Safeguards in Place at Imagineers to Ensure Your Association Funds are Properly Protected
We recognize our fiduciary responsibility to your community and want to openly share with you the steps we employ to ensure that your association funds are properly safeguarded. We maintain a Control Program that requires a periodic risk assessment to create an environment of discovery, correction and prevention of security problems. This has allowed us to continue to enhance our safeguard procedures.
An important aspect of Imagineers efforts to ensure that effective checks and balances are in place is our commitment to work in partnership with our client boards in a transparent way. Our client boards have the tools and options available at any time to come in and review whatever records they wish whenever they wish. We provide our client boards with thorough monthly financial statements that they can scrutinize. These statements include all banking activity in detail. This element of surprise inspection and board involvement is a very strong tool that is also at the disposal of your association to help in safeguarding your assets. In addition, the important safeguards we have in place to ensure your association funds are properly protected are as follows:
1. Association Funds Are Kept in a Separate Account Under the Association Name and federal TIN - All of your association funds are maintained under only your association name and federal tax identification number (TIN) and kept in separate accounts. Board members are welcome at any time to verify all bank accounts, account numbers and account transactions. By maintaining funds in a separate account under the association TIN and name, it ensures that your association funds cannot be comingled with funds from any other source such as another condominium. In addition, Imagineers require that a minimum of two board members be signatories on all accounts so our client boards have direct access to their funds independent of Imagineers.
2. Segregated Duties within Accounting Department - Monthly Bank Reconciliation is Completed By Someone Separate than an Authorized Check-Signer on the Account or Someone Issuing Checks - By company policy it is mandatory that the staff person who reconciles the monthly bank statement is someone other than an authorized signer of the checks or person responsible for issuing checks. This ensures an important check and balance in that a different staff person reviews the monthly bank statement activity to ensure reconciliation of account funds and to ensure that there is no irregular activity. In addition, we regularly rotate bank duties among employees to prevent collusion.
3. Delivery/Accessibility to Association Operating Account Bank Statements - Bank statements are available to board members at any time. To elevate our commitment to our client communities we have taken steps to ensure board designee(s) are granted online access to review the association accounts directly.
4. Dual Signatures on Checks or Designated Planned Payment Approval - All withdrawal of funds from the operating accounts requires dual signature approval and/or a monthly report showing all check numbers, payees and amounts. Board members are welcome to verify as proof the electronic images provided by the Bank of monthly statements, returned and canceled checks. Signature cards are reviewed and updated annually and as needed. Imagineers also requires that all vendors seeking payment must provide a completed W-9 with Tax Name and Federal TIN before payment can be issued. This information is reported to the IRS as part of the form-1099 reporting requirements.
5. Reserve Funds Segregated and Safeguarded - Reserve funds are also maintained under only your association name and federal tax identification number (TIN) and kept in separate accounts. Board members are welcome at any time to verify all bank accounts, account numbers and account transactions. Imagineers accounting staff are not allowed to transfer or withdraw reserve funds without first receiving a written authorization by the client board to take such action. All written authorization to transfer or withdraw reserve funds is maintained for a proper audit trail. In addition, the execution of all transfers or withdrawals require dual authorization from Imagineers staff.
6. Lockbox and Direct Debit (ACH) Controls - Imagineers provides lock box and direct debit of common fees through the federal reserves automated clearing house (or ACH) for each of our clients. A lock box system allows homeowners to mail payments directly to the association's bank account. Since these funds are handled by the bank using computer encoded scan lines which appear on the coupons, it reduces the chances that the association's money will be deposited to the wrong account and it provides a secure method of receiving payments. Similar to lockbox transactions the direct debit (ACH) is done electronically through the secure network of the bank and Imagineers. There are dual internal controls over the direct debit (ACH) function. First of all, the transactions to debit the funds are set up by staff members who are not signers on the bank account. The monthly transaction file that is created to draw the fund is also done by a staff member that is not a signer on the account. After the file is executed the funds are deposited directly to the association's account by the bank.
7. Employee Code of Conduct and Background Check - All new employees are subject to an approval of a background check before they are hired. All Imagineers employees must sign and adhere to the Imagineers Code of Conduct Administrative Policy. This policy has been an important part of our company since our existence and was created to clearly outline to employees our expectation for conducting business in accordance with core values and ethical standards, and the consequences for any deviation from these standards. To acknowledge our role in handling client funds, Imagineers also carries insurance coverage amounts that are higher than industry standards and will furnish evidence of coverage upon request.
8. Staff and Organization Protection - Imagineers maintains procedures to ensure appropriate password security disciplines for both employee workstations and accounting software access. Authorization is limited to only employees that need it. All computer users are prohibited from installing copied software programs onto the system and opening up unsolicted e-mail attachments to guard against computer viruses. Computer users are notified of ongoing policies against sharing passwords and expectations regarding logging-off when away from their computer. Passwords are changed on a frequent basis for all computer users. Imagineers has an extensive back-up and disaster recovery plan that includes a data breach response plan. In addition, we routinely conduct risk assessments and evaluations of controls to ensure appropriate and adequate safeguards continue to be in place.
9. Audit Frequency and Regularity - Imagineers has been managing homeowner associations for over 30 years. We are the largest provider of professional property management services for common interest communities in Connecticut. Unique in our field, we have subjected ourselves to an annual audit since our company's inception. The annual audit we contract for is conducted according to generally accepted auditing standards, which includes an evaluation of our internal controls including how we handle and safeguard client funds. In addition, our systems have been routinely looked at annually by industry experts from CPA firms conducting audits of client funds that we have been entrusted to handle on behalf of the association. When your association is audited - a service we always recommend - the auditor of your specific association must look at the internal control environment to establish how strong a system it is. We have never had a comment as the result of an audit that our systems are not effective. Being subject to this continuous audit environment has afforded us with the opportunity to continue to seek ways to strengthen our accounting controls and checks and balances over the client association funds for which we are responsible.
Thank you for reading the Imagineers Board Newsletter. If you have any question or need any additional information on any articles provided in this newsletter, please contact us at 1-800-560-7268.Imagineers LLC