Smart HOA Finance
Verify the Money
Verification means independently confirming important financial information using reliable records. The board doesn't need to recheck everything—just selected balances, transactions, and activities that deserve closer attention.
Key Information to Verify
Bank Accounts and Transfers
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Bank and reserve account balances
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Bank reconciliations
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Transfers between accounts
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Who has access to bank accounts
Payments and Approvals
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Large or unusual payments
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Vendor payment changes
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Supporting invoices and contracts
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Approvals for significant spending
A Verification Example
The financial report shows $425,000 in reserves.
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Reviewing means the board examines the reported balance and considers how it compares with prior months and planned reserve activity.
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Verifying means the board or a designated reviewer compares the reported balance with the bank statement and reconciliation, using records obtained directly from the bank or through secure, view-only access.
Questions to Ask
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Does the reported balance agree with the bank statement?
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Was the payment supported by an invoice or contract?
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Was the transaction properly approved?
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Can the information be confirmed using an independent source?
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Do the supporting records agree with the reported amounts?
Put Verification Into Practice
The free Monthly Financial Review Checklist helps your board verify important financial information, document questions, and follow up on unresolved items as part of its monthly review.
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Next Step: Protect the Money
Verification helps confirm that important financial information is accurate. Financial controls add another layer of protection by establishing rules for accessing, approving, transferring, and documenting association funds.
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