SFPMA’s Condo & HOA Bank Statements
Condo & HOA Bank Statements
HOA bank statements are just as they sound: a statement from the bank showing all deposits and withdraws from each association account over a certain period of time. The most effective way to prevent fraud within your community association is to keep a close eye on bank statements. Most associations have at least two accounts: an operating account for regular costs of running a community association and a reserve account for setting aside funds for future projects.
Reviewing bank statements on a regular basis is important because it is one of the few financial documents that is not prepared by the association board of directors or HOA management company. Comparing bank statements with association financial statements is a good way for other HOA members to check the accuracy of financial statements prepared by the manager and/or treasurer.
What is Included in an Condo &HOA Bank Statement
A proper bank statement should include a timeline of all deposits and withdraws into and out of association accounts. Each account should have its own statement. It is important to carefully review every transaction to prevent potential fraud. One of the most common ways fraud is committed is by “borrowing” money from a long-term reserve fund and returning the money after a time; essentially taking out a loan using association funds. This is common because of how hard it is to track. If all funds are accounted for in the long run, nobody would know unless they inspect each individual transaction.
Who Should Review Bank Statements
Only a few people have access to association funds. Usually, it is just the president, treasurer, and/or your property management company if you choose to use one. This leaves a lot of power in the hands of a few. If left unchecked, it could be an opportunity for fraud. It is important that all bank statements be sent to someone other than the member(s) who have the ability to write checks. That way, they can act as an impartial inspector to make sure that nothing is missing within the HOA accounts.
How Often Should Bank Statements Be Checked
Bank statements should be included with all other financial statements prepared at the interval as determined by your HOA whether it be monthly, quarterly, or annually. Ideally, bank statements should be checked as frequently as possible. Some banks offer online banking services that allow for 24/7 access to association account statements.
Need More Information
Financial management can be one of the toughest aspects of operating a successful HOA. If you are having trouble with reviewing financial documents such as HOA Bank Statements, contact the professionals at CSM. We have years of experience working with homeowner’s associations from all over the United States. Using state-of-the-art technology, we can provide financial management assistance while still allowing association directors to remain independent.
Tags: Accounting Articles, Condo and HOA, Condo and HOA Budgets, Management News
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