Almost daily you hear stories about associations where money is missing. These association's almost universally accepted a broken internal control process.
Have you demanded accountability from everyone involved? Do you require management to focus on the business-side of the association: the accounting and finance where the impact of fraud and errors is ultimately felt? A well-designed system can help you identify where risk of fraud is likely and can help make things go smoothly while protecting your association's money.
Have you set a policy which requires that management solicit three bids for work? Is it being followed? Do you require your financial statements to be prepared on an accrual basis? Is management working hard to ensure that all liabilities are recorded? While we all know that financial statements must be accurate and make sense, who reviews and approves the financial statements? Setting policies and ensuring they work is an important step in your oversight of management and operations.
The budget is the most effective control tool available to your board, but it must be well-designed to use it to protect your assets. Even then, you must be ready to hold management accountable to that budget. Management should never decide to violate the budget without prior approval from the board.
C.O.R.E. believes in using the budget to keep your association business operation under control.
We offer virtual and group seminars where directors can learn more about the association audit process and about directing an association. Sign up to hear from us about specials, sales, and events.
Send us an email to receive your free, no obligation e-guide on implementing ASC 606 in your Association. Our e-guide offers practical advice on what to look for and how to use it to successfully manage your accounting to the new standard.
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