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Property Management Blog

How the Association Protects Your Money

System - Tuesday, October 16, 2018

Homeowners - ThumbnailHomeowners all over the country have read alarming news accounts of management companies and board members embezzling funds from community associations—the homeowners’ money. Our association follows a few hard-and-fast rules to protect your money. They include:

  • We keep cash transactions to a minimum.
  • When a cash transaction is absolutely necessary, we make sure that more than one person handles it.
  • We never make out a check to cash, and we don’t make out a check that’s payable to the bank unless it is to pay a bank obligation, like a loan or mortgage.
  • We never make a payment to a vendor in cash. Instead, we always write a check.
  • We separate responsibilities.
  • The person who writes the check is someone other than the person who approves the expenditure.
  • The person responsible for recording transactions and balancing and reconciling accounts is someone other than the person who approves the expenditure or the one who writes the checks.
  • We don’t co-mingle funds, such as operating accounts and reserves.

We take additional safeguards such as:

  • We only accept checks made payable to the association. We never accept a check made out to a board member.
  • We deposit incoming checks daily, and we have a lockbox account at the bank for collecting assessments.
  • We require two signatures on check deposits, particularly for large amounts. We never use a stamp as a signature on a check.
  • We keep blank checks securely locked up at all times. All association checks are numbered and each outgoing check is listed on the check register. If a check is missing, we report it to the bank immediately.
  • Check deposits and payments are reconciled with bank statements frequently.
  • The bank is notified immediately when authorization for writing checks changes, i.e., when a board member term expires or a new association employee is hired.
  • We make sure the association has adequate insurance coverage for embezzlement or fraud.
  • When a new staff member is hired or someone new in the association is authorized to handle finances, we check each person’s background and credentials thoroughly.

Association board - ThumbnailOne of the most challenging tasks for any association board is the financial piece. We’re here to bring you peace of mind, extra security, and stricter financial controls. As an HOA board or a condo board, you’ve got enough to juggle. Contact us at HomeRiver Group for experienced, reputable services, and let us help you create the association your homeowners expect.