Audit of Management Co. that works for HOA

If most of the board does not agree to audit the management company, can majority vote of homeowners overide this?

Basically our treasurer who is a board member is working for the homeowners and trying to get an audit with homeowners that don't even pay their dues. She, along with the homeowners believes that the hoa's hired attorney is working with the management company to steal their money? Over half of the board of directors disagree with this audit and think it is unfair to the management co. We don't suspect a problem at all because the numbers make sense. We are not to sure what is going on with the treasurer and have discussed getting her replaced. Please assist and help with the initial question.

Thank YOu

The short answer to your question is "probably not" with the emphasis on "probably".

You've really got a couple of logistics issues here. First the management company (MC) is hired by the Board of Directors (BOD) to assist in the running the HOA. Undoubtedly that relationship involves a contract that calls for some level of financial reporting from the MC to the BOD. Usually those reports are substantial enough (when coupled with your HOA's bank statements) to be able to detect anything "funny" going on. It's the board that has the responsibility to review these and ultimately inform the HOA members of the financial state of affairs of the HOA.

In most cases, individual HOA members can get access to the financial records, but typically you'll have to jump through a couple of hoops (e.g. put in an advance request, go to the MC office and pay for the copies you want) to do so.

RicH1, I believe you mean an audit of the HOA, since the association does not audit the management company. The Board could assign the Board member and other members to do a financial review, but that is totally up to the Board. If your Treasurer thinks "that the hoa's hired attorney is working with the management company to steal their money" she needs to either do the job of the Treasurer or be replaced.

We provide monthly accounting reports to every Board member with an email address plus quarterly bank statements if requested. This provides an on going financial review by the Treasurer and the other Board members.

Rich - O.K. so the answer to your specific question will not come from this forum, but rather from your governing documents. Here are my summary thoughts on this issue:

1). This doesn't require an "audit" per se. It merely requires the treasurer to review the attorney's work and invoices/statements. It's likely that the attorney is charging an hourly rate for work done. The Board should compare that hourly rate in your local marketplace to see if they feel the charges are excessive. Factors that should be taken into account in this judgement include the perceived quality of the attorney's work, the attorney's responsiveness to HOA requests, and whether or not this particular attorney specializes in community association practice or not. Since you're in GA (I'm in suburban Atlanta) a fair yardstick for community association practice attorneys is in the $200 - $300/hour range.

2). Typically your documents don't allow the membership to "compel" the Board to do specific tasks, but who knows yours' might - you need to read them.

3). Ordinarily, your documents do give the membership the right/opportunity to "recall" the Board and effectively "un-elect" them, but I'm not convinced that's what you want to do here.

My overall advice is to find out the rate the attorney is charging and make a judgement if that is reasonable for the services provided in the specific market where you are.

If I might interject something, since it's the homeowners who are delinquent complaining I would guess that the MC and / or the attorney add what can seem like exorbitant legal fees to the delinquent accounts.