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February 4, 2008
Watching Your Money (Again)
Last weekend, there were three more reported embezzlements from associations. So the usual questions were asked by people as to how they could better protect their money. I said that there were a number of policies and procedures they could and should take, but I wanted to highlight two:
FIRST - make sure that a copy of the bank statement goes directly from the bank to someone other than the person who keeps the books. ts really hard to steal your money if the crook can't doctor the statements to show that the money is "there". Better yet, through electronic banking, allow multiple people access for reviewing the bank statements, deposits and payments. But, at a minimum, if a manager or management company is writing the checks and handling the banking, then the Treasurer should receive a statement directly from the bank. If the Treasurer is writing the checks, then someone else should be getting the other statement. Don't just rely on the "two signatures" as most banks don't even look at the signatures anymore as they run the checks through scanners.
SECOND - You need either a Fidelity bond or Crime Insurance policy that covers the association for any theft of its money. AND - you need to know what the exclusions are for which they won't pay, or any policies or procedures that you need to institute in order to keep them from denying a claim. Your agent needs to explain this in detail and you need to make sure that any of the possible scenarios, in which money could be diverted or disappear, is covered.
You can find articles on our site covering more items, but I really wanted to stress these two as something that shouldand could be done immediately!!! DO IT!
Posted by joewest at February 4, 2008 10:05 PM
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