Recent events involving Premier Property Solutions have highlighted an important lesson for condominium boards: management companies should help manage community funds, but they should never have sole control over them.
Bottom line: your board is ultimately responsible. While management companies handle day-to-day operations, board members have a fiduciary duty to oversee association finances. Accountability cannot be delegated.
Best Practices for Protecting Association Funds
- Ensure the Association Owns Its Bank Accounts: Operating and reserve accounts should belong to the association, and board members should have direct access to statements and online banking.
- Require Multiple Approvals: Large expenditures and electronic transfers should require board approval or dual authorization.
- Maintain Financial Transparency: Board members should regularly review bank statements, balance sheets, and reserve account reports to independently verify balances.
- Separate Reserve Funds: Reserve accounts should remain separate from operating funds and be used only for major repairs and replacements.
- Conduct Regular Financial Reviews: Annual audits or reviews by an independent CPA can identify issues before they become major problems.
Questions Every Board Should Ask
- Who owns our bank accounts?
- Who has access to online banking?
- Can board members independently verify balances?
- Are reserve funds held separately?
- What approvals are required before money leaves the account?
Trust is important, but oversight is essential. Strong financial controls and transparency help protect community assets and maintain homeowner confidence. A management company should be a partner—not the sole gatekeeper of your association's money.
Need Help Strengthening Your Association's Financial Oversight?
Managing community finances doesn't have to be overwhelming. Haus Financial Services specializes in helping self-managed, small condominium associations in Chicago establish sound financial practices, improve transparency, and create long-term financial stability.
Whether your board needs assistance with budgeting, reserve planning, financial reporting, or guidance on best practices, Haus Financial Services can provide the expertise and support your community needs.
