An HOA can be a very helpful organization. Members can help keep their subdivisions, communities and condo complexes safe, clean and a pleasant place to live for everyone. Naturally, an HOA needs money to operate and that is where HOA fees come into play. A well-run HOA provides services that are worth the monthly payment. A high level of trust is attached to the person or persons who administer the organization. Fraud is always a possibility. Taking steps to prevent it is essential.
Preventing HOA Fraud
Sadly, HOA fraud is real and can happen in any organization. HOAs are generally run by volunteers who are not fully vetted. Those who choose to steal usually take small amounts of money at a time so as to make their fraud harder to detect. They may also alter financial records and even have a fake set of books.
For this reason, it’s a good idea to have an outside manager or CPA regularly go over all financial records and make sure they are in order. Any expenditures should require the signatures of two people who are not connected to each other. Giving all the power over HOA funds to just one person is just asking for trouble.
An HOA can do good things for the people and property it runs. But it’s important to be careful when trusting large sums of money to a manager. Take the necessary steps to prevent fraud and keep the HOA honest.