There have been a number of well publicized cases of financial malfeasance in the community association industry over the last year or so, some by managers and others by board members. So what can an association do to protect themselves from this kind of risk?
Attorney Kelly Richardson recently wrote an article for the Orange County (CA) Register outlining ten tips that associations can implement to increase the procedural and system controls over their funds, ensure appropriate spans of control, and reduce the risk of loss. Among his recommendations are:
~ Review financial records regularly
~ Don't concentrate responsibility in a single set of hands, whether that is a board member or manager. Require multiple signatures for checks and other material transactions.
~ Manage the overall risk through timely audits and reviews, as well as appropriate insurance coverage.
~ And always remember that as a board member you can delegate responsibility for some activities, but you cannot delegate ultimate accountability for performance.
I encourage you to take a look at Kelly's article.
