Preventing Fraud within Your Community

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This past May, a woman in Panama City Beach was arrested for allegedly stealing $230,000 from several condominium associations. It’s the scary truth, that community associations are often victims of theft, fraud, and embezzlement.

Nearly 28 percent of companies with fewer than 100 employees are victims of fraud. Unfortunately, these small businesses average a loss of $154,000.

So the question many communities start asking is, “How can we protect our community from fraud?/em>

According to HOA Resources there are a number of steps you can take when working to secure your community;

1. Know the association’s Federal Tax Identification Number.

2. Use a lock box system for deposits.

3. Safeguard your association’s reserves.

4. Require duplicate operating and reserve accounts statements be sent every month.

5. Check invoices against checks paid and the original receipts for credit card accounts.

6. Shop around for bank services.

7. Insure the association’s money.

8. Make sure the management agreements includes specific terms to require these safeguards.

9. Regularly have an independent certified public accountant conduct an audit.

VonLehman CPA & Advisory Firm has noted that, “small business owners who are diligent can protect themselves from becoming the victims of theft It’s important for communities to consult and seek expert advice, especially when trying to establish new procedures to keep their communities safe. No one wants to be the victim of this type of illegal activity, be proactive, and take the necessary steps today!

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