Does Your Association Have Adequate Internal Financial Controls?

By nature, homeowners associations are particularly vulnerable to being financially damaged by errors that are made by the volunteer members and property managers who perform various functions for the association, and by deliberate acts of fraud and embezzlement. To protect against and minimize the risk of suffering financial losses due to fraud and embezzlement, an Association should have adequate HOA internal controls for finances that mandate the manner in which business involving the association's finances is conducted. HOA internal controls that are very easy to implement include: (i) segregations of duties; (ii) controls over the handling of funds (iii) regular director reviews; anind (iv) proper financial statements.