Community Association Managers wear many hats, often carrying all the day to day responsibilities of the association. Most board members, however, all agree that the most important aspect of the job is strong financial management. Since most CAMs aren’t actually trained in financial management, here are a few items that are most critical in protecting the association’s assets.
- Reconcile all bank accounts every month, as soon as the statement is received. Look for questionable items like old outstanding deposits (only a deposit from the last day of the month should be outstanding) or uncleared checks over 90 days old - do they need to be voided?
- Review all checks written to ensure their validity and that they have not been altered. Amounts and payees must match your records. Any issues generally need to be reported to the bank within 30 days, so this must be done on a timely basis.
- Ensure all checks have two signatures. This ensures two more sets of eyes reviewing all outgoing payments.
- Keep signature cards up to date with the bank. I recommend 4 officers be signers, so there are backup persons to cover vacations or snowbirds.
- Separate accounts for reserves and operating. Although not actually required by law, I also recommend separating special assessment funds to ensure you maintain the proper accounting required.
Although many associations like to use large national banks, I actually recommend smaller regional banks, that specialize in association banking. This type of bank often offers more services, specifically designed for associations, at little to no cost. They also tend to offer more personalized service, so that if you have questions, you actually have someone willing to listen and help.