How to prevent HOA embezzlement
How HOA money goes missing and the simple controls that stop it: two approvals, bank statements the whole board sees, and fidelity insurance.
Updated November 1, 20266 min readLeer en español
Most HOA theft isn't clever. One trusted volunteer controls the bank, the books and the reports for years, and nobody else looks.
Split the jobs
- The person who pays bills shouldn't be the only one who matches the bank.
- A second board member approves payments over a set amount.
- Changes to where money is paid out need a second person.
Let the board see the bank
Give at least one other board member view-only access to every bank account. Have someone other than the treasurer read the actual bank statement every month, not a summary.
Insure against it
Fidelity (crime) insurance pays back money a volunteer or manager steals. Cover at least your total bank balances plus a few months of dues.
Watch for warning signs
- Reports that are late or only summaries.
- One person who won't share access.
- New vendors nobody has heard of.
- Reserve money moving to operating.
Tip: Take our free ten-question risk check to see your gaps.