Same day deposit of funds

Started by ChrisP5 • 8 replies • 1352 views

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ChrisP5 (Missouri)
Posts: 165

Posted:

I have recently noticed that our MC isn't depositing funds into the bank the same day that they are being recieved from homeowners and entered into the accounting system. From what I can tell they dues are being opened, entered into the accounting system and even having the deposit slips prepared. Before anyone brings it up I know it isn't a business day cut off issue because our bank doesn't have one (one of their marketing tactics). This concerns me for a few reasons

1) Funds aren't earning interest, however small the amount may be
2) There is an increased risk of resident ID theft if there arechecks sitt ing in the MC office

The bank that we use is incredibly close to the MC offices so the drive shouldn't be an issue. Does anyone have any thoughts on this or is it much ado about nothing?

RogerB (Colorado)
Posts: 5,067

Posted:

Chris, considering the significant aspects of protecting the HOA's money I think this is much ado about nothing.

MicheleD (Kentucky)
Posts: 4,491

Posted:

You don't say how long the deposits are taking to get to the bank.

But even without that info, unless it's something like a week or more, I think it's much ado about nothing.

In fact, it's a little like micro-managing.

ChrisP5 (Missouri)
Posts: 165

Posted:

It is often several days, sometimes up to a week. I didn't set out looking for it but I came across it this week when I was trying to balance the December bank statements and couldn't find some deposits that showed up on our December financial reports. I guess I am more used to our rules at work which pretty much mean I go to the bank every afternoon on the way home.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Chris,
It has to be asked? How and why did you find this out? What else is going on? I take it you have some responsibility for oversight of association funds, maybe a board member.
If you have the assignment, why donm't you ask the MC? They do work for the Board don't they.
Let's hear 'the rest of the story'.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Chris,

As others have said, I too think this is much ado about nothing. When I was treasurer of an HOA I didn't make deposits immediately after receiving checks. The bank was very close to me but I wasn't going to run there constantly to deposit a small amount of money.

I'm sure there are other more important things that you can be spending your time reviewing, etc. But, if this really bothers you, why not just ask the MC what his policy is on making deposits? Oh, and regarding loss of interest, that shouldn't be a cause for worry at all. Usually interest on checking accounts (if there even is any!) is very small and at this point in time probably almost nothing. My checking account earned $.14 last month with an average daily balance of over $3,000!!!

ChrisP5 (Missouri)
Posts: 165

Posted:

Robert - I found it when I was reviewing our financial statements and comparing them to the bank statements when I was curious as to why the amounts weren't the same. I am the treasurer of our association so yes I do have oversight responsibility. The background is that professionally I have worked for and work for an organization with very strong internal controls because we deal with large amounts of money. Based on all the news I see on the front page of this site and looking at our associations internal controls I can very easily concoct lots of ways that our funds could be cleaned out especially since we don't have a fidelity bond (yes I am working to change that). It turns out I may need to lower my expectations just a bit.

RogerB (Colorado)
Posts: 5,067

Posted:

Chris,
Even when one goes to the bank everyday, deposits made the last day of the month may not get posted by the bank until the first day of the next month.

Following is a real case example for the end of December 2009.
1) Several checks arrived Thursday, December 31st and were posted in the accounting software.
2) These entries were included in the December and EOY financial reports which were emailed to all Board members on January 2nd. The checks received were displayed in the general ledger, but not included in the December bank statement.
3) These checks and others received on January 4th were deposited into the bank checking account on Monday, January 4th.
4) The total amount deposited on January 4th, and all other account transactions received by the bank, can be view by Board members at the bank's website whenever they chose.

If your idea of making deposits daily is to monitor the HOAs funds IMO that is ineffive micromanaging. If it is to monitor the funds you can request a copy of the monthly reconciliation reports and bank statements.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

ChrisP,
I don't believe your concern is to micromanage as some are suggesting. I think maybe the question you raised could have been taken a number of ways. I take it to mean you are uncomfortable with what you have been able to verify and you are asking how and where should you look for answers. But, no mind, time to move on and continue with the mind set you have and that is to do the job as well as you can, accept your responsibilities and be guided by your experience, which is certainly noteworthy, and your associate is lucky to have you. It never harms to ask questions.

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