Posts Tagged ‘financial controls’

HOA-ly moly! Looks like it’s embezzlement week for homeowners associations. HOAs in metro Denver and the Outer Banks of North Carolina lost a total of more than $1.5 million to a couple of crooks. In North Carolina, an HOA’s property manager embezzled $860,000 in dues from the HOA to pay for personal expenses. The woman issued checks to herself and other businesses, used the HOA’s credit card, and withdrew money from the HOA’s bank account, apparently over a period of about five years, WRAL-5, the CBS-affiliated television station in the Raleigh area, reported on Wednesday.

In Denver, an employee of a property management company stole a total of $700,000 from several homeowners associations, and was sentenced to 10 years in prison yesterday. In November, an employee at a different property management company was arrested in a seperate case of alleged embezzlement.

That’s scary stuff for homeowners who are asked to fork over hundreds of dollars a month, sometimes backed up with the threat of foreclosure. They expect the money to fund algae-free pools and landscaping for their streets and entrances, not a gambling spree at the local casino.

“That is very disconcerting,” Rita Guthrie of the Rocky Mountain chapter of the Community Associations Institute told 7NEWS in Denver. “It is of great concern, I think, to anyone in (the property-management) industry.”

F3 Technologies developed its community-management system, Interaction Community Systems, with extensive input from our in-house accounting expert, Stephanie Miller, who teaches accounting systems at the graduate and undergraduate levels. Interaction enhances the internal controls around cash receipts and cash disbursements for HOAs, as well as reporting.  Interaction has an electronic payments feature that reduces the number of checks received and handled by people, thus eliminating opportunities for embezzlement.  And Interaction makes communities’ finances more transparent by allowing members easier and more immediate access to reports than they get with other management platforms.

And not just that — Interaction doubles as a social-networking site for residents and community members. They can post pictures from the cul-de-sac kickball game on a “wall” where it’s visible only to their neighbors. They can put out an alert about a stray dog. They can even post links to articles about theft and embezzlement in someone else’s HOA.

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