[arnie920]

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Is it normal for an HOA board to authorize the management company to withdraw thousands of dollars for “vendor payments”??? Please respond.

[timothadeus]

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It really depends on the HOA. Our board only gives the management company permission to withdraw $500 at a time. That’s the limit. Anything beyond that would need approval from the board. And they’re limited to like one withdrawal a day or something like that.

[arnie920]

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I raised this issue to our board and they said they can’t always stay on top of expenses. That doesn’t make sense to me. Isn’t it their job to do that?? Sounds like fraud waiting to happen imo.

[timothadeus]

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While I understand your concerns, it’s completely normal for the board to delegate this type of thing to a professional. Vendor payments can be very exhausting to keep up with, especially if your board consists of full-time employees. Missing a payment might cut off your services, and that’s no good for your HOA.

[arnie920]

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Yes but I’m saying it’s the kind of practice that might be abused. Is that not something your worried about??

[timothadeus]

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Most definitely. But if you have a good and honest manager, it shouldn’t be a problem.

[hamstercarrot]

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@arnie920 I totally get where you’re coming from. That was also something we considered. In our case, we give the management company authority to write checks up to a thousand dollars – that’s it. For larger payments, they will have to get the board’s green light. If you’re worried about abuse or fraud, put a cap on it.

Additionally, HOAs usually have internal controls set up for this type of thing. Your board should review the financial statements and reconcile bank accounts every month, at the very least. This is how you can make sure everything’s in good order. Checks and balances and all that.

[arnie920]

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Thank you! I appreciate the advise.

[samui]

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