Subscribe for Daily Updates!
Our building was approached by a group of former senior management executives and a CPA who are offering various services such as attend our board meetings and monitor our managing agent's activities. Each month we will receive a report addressing issues discussed at the meeting, they will perform building inspections, and be available for special projects such as monitoring improvement programs, and apartment restorations and renovations. They are not a management company trying to get our business, they say they have been there and done that.
Our building is being managed satifactorily by a mid sized management company that provides us with basic services but charges for many of the "extras". Have any of my fellow board members tried such a service or would consider it?
It's true that management companies do not need to be audited by other than an accountant to go over the income and expense statements. However, accountants are not trained to know if a cooperative is paying too much for supplies and services, what the cost of oil should be, whether staff overtime can be reduced, etc. Perhaps if someone did look into this for a building from time to time there would not have been so many agents found guilty of committing fraud and accepting kick backs. What you are saying is like telling the police to stay home until a crime is reported.
Folks,
Why not implement some simple rules?
1. President does not sign checks,
2. President does not sign contracts
3. Building manager (either self managed as we are, or from a management firm) does not sign checks.
4. Building manager (either self managed as we are, or from a management firm) does not sign contracts.
5. No use of credit card to pay any routine bills whatsoever, except minor purchase, e.g.; less than $200 per month (as some online web sites will only accept cards or other automated payment service).
6. Building manager must sign every invoice that is presented for payment.
7. With six board members, four are authorized to sign checks.
8. All payable and salary checks must be signed by two board members.
9. All payable checks are accompanied by the original invoice.
10. Board members can challenge any check and obtain an explanation.
11. Two accounts payable runs each month. These are for all invoices received by the 25th of the preceding month and the first is generated around the 8th. Why the 8th? Our maintenance and assessment (yes, we have assessments every year and it is collected during ten of twelve months of the year) payments are due by the 10th. In this way our funds with the bank remain relatively constant. The second run is towards the end of the month for any payments, we really need to make.
12. Original checks returned by the banks are reviewed by the treasurer every month.
13. All board members receive a complete check register every month with all payees and amounts.
14. All board members and outside counsel receive a complete listing of arrears, simple and aged every month.
15. All board members receive a use of funds report every month.
16. All board members receive a budget vs. actual comparison by month and year to date every month.
17. All board members receive a trial balance every month.
18. All board members and outside counsel receive a management report prepared by the building manager every Friday listing events (normal and unusual), letters, received, government activities, forecast of capital work and major repairs.
19. All our consumables must be purchased from a round robin of firms so that no one firm has a corner on all our purchases such that there is a lessened inclination for any kickbacks.
20. Our outside engineering firm monitors all major expenditures and certifies all work as complete, or partially complete as scheduled, before we make any payments.
21. Yes, all major capital expenditures are bid to firms identified by our engineering firm.
22. Our engineering firm levels all bids.
23. Our counsel reads and approves all contracts. Then a board member signs the contract.
24. No board member ever goes to lunch or dinner on the co-op. If we go to dinner after a meeting, it is dutch treat.
25. No board member, building manager or superintendent ever takes a free lunch or dinner from a supplier.
26. No board member, building manager or superintendent ever takes a gift from a supplier.
27. No board member ever charges the co-op for personal stationery supplies used, PC software, printer ink, personal auto, telephone calls, etc.
28. No board member ever uses the postage stamp machine in the management office unless the board member reimburses the co-op.
And, unlike some co-op and coops, admittedly a small number, we do not forgive the monthly maintenance for a board member, e.g.: the board member does not receive a free ride.
Yes, these are our rules. There are more, but you get the gist.
And we have an accounting firm that specializes in co-op and condo audits. We had one of the national/international firms until four years ago, when we switched. The national firm, which we employed for a number of years, was a neophyte in co-op audits compared to the firm we now employ.
Your rules sound good and I am glad it works for you. Our building is not self managed and I believe that because our managing agent manages several buildings we have a lot of advantages.
A self managed building puts too much responsibility on the board which is typically comprised of people who do not have any experience in managing real estate. They are volunteers who give up some of their time to review the operations of the building but are not in position to make educated evaluations or have the ability to compare it to other experiences.
One advantage of using a professional managing agent is that they have witnessed just about everything that may happen and with that experience do everything to avoid occurances in other of the managed buildings. The other is their buying power. As you know when you buy in bulk it is always less expensive.
I could go on and on about the pros and cons of using third party management but I don't think this is the venue to do so.
Introduce yourself to other members of Board Talk! Log in below or register here.
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Sounds like they are offering to do what your management company gets paid to do already. If they don't, get rid of them.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.