Topic: Association Management Company
Questions ANSWERED
Does your management company have financially sound policies and procedures?
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Most board members volunteer for service to their community because they want to make a personal contribution of time to enhance the community in some fashion. Each individual serving on the board of directors brings a unique skill set to the table which can be blended with other talents to create a unique and productive group. This group may (or may not) have an individual that feels comfortable with reviewing financial controls or reading/interpreting financial statements.
As a Certified Public Accountant (CPA) in our service states, I have built our management platform to bring strength and integrity to the financial process. The HOA funds should be handled with transparency. The board should be fully aware of the financial condition of the association at all times. The management company should seek explicit approval for any non routine bill prior to payment. If not, the boards job may become more involved in recovering funds that should not have been disbursed.
It is important that your service provider is able to take the time to answer and explain in terms that make sense to all board members, the financial health of the HOA. Collected assessments are the lifeblood of an association and if managed wisely can provide the best part of a board members job, how to spend the money to enhance the community and add to the value of all owners homes.
A frank discussion is encouraged between the board members and a prospective management company to ensure your associations money is handled properly.
Answered by: Kevin Herman CPA, Owner of Herman Management
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(Courtesy of Neighborhoodlink.com)