"The same person shouldn't decide which invoices get paid, write

the checks, and reconcile the bank account," says Robert Galvin,

a partner at Davis, Malm & D'Agostine PC in Boston who

specializes in representing condos and co-ops. "It's very

important that those duties be split up. In addition, there are

various ways people steal, but one of the most popular ways is

the fictitious payee. A dishonest manager will make out a check

to John's Landscaping Service that looks legitimate. The check

is then sent to a P.O. box actually controlled to the dishonest

manager. So be very careful that you look at each check so that

there's an actual invoice attached to it so you can tell it's

not being sent to a phony payee."

Also store blank and unused checks in a secure location, and

require that at least one person—or two in a more secure

arrangement—signs checks. Employees who sign checks should

always stamp or indicate in another obvious way on an original

invoice that it has been paid. Finally, ask your bank to

deliver duplicate statements to several different employees.

To get five additional ways to prevent embezzlement at your HOA

or condo association, see our new article. Go there now »

Best regards,

Matt Humphrey

President