Internal Controls to Prevent Thefts from Internal Sources

Business losses due to employee thefts amount to billions of dollars every year. The most important strategy used to minimize such losses is a good system of internal controls. Internal controls do not prevent thefts; however, a good system will detect such threats on a timely basis. Basically, an internal control system separates the various accounting functions among different employees. DMI has identified some common threats to Association assets and the internal controls used to minimize o [...]


Embezzlement of Association Funds – Awareness and Prevention

The potential for theft or unauthorized use of association funds should be one of the highest priorities of every director. Unfortunately issues dealing with governance, budgetary and financial concerns, repairs and maintenance, enforcement of house rules, policies, and other association issues usually take precedence. Most boards assume that the funds handled by the association’s managing agent is safe and secure. Confirmation of this attitude comes from the annual audit that invariably gives [...]


Investment Issues for Homeowner Associations – FDIC Insurance, CDARS, Laddering and Policies

Associations should be well-versed in how to invest excess funds. Homeowner associations include condominiums (Ch. 514B), planned community associations (Ch. 421J) and time-sharing plans (Ch. 514E). The only definitive guide to the investment of excess association funds is found in Ch. 514B-149, Association fiscal matters; handling and disbursement of funds. However, as a matter of policy and prudence all homeowner associations would do well to use the guidelines provided for condominiums. Cur [...]