My firms handles literally millions of dollars and has been audited by recognized accounting firms for our practices. We will not waiver on our security and protections - sorry.

If you really need something to do to feel a part of the association and that you are upholding your role - you can and should be researching and developing investment strategies for our reserve account. Also sketching out work flow for how you plan to handle rentals in your community, Architectural requests, etc is most helpful.

Glenn

On Tue, May 5, 2009 at 3:14 PM, Sid wrote:

Hi Mr. Glenn....

I was checking the Bank of America account and saw that a check had been written for $20,741.04. My thoughts are that this money had been moved to a Wachovia account.

I feel that with me being the Treasurer that I should have been informed about this even though you have the authority to do so. Since I have been elected this position, I feel I have some responsibility (want to feel like I'm doing something) as to what is going on with our financials and would very much like to be kept informed. You know, stupid me, I keep paper files on everything. I would like to be given the account number(s) so that I can access the account on line.

Thanks,

Sid

SusanW1 (Michigan)
Posts: 5,202

Posted:

Sidney - I can see the MC point. She has been hired to run the day to day affairs, including bill paying, so you don't need to be looking over her shoulder.

HOWEVER, you should receive an itemized, detailed report provided to you (hard copy) at the end of the month. Then, if the board has any questions, you and the MC can speak with one voice. Of course, the board should have a fiancial report each month, but YOU need to have a detailed one.

Some kind of actual vs. budgeted column needs to be seen every month, too, along with a Balance Sheet reflecting all accounts.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

If the figures are available on the Net, I see no reason why the Tresurer shouldn't have access. If the PM's feelings are hurt, tough darts. If your BOD agrees, tell the PM to hand over the password. If your BOD doesn't agree, I'd suspect bigger problems are lurking in the background.

GlenL (Ohio)
Posts: 5,491

Posted:

The devil is in the details, evidently the account Sidney wants access to is not the HOA's but the MC's: In regards to adding you as an online access to our account, we will not do that either.

Studies show that 5 out of 4 people have problems with fractions

MaryA1 (Arizona)
Posts: 7,043

Posted:

Sidney,

I agree wholeheartedly with John! You are the treasurer and should have access to the bank statements and the password so you can get info on the account any time you so choose. Of course the PM should also be providing an accounting of all check written throughout the month. He implies you are not bonded but IMO as Treasurer you definitely should be on the fidelity bond (I think that's what covers financial actions). If you're not, then I would demand to have my name added. He may have his own ins but the assn should have their own also. Anytime the PM wants to hold back any info from any board member a red flag should go up! I see a BIG red flag!!! BTW, him citing insurance reasons for objecting is ridiculous! Also, in any further communications with him I would emphasize the fact that you're not questioning his accounting practices you just believe as Treas you have a right to all financial info. Also, perhaps the board should review exactly what authority they have extended to him. He shouldn't be making any decisions regarding the reserve fund, including where to invest the $$$, w/o board approval. Also, he shouldn't be paying any bills except for regular monthly expenses w/o board approval. I'm thinking he has far too much authority to act w/o board approval and that is definitely NOT good!

SidneyP (Florida)
Posts: 302

Posted:

He does post the financials but it is now the 9th of May and Aprils have not been posted nor has our tax information which had to be done by March 15th....All I know is that when I looked at our Bank account (the one in which I have always had access to it showed a $20,000+ check being written...I trust him but I still feel that for that much money, I/or a board member should know exactly what it was for when it was done, not weeks later. I am sure it was placed in the bank of his choice....he had left $5200. in the old bank account and has written a few checks on it and bank charges were taken out.

If he is insured then so am I as a director....I don't really care who has daily access to the account but certainly some Board member should have the ability to do so....Of course I do not want access to all of his accounts...shouldn't each property he manages have their own account? seperate account number?...That is the "only" one I want to see. It is "my/our" corporation and we should have the right, but as you see he says he will not change his policy....NO, I haven't talked to the other Board members yet, this just happened a few days ago. Doubt if it will help because they love the fact that they let him do everything....As you saw by his e-mail, I onlt have a title...nothing more.

Let's don't go there about our Reserve account...everyone on this site knows my problem w/that with all of our PM's...it was 2 years in April since not even one dime has been placed in that account except a little interest...His company was hired in Nov.08 and he has brought it up many times but nothing has been done.

I do appreciate all of your comments and hope for more...I will print these and take to the Board members along w/his e-maail to me and a copy of the bank account.....

MaryA1 (Arizona)
Posts: 7,043

Posted:

Sidney,

Glen has raised an interesting possibility, in that the account may not be in the name of your HOA but rather in the PM name or his mgmt co's name. If this is true, I would definitely complain about it. The PM should never comingle assn funds, with his own funds or those of other HOA's he manages. This is a big no-no. But the fact that he did say you have a right to see the bank statements tells me this may not be the case. The fact that he referred to the bank account "our account" may just have been a type (left off the "y"). But I definitely think this is something that needs to be researched.

DanaB1 (Connecticut)
Posts: 319

Posted:

I pushed to have our a couple members of our board have access to the bank accounts. The previous board, since removed, just relied on the management generated financials. Being a member of CAI and visiting other websites, including this one, over the years I read enough about funds being stolen from associations. The old board didn't even get copies of actual bank statements, not that those can't be forged also but at least it would have been a start.

It's nice knowing "first hand" where the funds are; and "if" they got moved and when. It also helps in that when we tell the manager to transfer funds that we know whether or not it got done.

The article posted here yesterday about the missing $400+ thousand just drives home the choice to me.

Although your manager sounds more articulate than many and he sounds like he has his reasons, in the end he works for you so it's your way or the highway.

I always laugh when people say, "We have to trust them." because that's always about the time you shouldn't.

Dana

GraceH (Virginia)
Posts: 224

Posted:

I have been reading the posts and can not find the one that mentions $400,000. Can you tell me where that is?
Thank you,
Grace

SusanW1 (Michigan)
Posts: 5,202

Posted:

Sidney - what do your HOA checks look like?

That will tell you whose name is on the account (his management company or the HOA corporation)

HB (Oregon)
Posts: 143

Posted:

I think it is totally reasonable for the MC to deny access. My reasoning would be that too many people with the ability to make significant changes could create problems.

You do not need to just put blind trust in your new MC. Make sure you receive monthly detailed accounting about exactly what came in and out. Ours is about 8 pages long each month and we often have questions. Our MC has always been forthcoming with any answers.

With regards to the $20,000 check, you should definitley know what it was for and where it went. I don't think being informed ahead of time is necessary and like your MC said can become time consuming.

Just review and keep tabs on the montly accounting. I think too many people having access to a bank account can become a liability in itself.

Just my two cents.

EllenS1 (Florida)
Posts: 1,148

Posted:

Sid,

As treasurer you should be allowed access to any bank accounts, etc. I think you should also be notifiewd PRIOR to any accounts changing hands. Has the board voted on any of this? The MC needs to have a tight leash on it to protect all members.

KirkW1 (Texas)
Posts: 1,665

Posted:

I can't say categorically what should and shouldn't be available as the offerings between banks vary. Some major national banks offer a view only access where the person with said access can only log onto a web site and view activity. But I would not count that every bank in America offers such. (And would sooner place money that many do not.)

If the bank does not offer a view only option, then I would have to side with management. The total cost will go up significantly when you have to deal with the additional people with potential access and mixing of who is responsible. (Which is exactly what would happen between the HOA and the management company should something go wrong.)

Now I would say that to a large extent the manager is right in that you hired him to run the place and deal with the daily business. Further, you should get an annual audit to ensure that the management company is being completely honest. This is how management works.

MaryA1 (Arizona)
Posts: 7,043

Posted:

To those of you who think the PM's position is justified, remember we're only talking about one extra person having access to the account and that person is the treasurer of the HOA. Unreasonable? I definitely think NOT. Frankly, I can see red flags going up and if I was the treasurer I'd have many questions for the board and the PM!!!

One other point to ponder. Why didn't the PM know exactly what the $20,000 transfer was for? I know our PM would have known in a heartbeat; she wouldn't have asked for the date so she could research it! So, is this just another piece of info he doesn't want to tell Sidney; if so, why? Another red flag!!

SidneyP (Florida)
Posts: 302

Posted:

Susan....right now he is using the checks from the old bank account of which I have access to..it is in the Associations name...I have no idea where the placed the $20,000.+ dollars or who's name it's in...As I said he had left $5,200. in the old account and I will be able to access that until it's gone...

JohnK3 (Pennsylvania)
Posts: 967

Posted:

As Mary noted, (if) HOA funds are being comingled with the PM's money, that's a major indiscretion that should be corrected immediately.

And Sid, if you, as Tres, have no idea where a big chunk of your cash has been parked, all the better reason for Web access to any accounts holding your HOA's dollars.

SidneyP (Florida)
Posts: 302

Posted:

Kirk...you are absolutely right, we did hire this Manage to handle our Association. I want NO access to writing checks or collection, I only ask to right to view our financials/bank account when ever I chose....As he was elected Manager I was also elected Treasurer and feel it is my responsibility to monitor such. If the Board has no right to interfer w/his managing then why have a Board...

If you have ever read any of my old post you will see that I am a very on hands person...I learned and aquaired all files concerning our HOA. I didn't take my job litely, I jumped in as if it were a paying job and gave it my all. I like hard copies and have files and files of information....HO's didn't take over the Association until 2005, since then there has been five MC's and ten landscapers. Not one MC has done their job...our delinquenties rose to 20 HO's with a balance due of over $20,000. (still due) our taxes files incorrectly and late, not one violation addressed, no lawn treatment (we have all weeds), sprinklers always in need of repair, not one dime placed in the Reserves for over two years....I am the only one who kept tabs of all of this and tried my best to change things, need I say w/not luck.....

Each time we have placed our trust in the MC and each time it has failed...HO are the owners of this corportation, we elect our Board and as elected officials, I feel it is our obligation to stay on top of every thing. If HO's are given the right to view all files of the Association then the Board should have the same right but a right to view any time, not just when the MC gives a report.It is our money not the MC's...I am the only one that knows that the $20,000.+ was moved April 20th., only because I had visual access to the old account.

Just because we hired this MC to manage our Association doesn't mean that there shouldn't be addition eyes keeping an accurate account of the day to day business. Trust works both ways, he's telling me to trust him, what about his trust of me...

I do thank you for your opinion, this is what I ask for. I just don't agree but both sides of an opinion can help me decide my next step in dealing with this matter. Thank you and all the others for your time.

SidneyP (Florida)
Posts: 302

Posted:

"Please reference a date of the transaction so I can provide you the answer" Managers e-mail

I'm with you Mary...how many $20,000. transaction did he make for that amount...

Because I wish to fulfill my job the HO's elected me to do, I was the only one who found that our taxes were filed late last year...I am the one who saw that $5,000. was taken from the Reserves, not once but twice in 2007 and deposited into the operating account (some was replaced but not all), I was the one who found that our Property manager had no license, it had expired. I was also the one who found out that the PM was not using licensed maintenance workers and was not filling our tax information or filing the 1099 on these workers.

I guess this is why I believe that Board members need access to all information I requested these files and most I found myself) and especially the financils.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

To all,
Well I'm late getting in here, but from the first post what sticks out at me is this is a New M/C and as you read on the last M/C gave some of the same problems.
I would expect all Board members to know what was agreed to in the contract with any M/C. I would expect the Treasurer to know exactly what the agreement was between the M/C and Board. This problem is not new, why hasn't it been resolved through a Board action. Apparently it hasn't, it needs to be. As far as a Board member knowing what an employee is doing and why is a no brainer. Of course they should, how can they do the Boards mandate if they don't have the information. What information is out of Bounds. None......if it has to do with the association's business. Where is the Board as a Board in all this?

As far as your next step? It should have been your first step. You are the treasurer, you want information to do your job (we assume this), if true, you need the weight of the Board to get compliance, the Board should respond that they are directing the MC to turn over the records you requested. The MC don't do it, what is left?
Your mandate (legal responsibility) is not to the M/C. it is to the people, YOU HAVE to conduct your association business with full knowledge of what happens to the money, you decide and again you are responsible.

Some one else mentioned, in effect, the tail is waging the dog.
Am I right assuming the association turned money over to the M/C and now the M/C says I am not telling you where that money went?
What do you report when you make a Treasurer's report, do you say, here is $20.000 I can't account for, to the penny?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Sidney,
I can't tell you enough, this is not about what you can do and have done or found out. It is about your legal responsibility to do the job you were elected to. It is much bigger that a he said, I said and we agreed on deal. You are obligated by law to carry out your state mandated duties and in some cases federal. The Board is responsible for the employees they hire, it is the Boards job to provide you with the information you need to do your job as you see it, in a reasonable proper and correct manner. You don't want to be put in the position of going before the judge and trying to justify your actions and reports, you can't get what you need, request it through the Board. The Board won't get it for you, consider resigning and getting a lawyer. Remember the Board gave you the assignment as treasure, they can take it away, the Board can not take away your right to be on the Board unless there is cause or the Board is dumb. I know some associations says the membership doesn't need cause to get rid of a Board member they elected.........good luck on that one if someone sues you. As a Board member you have the right to enter, anything in reason into the Board minutes, you have the right to go over the Board to the membership, you have the right as a Board member to get together a Board special meeting, or to form a group of owners and force a Special meeting for reason. This is powerful stuff............just be sure you are right, and if you feel exposed somehow to harm because you don't have the information the members need to conduct their business, I would consider all of the above.

DanaB1 (Connecticut)
Posts: 319

Posted:

Sidney,

If I go back to your first post, you sent an email to your manager stating that a check was issued for $20,000 from the account you can view online and you want to know what it was used for. In his reply to you the new manager never did state what happened to the money but instead gve you a bunch of comments about how they do things.

Here are my questions;

Did the board previously vote to have the manager pay someone or to open a new account with the $20,000? If not then who gave the manager authority to do anything with it? Most contracts allow a manager to automatically pay bills to a certain capped amount but it certainly shouldn't be $20,000.

That is a lot of money to move without the treasurer's (or board I would presume) knowing before hand.

If this is a new management company to your association than why wasn't the topic of access to viewing bank accounts brought up as part of the interview process?

Something isn't quite right here but I'm not sure that we have all the details either.

Gail,

The $400,000 I mentioned was from this article............. http://www.pnj.com/article/20090508/NEWS01/905080323/0/NEWS01/Woman+accused+of+bilking+association+of++484+196

Any association that relies on financial documents in their board packets that are 100% generated by the management company's copy machine is running the risk of finding themselves in trouble. Unless you have an "audit" performed yearly by an independent accountant; at which point your money could already be long gone.

Dana

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dana,

You said: "Something isn't quite right here but I'm not sure that we have all the details either."

Frankly, that is exactly what Sidney's problem is!!! IMO, this PM has got to go and perhaps the board too if they cannot see that it's not good sense to let a PM have the authority they've given him. This is an accident waiting to happen! It's really a sad state of affairs that Sidney is the only board member with an ounce of common sense. But even sadder that the majority of the BOD have NONE!!

DanaB1 (Connecticut)
Posts: 319

Posted:

Mary,

Not to go off on a tangent but in short our old board had only a couple members that did all the work. The dangerous thing was that the majority vote of the board could be swayed by the slanted opinion of only one or two members. The majority took these members' word as gospel because they failed to learn or research info on their own.

There is great difficulty in getting all board members to realize that being a board member is more then showing up to a meeting once a month. They think the manager does everything for the minimal amount he gets. Wrong!

Always makes me think of that TV commercial where the guys says, "I don't even know what I don't know!" That pretty much sums up a great amount of board members across the country. They don't know and don't want to get educated.

I applaud Sidney for being so involved, looking at documents and board packets and not taking them at face value and for realizing when things don't add up. You ever notice it's always certain board members asking questions and finding things out? These are the same ones getting educated at their own expense.

Dana

SidneyP (Florida)
Posts: 302

Posted:

"I don't even know what I don't know!" Dana...that is so true, never heard that before....

Dana, this is a long long story...you would have to go back to some of my eariler post to see the mess our Association has been in from the start w/our old President (worthless) It is to long for me to go into but I will lay out the later events...The President resigned finally after placing the HOA in deep doo doo financially, placing the VP she appointed who lived out of state(Maine) in charge...after she resigned and I had filed a complaint against the PM for not having a CAM license, she also resigned. The VP would not call a "Special meeting" (because he couldn't be in town)and we were unable to access our bank account for two months because everyone on the account had resigned.....I then resigned as Treasurer stating. "if I cannot do my job then I was useless"....A new MC was hired w/o a treasurer (a 4 not 5 man Board....After hiring this MC the VP resigned and the secretary resigned..I ran and was elected once again.

It appears the old Board gave him full reign of everything (before me)....and he had told them he used Wachovia but untill I saw the $20,000.+ check written on April 20th he was using our Bank of America account in which I had access....As my original post stated....I just wanted to be told what exactly the $20,000+ check was for and where did it go...As Mary said, he never did tell me, only that I would not be allowed account numbers or access (my assumption as to where it went).

About the other Board members, none of them know anything about this except one, she agreed with me that I should have this access but then after she read the PM's e-mail said "well, maybe not because he may have it tied in with other accounts"...I have written the other Board members and want a meeting...I need to find out just what authorities they have given him that I don't know about.... and yes, I will resign again, if I can not be given the access to the HOA's bank accounts. Why should the treasurer be blocked out from just looking (I want no access to the money) and keeping an eye on things.

There are other thing I wonder about...and I am the only one who questions these things also...Like all MC's when you hire a new one, they all want to chance all vendors...which he has done...He convinenced them that we didn;t need a Lake Doctor, he was given a 30 day notice and is gone...he then moved to the Lawn contract, said we were paying to much..another 30 day notice...we now have his choice (oh! they did vote, but followed his lead...we went from $600. a visit to $585.(WOW! big savings) a visit but he also cut our service to 25 visits from 46 visitsa year...need I say our grass is always in need of a cutting. Also our old lawn company fixed our sprinklers, there is an additional sprinklers man now, there goes our savings...Should I go on...we were paying $3100. for insurance...he didn't renew...we are now paying around $800....duh..I did question him about this, again I was the only one. His answer was I know where to go...and that was it. I am going to research this matter further, quite a difference wouldn't you say...

Sorry this was so long...once I get started, it's hard to stop...Again, thanks everyone....

DanaB1 (Connecticut)
Posts: 319

Posted:

Sidney,

How often do you have board meetings? It seems like your managers just run rampant and out of control, with your board just following along. What a mess.

Dana

GraceH (Virginia)
Posts: 224

Posted:

Sidney,
Please do not resign. People that take a true interest in their association is what the Board should be made of. I know that is frustrating but, in the end if you resign, who is protecting your investment?
What ever power was given to the PM, can be taken away. It is a matter of making the other board members aware of the issues and the willingness you and they have to fulfill the duties. (easier said than done I know)

SusanW1 (Michigan)
Posts: 5,202

Posted:

Sidney, at the next meeting motion to establish a Finance Committee (of yourself and 2 other general members with finacial experience) to go over all these transactions you have questions about. (there's too much information to go over at a board meeting)

The $20 grand could have been a transfer from one account to another, but he should have told you that. You should have asked WHY the money was moved. The $20 grand sounds like it paid several bills, so you may see lots of action with that money.

Unless he is writing checks to himself, I am not sure if you have enough information. He sounds like he is cutting costs. You will be able to find that out by looking at an itemized transaction report of the checking accounts, which you can request from him and it should take about 30 minutes to print out.

If push comes to shove, motion to have an audit, but be prepared to pay for that, too.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

This is 2009, there is no reason you cant have read-only access to every financial account your PM has.

If I were you, I would ask your PM to setup a mint account for you for all accounts. It will track all your bank accounts in one place and you can see up do date info whenever you like. I use mint for our HOA. Its read-only access so you cant do anything with the money, but you can see where its going. The $20,000 is a good example. In mint you should see a $20,000 debit from one account and a $20,000 credit in the other account.

Mint
http://www.mint.com/

Here is another one:
Quicken
http://quicken.intuit.com/online-banking-finances.jsp

AnneH2 (Florida)
Posts: 82

Posted:

Sidney-

Three words to Google will show you that you are doing the right thing by wanting access- Kravetz Realty Group.

The PM has no right to deny the Board. It's not the PM's money and they work for you.

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