Tips from the experts: The more eyes, the better

In the last decade, three companies have been accused of stealing money from condominium and homeowners associations on Hilton Head Island. Most experts say the problem boils down to a lack of oversight.

Here's what you can do to keep a watchful eye and prevent fraud from happening at your condo.

Require two signatures:

Require all checks and withdrawals to have two board members' signatures. If you use online banking, your process should require two board members to monitor and send payments. A property manager should never sign checks for substantial amounts of money.

Get multiple bank statements:

Make sure your bank provides duplicate statements directly to someone other than the person handling your books. This prevents property managers from modifying statements to hide wrongful activity.

Request annual audits:

Audits have a watchdog effect. Though they are based on a sampling of financial activity, and can sometimes miss inconsistencies, an independent audit will often detect or deter mishandling of funds.

Keep credit card limits low:

If you have an association credit card, keep the limit low. Always check receipts against the statement and scrutinize receipts submitted for reimbursement to see if any personal or odd items are included in the request.

Ask around:

With little information available and not much regulatory oversight, it is difficult to judge the reputation of property management companies. Don't be afraid to ask around. Attorneys, accountants and other regime leaders can provide helpful insight about a company you're considering.

Sources: Greg Bennett, CPA on Hilton Head Island; CondoCPA Inc.; "The Cooperator: The Co-op and Condo Monthly"

This story was originally published March 27, 2015 at 4:00 PM with the headline "Tips from the experts: The more eyes, the better."