Over the past few weeks, we’ve discussed what ALL board members and officers of community associations in America should read: the 35-point bulletproof list of financial procedures detailed in “Escaping Condo Jail“, and consider it a survival manual. Divided into four segments:
- Inheriting Old Books
- Guarding and Vigilance
- Cyberbanking Procedures
- Efficiency Maximization and Return
Let’s pull it all together, here is the complete 35-point checklist to BULLETPROOF your building association.
- Open new accounts
- Update bank signature cards.
- Obtain a transition statement.
- Destroy all old checks.
- Keep new checks locked.
- Report any theft to police.
- Keep board officers’ deeds and state-issued IDs on file.
- Perform credit and background checks on employees.
- Have monthly bank statements sent to two different people.
- Require fidelity insurance and bond money handlers.
- Require that different people write checks and reconcile books.
- Require board members to review bank statements within 10 days.
- Never allow the management company to access reserve accounts.
- Never rely on computer-generated reports instead of bank statements.
- Require budgets to conform to GAAP.
- Require use of established financial software.
- Require two signatures minimum on each checks, with amounts over $2,500 requiring three signatures.
- Never allow credit or debit cards.
- Require invoices before paying bills.
- Use safety checks with watermarks and warning bands.
- For sizable accounts, use an automated fraud detection tool.
- Perform periodic audits on a schedule.
- Do not let accounts exceed FDIC limits.
- Have a procedures manual for Internet banking protocol.
- Have a dedicated computer for financial transactions.
- Run up-to-date operating systems and antivirus protection.
- Ensure financial websites are secure- look for an s after http.
- Require two separate authorizations to process banking transactions.
- Change passwords on a regularly scheduled basis.
- Always exit the bank’s website completely.
- Consider Positive Pay with a $1,000 limit.
- Check electronic transactions every day.
- Use extreme caution with mobile devices for banking.
Efficiency Maximization and Return
- Collect assessments using ACH payments.
- Invest association monies wisely.
Using this checklist as a guide will ensure your condo association’s health and your own peace of mind! Share your stories with us! Email us @ info@associationevaluation.com or follow us on Facebook!