You require an audit.
In Washington, state law requires condominium association financial statements be audited and this requirement can be found in RCW 64.34.372. But before the audit, you want to make sure that your accounting is accurate and that there are no surprises.
C.O.R.E. focuses on your internal system to help you ensure that your accounting is accurate, that your records are available and that vital steps to safeguard your assets are taken.
Your internal controls are designed around ensuring critical controls are in place and being followed. If management is required to get board approval for transactions over a certain dollar amount, the internal control system should identify compliance with that requirement.
The internal control system ensures that management's processes address your needs and that management follows your policies. C.O.R.E. evaluates this system and identifies where it may break down and steps that you can take to ensure reasonable and effective control over association money.
Would you like to learn more about how C.O.R.E.'s audit approach can help you ensure compliance? Click the link below to request a proposal.
One of the most important areas where work should be segregated is between accounting management and operation management. For associations, this generally means that your community management company has different people performing these functions, who can then act as a check and balance.
Your assigned community manager is likely going to be the one who is authorized to spend money to support your community. She will have the power to engage a contractor and approve the invoice.
This can potentially turn disastrous to your association if the community management can also enter the invoice into the accounting system, print the check and then sign. This approach puts too much power into one person's hands without anyone in a position to verify the money should have been spent.
Ensure your community management company has solid segregation of duties between operating and accounting management and they have a system to explain how that system works to safeguard your money.
Are you ready to learn more about how C.O.R.E.'s audit approach focuses on those critical areas of internal control and how this focus helps protect your association? Click below to request your free proposal or to find out more.
There are times when a traditional financial statement audit won't provide the information the board needs. When you have identified a significant breakdown in the process of protecting your association's money, you need to know the extent and the amount of loss as quickly as possible. In these moments, your C.O.R.E. team works with the board, the manager and other stakeholders to verify the integrity of the process and recommend changes to enhance the security of Association assets.
During a forensic audit, our team reviews transactions to discover what caused non-compliance with Association requirements and policies. The focus is on evaluating the breadth of non-compliance and quantifying its impact. While no one ever wants to face the problems that management's non-compliance with appropriate controls can cause, knowing the extent of the damage is extremely important to recovering from the offending parties.
If you feel that you need additional insight into transactions or are concerned that management might be doing something it shouldn't, feel free to click the link below to contact us and learn more about how a forensic examination might help you.