"Any form of concealment begs suspicion."

Be vigilant about your HOA’s accounting practices.  Be informed and demand transparency. 


Referencing the Uniform Planned Community Act:  under Section 5316(a) the Association must make its financial records available for each Unit Owner or their authorized agents to review. If the Association does not comply with these provisions of the UPCA, then you can file a complaint with the PA Bureau of Consumer Protection.

Monitoring your HOA's Financials

Do not accept a "review" of the books and records by the management company.


Property managers are not "experts" especially in financial matters. 

What professional certifications and licensing does the community manager possess that qualifies them to manage our community and finances?

If your financial statements are "Un-Audited"...


...realize that the statements are not worth the paper they are written on, and unless a formal "audit" occurs, your HOA could be in desperate trouble and you would never know. 

UPDATE  7/20/2018:  The Board has finally decided to have an audit of 2017 financial statements.

Monitor closely if your HOA is squandering money on legal or professional fees.


Including unnecessary "updating" of governing documents - and/or spending money on litigation without providing written notice to the HOA members.

Monitor closely if your HOA is borrowing money from reserves to pay operating expenses...

...and whether any such borrowing is done properly and lawfully by providing written notice to owners of any such borrowing and of plans to repay the money within the statutory time period.

Monitor if your HOA board transfers...

 all budgeted reserve funds to reserve accounts during the fiscal year.

NEVER - under any circumstances - should the management company ever be permitted to...

...sign checks, or to transfer money into or out of reserve trust funds accounts. This is the cause of much financial loss in HOA's.  

Financial checks and balances can protect associations.


 The board must have full and separate control over the association’s reserve account(s), including the signatory control of bank accounts.




Associations should require two board signatures on all reserve checks, redemptions, or fund transfer requests.  One of these signatures should be from an appropriate board officer (e.g., treasurer).  

For operating cash accounts, associations should consider requiring two signers for all checks above a certain amount.  

Though obtaining a second signature for checks on operating cash can be an inconvenience, associations should weigh the extra control and protection this procedure provides against any delays it may cause.


Associations must insist that the manager and/or employees are sufficiently bonded to cover all association funds reasonably at risk.  

Associations should require 60 days notice prior to cancellations or nonrenewals of the management agent’s or the association’s bonds.


The management company contract should specify that kickbacks  are not allowed.  

Associations should establish in writing that any benefits, credits, discounts, or free services provided by a financial institution, credit card company, membership-only  warehouse (Costco, Sam's Club),  contractor or others must benefit the association, not the management agent.


The board must ensure the safety of its financial systems and implement effective internal controls.   


Protecting the finances of our association takes effort from board members and residents.




Mischaracterized expenses or income can skew your association's entire financial system.

Use the money from reserve fund contributions for common area projects and other large, unavoidable expenses. Don’t take from the operating fund, which is used for regular maintenance, vendor contracts, and similar expenses, unless you need to. If you do, it can unnecessarily enlarge assessments.  

Who has access to the HOA's bank accounts and CD's?

The management company owner and her son. That's right...all of 2017 and most of 2018.

AUGUST 20, 2018, Update:  Once we questioned this situation, one of the signatories on the HOA's bank accounts was changed.  (We still don't know about the CD's.) The management company owner and the Board Treasurer are now the individuals who can sign checks and access HOA bank account(s).

Posted:  August 6, 2018

It's simply not prudent to allow the management company full control of the Association's funds.    

The HOA has two bank accounts with a local bank; one is designated Operating Fund, the other is Reserves Fund.   The HOA also has two Certificates of Deposit with a local bank (totaling over $50,000) and the only signatories who had access in 2017 were the management company president and her son!


BEST PRACTICE:  Reserve accounts should be in the association's name only. Only board members should be authorized to sign checks or transfer funds from those accounts.The board must have full and separate control over the association’s reserve account(s), including the signatory control of bank accounts.  All transactions made by board designees should be reported and verified in writing.  These transactions should be approved by the board, and approval should be documented in the board’s meeting minutes.  The reserve cash funds should be administered differently than the operating cash account.

[More detailed information will be provided on the secured "SR Residents Only" page on this website. Click on the menu item above and you will be asked to provide your email address for access.  If your email is on our approved list a link will be sent to you via your email.  Or you can contact us to request access.]


Delay in oversight of management co. accounting processes


UPDATE:  5/6/2019, Finance Committee has adopted another of our ideas regarding bank reconciliations (well, better late than never).  

"Finance Committee Notes 4/26/2019:  "Committee member obtaining copies of recent HOA bank reconciliations from CCM to review and verify and will review them quarterly in the future."   (See note above dated 5/6/2019).

Yep, for the last two and half years the Board has allowed the management company to reconcile our bank statements (not a good practice).

Over a year (2017-2018) of HOA financial statements and accounting procedures were not being thoroughly reviewed, the Finance, Budget & Insurance Committee ("Committee") had no access to the HOA's online bank account, and they were not reconciling our monthly bank statements.

  • The Committee waited until April, 2018 to start reconciling the HOA's bank statements?
  • The Committee didn't ask for access to the HOA online banking until April, 2018?
  • The Committee didn't discuss the management company's accounting and reporting procedures until January, 2018?
  • The Committee didn't know what accounting process the management company was using until December, 2017?

Source: April 18, 2018 - Finance, Budget & Insurance Committee Notes

  • "Pursue getting access to the HOA online bank account in order to facilitate downloading month end bank statements."
  • "Reconcile the bank statement monthly."
  • "Do a quarterly internal review of the HOA financials."

Source: January 2, 2018 - Finance, Budget & Insurance Committee Notes

  • "A follow up meeting with [the management company] will be scheduled to discuss their accounting procedures and reporting format."
  • "A potential change was discussed to improve the ability to report the operating fund results separately from reserve fund activity."    

Source: December 12, 2018 - Finance, Budget & Insurance Committee Notes

  • "Met with [management company] to discuss their accounting policies." 

Source: December 7, 2017 - Finance, Budget & Insurance Committee Notes

  • "Set the next meeting for December 12th. [Management company] will explain the current accounting method..."
  • "Decided to meet in the near future with [management company] to hear what the current accounting method is and what method might best serve us going forward."

Five Reasons Accurate Monthly Statements Are Necessary

5 Reasons Accurate Monthly Statements Are Necessary (pdf)


In the Annual Report, dated April 12, 2018 the Board tells us:  "More detailed financial information is available on the Association website."

Ten (10) days later they tell us the detailed financial information will no longer be available on the Association website and can only be reviewed by traveling to the management company's office.   


Why are the Board and management company making it so difficult for homeowners to review how their money is being spent?


Why is it so important to monitor our financial statements?


May 30, 2018 (PennLive.com) :  A property management company manager is accused of stealing more than $77,000 from a Susquehanna Township homeowners' association.

Court records say that Davis provided fictitious monthly statements for a $35,000 CD he was supposed to have opened for the homeowners' fund in February 2016.

Click on the buttons below to read the entire articles.  http://www.pennlive.com/news/2018/05/property_manager_accused_of_st.html

"Any form of concealment begs suspicion."

Withholding Financial Information from Homeowners

Non-board-member homeowners should ask tough questions. They are entitled to request records and to lobby for a financial audit. 

Transparency should always be of utmost priority for board members, especially in areas related to finance.  Any form of concealment begs suspicion. 

Any board member, officer, or management company that conceals records and financial transactions should be suspect. Best practice would mandate association finances to be transparent to the homeowners at all times. 

The monies belong to the homeowners as a whole.

Be vigilant about your HOA’s accounting practices.  Be informed and demand transparency. 

Source:  https://associationevaluation.com

3/17/2019 - December 2018 Financial Statements Posted


It's MARCH 17, 2019: The December 2018 monthly financial statements are finally available!!

Do not be misled by the latest "Financial Statements Review for the year ended December 31, 2018."

They do not reveal the detailed expenses for December, 2018.

The first 4 months of 2018 financial statements are still missing from the HOA website.


But hey, you don't care where your money is going. Right?

Would a $94,170 financial mistake concern you?


"It's just a simple accounting error." *



"...accounting was done in reverse." "Everyone makes mistakes." *

(Source:  audit correspondence and the HOA Board's "Guest Speaker", September 20, 2018 Board Meeting)

*We're not kidding, this was actually said by an accountant regarding a $94,170 error.

the mystery of the vanishing hoa office

March, 2017: The Board "repurposes" the Massage Room to create an on-site HOA Office in the Clubhouse


"Massage Room:  After consideration of HOA needs, the Board has elected to repurpose the Massage Room in the Clubhouse."   Source:  Board Briefs, March 9, 2017

June, 2019 Residents ask the Board to follow the Bylaws and the Association office mysteriously morphs into a "Mechanical Room."



"2.11 Documents and Records. Copies of the Declaration, Plats and Plans, Bylaws, Rules and Regulations, contracts to which the Association is a party and all books, records and financial statements of the Association, including the minutes of Executive Board and Association meetings, shall be available for inspection in the offices of the Association....."

**May we suggest a place in the Clubhouse be designated as a location for future financial document reviews by homeowners.**

June, 2019: How convenient for the Board and management company: No Association office -- no on-site review of HOA financial documents.


1.  May 23, 2019:  The Management Company Search Committee receives a request (from a homeowner) to include Association office, on-site review of HOA documents in the RFP's sent to potential candidate companies.

2.  June 19, 2019 The request mentioned above is referenced at the Board meeting. 

3.  July, 2019 The on-site Association office is now labeled a "Mechanical Room."  

4.  If there is no Association office in the Clubhouse -- homeowners will be required to travel to the management company to review HOA documents.

5.  Why create obstructions and difficulties for homeowners?