By: Tiffanie Thompson, SentryWest Insurance
Who is handling the funds in your community?
I hear all the time, “We have procedures in place, that would never happen to us”.
While the majority of board members are committed and hardworking volunteers, it only takes one to behave dishonestly.
Fraud can cause serious consequences for an HOA, including financial instability, increased fees for homeowners, deterioration of community amenities, and legal action against those responsible.
The potential for fraud and theft grows when these responsibilities lie with one or two individuals on the HOA board, employees or other volunteers. But, with a few tweaks the HOA boards can quickly fill the cracks.
Here are some recommendations to help the association perfect themselves:
Just like D&O coverage crime and fidelity policies are not created equal. Reviewing the policy language and understanding the different coverages that are not always included such as wire transfer fraud, computer fraud, social engineering, check fraud, and including coverage for volunteer board members and property managers.
If you suspect embezzlement within your HOA, it is important to consult legal counsel and involve law enforcement if necessary to investigate the matter and pursue appropriate actions against the individuals involved.
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