It's perfectly fine to ask your HOA management company to handle your association's finances. But you must still oversee that process.

"It's good to rely on your manager, who has the experience and should be able to give you guidance on budgeting and finances," says James R. McCormick Jr., a partner at Peters & Freedman LLP in Encinitas, Calif., who represents associations. "But not asking questions and overseeing your manager results in what we've seen—managers who've bled their associations blind."

Here are five questions you should ask your management company today.

1. What level of detail are we receiving on delinquencies?
"I'd want to see a delinquency list, and if we've given our manager authority to pursue collections, I'd want to know the status of those collection activities," says Lisa A. Magill, a shareholder and association attorney at Becker & Poliakoff PA in Fort Lauderdale, Fla. "How many letters have been sent? Has the matter been sent to the attorney? Has a lien been filed?"

2. Are we receiving original copies of invoices and checks?
"Your board should have financial reports prepared every single month, and those should have the actual backup attached to them," says Magill. "There should be a check with an invoice attached so you can see what bills have been paid and the payee on each one."

"We recommend at least one board member—and we think it should be the entire board—do a review of the invoices and checks," agrees Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm PC in Phoenix, which represents associations. "You might allow your manager to issue checks up to a certain amount, say $500. But at least on a monthly basis, review the checks and your account statements to provide a check and balance on the financial distributions that have taken place."

3. Do we have petty cash or debit or credit cards in the association's name?
"Some associations have a petty cash or a debit card," says Rosenbeck. "Those should be restricted to only certain individuals, like a manager or board member. I'd also require that there be a receipt to back up payments and that those be reviewed regularly."

Magill agrees. "If you have a credit or gas card, I'd like to see not just the bill but the underlying invoice and receipt showing what charges are for. If you've paid for three lawnmowers and there are no lawnmowers on site, that's a problem."

4. Is there a discretionary fund in our budget?
If so, are we receiving invoices and notice of all expenses paid out of that fund every month?

5. What's the maximum you can spend without our approval?
Also, are you submitting invoices and checks for those amounts to us every month?

"The bottom line is to be diligent," says McCormick. "You're the fiduciary for the owners, and it's your responsibility. Use your experts as a tool but not as a crutch. Use them to get the information you need to run your association well, but keep them honest."