As you well know, appearance is often interpreted as fact.
Many times I have seen condominium boards give the bookkeeping for the association to a relative (spouse or child) or to another related party (e.g. roommate or significant other). Many times the intention behind this is good. The bookkeeper is professional, or at least thinks they know enough to handle it, and he/she either isn’t charging the association at all (usually in the case of a spouse) or is charging at a supposedly reduced rate. All’s good, right? Probably not in the eyes of the unit owners.
This is a very dangerous situation, from multiple standpoints. First, even if everything is on the up and up, it looks terrible to the unit owners. The image is of collusion: that the board member and bookkeeper are working together to either steal or otherwise hide something. This can lead to a steadily deteriorating atmosphere of distrust. Secondly, it often does lead to theft of one type or another. I’ve seen board members pay their personal FPL bill from the association’s account. After all, he’s the president – isn’t he doing all the work and deserves something? Small amounts maybe, but still theft, but easy to hide if the bookkeeper is a related party. And of course, small amounts often lead to the embezzlement of large amounts.
For the other members of the board: it can make them look like they are avoiding their fiscal responsibilities by allowing this to happen. They look bad because they are painted with the same brush, and are therefore part of the untrustworthy.
The best way to avoid this is keep your bookkeeping in the hands of a truly independent third party. That may be a solo bookkeeper who works out of his or her own home, a bookkeeping firm, or a CPA firm. Whichever way you go, you do want to ensure that you are selecting a person or firm that not only knows proper bookkeeping, but also knows and understands Florida statutes and the administrative code relating to your property type.
-Karen Danzinger, CPA, LCAM
Orchid Management Solutions
