HOAleader.com - Tip of the Week - February 28, 2014
Published: Fri, 02/28/14
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It's Review Time: Do You Know Where Your HOA Money Is?
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In this week's tip, we brush you up on ways to ensure you're not
the latest victim in a news story like this one, in which a
federal judge just sentenced yet another HOA manager for
embezzlement, this time for nearly $1 million from his company,
which manages associations in northern California.
"The first rule for boards is to really be aware of what's going
on with the finances at your association," explains Erin McManis,
a senior associate at Mulcahy Law Firm PC in Phoenix, who
advises many associations. "Board members have a fiduciary duty,
so they must act diligently, in my opinion. You can't just turn
a blind eye to what's going on."
Here are two ways to stay on top of it:
1. Conduct regular reviews.
"There are some relatively simple measures associations might be
expected to do that might help deter this kind of thing," says
Matthew A. Drewes, a partner at Thomsen & Nybeck PA in
Minneapolis, who represents associations throughout Minnesota.
"In Minnesota, the statutes that govern many associations
provide for at least an annual review of the association's
financial records by an outside party. It doesn't require a
full-blown audit, but it can be one. Having at least that annual
review, even if it's not required, may have been something that
would have turned up the kind of embezzling that was going on
here.
"Members are permitted to vote to skip this review under our
law if they meet a certain percentage in a vote," adds Drewes.
"But even where they're inclined to save the money, this might
be a situation where they're being a little too conservative
with their money. It might be well worth the protection to have
this done and not vote it down every year."
2. Between annual reviews, conduct monthly reviews.
"Monthly financial reports should always be made available for
board review," says McManis. "Those reports should include
revenues, expenditures, and a balance sheet."
Don't assume other board members are keeping track. "A treasurer
may have certain duties, but all board members should have
control and oversight," adds McManis.
That's right, says Brad van Rooyen, a partner at Home Encounter,
a Tampa, Fla., company that manages 15 community associations
totaling about 3,000 owners. "As a management company, we make
sure financials are documented and sent to all board members,
not just the treasurers."
There's much, much more. See our new article, to learn all seven
steps you can take to check on your HOA's financial controls and
prevent embezzlement: http://www.hoaleader.com/members/962.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Complete This 7-Step Checkup on Your HOA's Financial Controls to Prevent
Embezzlement
A federal judge just sentenced yet another HOA manager for embezzlement,
this time for nearly $1 million from his company, which manages
associations in northern California. Consider it a reminder to
double-check your financial controls. Here we offer seven tips to ensure
you're protecting your homeowner association's funds.
Click here to read full article:
http://www.hoaleader.com/members/Complete-This-7-Step-Checkup-on-Your-HOAs-Financial-Controls-to-Prevent-Embezzlement.cfm
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Accommodation Requests Under the Fair Housing Act: Best Practices to Avoid
Discrimination Claims & Lawsuits
Is your HOA or condo board seeing more and more requests for exceptions to
your pet rules? What about requests for specific parking spots or
deviations from your architectural rules? Afraid saying no to any request
will trigger a costly and stressful discrimination complaint against your
HOA? Take charge of the process for handling requests for accommodations!
Join us for an in-depth webinar on March 18 led by two experts in HOAs,
condominiums, and fair housing challenges.
Click here to read full article:
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Collect More, and Collect It More Easily:
Best Practices for Condo/HOA Debt Collection
Tired of seeing delinquent accounts on the financial statements of your
condo or HOA? Frustrated because subpar finances mean long-planned
projects are on hold indefinitely? Less than thrilled about continually
explaining the situation to the homeowners in your association? Stop
letting nonpaying owners control your condo or homeowners association!
Get on-demand access to our in-depth webinar led by two HOA debt-collection
experts. (Recorded on February 6, 2014.)
Click here to read full article:
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HOA Board to Owners: We've Changed Our Minds. Tough Luck!
In this week's tip, we answer a reader's question about whether a board can
just reverse a prior decision. In our reader's situation, the board has
previously paid to replace owners' leaking sliding glass doors. Now the
board is planning to change direction and seek reimbursement from owners.
Click here to read full article:
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When and How Can Your HOA Reverse Course? Discussion Forum Follow Up
An HOAleader.com reader asks, "Presently I'm serving as a vice president on
a HOA board serving 22 units. This board has been in existence for 30 years
with various amendments to specifics of responsibility for repair or
replacement of exterior items only. Most recently, our board president
made a statement relative to the possibility of rescinding a decision made
eight years ago to replace an owner's sliding glass door due to a serious
leaking problem."
Click here to read full article:
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