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Could property manager be bribing condo association treasurer?

Posted on Tue, Dec 07, 2010 @ 01:02 PM
  
  
  
  
  
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Have a very unusual potentially explosive issue. Above and beyond all the water, mold and insurance issues we've raised, three board members quitting this current Condo Board over a two year time period, etc... Came home from a 4 day trip.  Did not cancel the mail. Somehow, the postman mixed up some of the Board Treasurer's mail with ours. In going through my mail there is a letter addressed to her that has her name on it plus it reflects it is a "roth ira (xxx)". The xxx stands for the initials for our property management company which is how we have all addressed the company forever. Of course, it's a guess, but it stuck out like a sore thumb. I showed the envelope to an attorney who lives here and he is very concerned, as I am. Of course the mail was left for this person immediately and nothing was touched. It makes me sick to think that this Treasurer might be being paid by the management company to steer business their way, but based upon how awful things are here - it wouldn't be a surprise at all. And this Board member has been on the Board for years and Treasurer for a long time. All our documents say no one is to be paid, this Board made a huge deal out of how they are "volunteers" at our last Board meeting. Could the Board pass this as a rule and reg on their own? Any ideas how to handle this would be greatly appreciated. This could explain a lot of things and why the Board has intimidated all of us for the last couple years. As I think, this wouldn't be paid out of our monies. I did an audit of the books from 2007 - 2009 and did not see anything l like this, but it could come from the property managers account. Thanks for your ideas on how to proceed. Maryann
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Comments

Intimidation is the first sign of something gone wrong. Remember that when you receive financial statements (i.e., monthly reports) that ANYONE can fudge figures on a computer. You have to request a copy of every bank statement. They are required by law to give you this information. You did not indicate which state you are in, but in the state of FL the Condo Ombudsman can guide you through the process. I believe the time limit for bank statements is 30 days. This is in the event that the statements being requested are older and could be in storage facilities that the bank uses. Dont forget to ask exactly how many bank accounts there are, and in which banks. DO NOT RELY ON WHAT THEY PRINT OFF THE COMPUTER.
Posted @ Tuesday, December 07, 2010 1:37 PM by ArtDicco
Every state has some version of a Condominium Act (Lawe) most usually have a requirement for an independent audit to be consducted every year. If you'll advise what state you are located in I'll check out yourb state law and advise.Monthly finaNcial styatements can be manipulated-independent audits have to be done by CPA. Fudging an audit could cost the CPA his l;icense to practice his profession.
Posted @ Tuesday, December 07, 2010 2:05 PM by Charles Adler
Get a print off of the check register and the reconcilliations the management company should do every month. We prepare them by the 20th of each month and place a copy of it in front of the bank statement in the bank statement binder. The reconcilliations should match the bank statements in beginning and ending balances to the penny. We only use banks which provide at least the copies of all cleared checks with the statements. These go in the bank binder with the appropriate month's statement. Each bank account has it's own binder for the year. Then you can use the check register printed off from the computer to verify against the checks and to match any questionable checks. If your Association has the cancelled checks request those as well and, check the backs to make sure they were cashed or deposited by who they were made out to. I did an examination when i was consulting for an attorney and found one association making out checks to "employees" and found that 3 checks every month were actually deposited into a business account owned by one of the Board members! This was a large association where it would be almost impossible to know each and every employee). Of course if your manager is getting "extra" money from the association by way of it being built into their contract, and then giving a kick back to a board member that would be hard to prove without a subpoena for the manager's bank accounts.
Posted @ Tuesday, December 07, 2010 2:58 PM by Joyce Nord @ bestcondomanager.com
Like your suggestion,Joyce but also would get certified copy of the annuasl audit report.
Posted @ Tuesday, December 07, 2010 3:17 PM by Charles Adler
Charles, 
 
From what I have seen the audit is only based upon the digital financial files provided by the Association. The accountants do not review every bank statement, and only randomly select a few invoices for the Association to provide. In the cover pages of the audit itself, it usually contains a disclaimer from the accounting firm, indicating they prepared their audit based upon the records provided by the Association.
Posted @ Tuesday, December 07, 2010 4:12 PM by Joyce Nord @ bestcondomanager.com
It would be very difficult to do this and bury the trail. Isn't it more likely the Treasurer once worked for the management company? 
Posted @ Thursday, December 09, 2010 4:06 AM by FormerManager
My comments were not to state what is "most likely" it was to explain how to go about proving their suspicions, which is what the original author asked.
Posted @ Thursday, December 09, 2010 11:34 AM by Joyce Nord @ bestcondomanager.com
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