Slide 1


Slide 2

Links
 Police: Couple stole from homeowner group :: WRAL.com
 NSPOA.ORG - Home Page for the North Shore Property Owners Association
 Man invents killer to avoid food fraud rap - Crime/Safety NewsObserver.com
•http://www.ncrec.state.nc.us/bulletin/Jan2010Vol40-3/DisciplinaryActions.htm
 Buck Island
 Woman arrested in condo embezzlement case - WWSB ABC 7 Florida Sarasota, Bradenton, Venice, North Port, Siesta Key Breaking News, Weather,
Sports and Traffic on the Suncoast |
• http://www.starnewsonline.com/article/20100710/ARTICLES/100719995


Slide 3

Links
 http://www.fraud-examiners.org/fraud_manual.pdf
 Check Fraud Statistics
 http://www.acfe.com/documents/Fraud_Prev_Checkup_IA.pdf
 Check Fraud-Who is Liable for Lost Funds
 http://www.acfe.com/documents/tone-at-the-top-research.pdf
 Internal Controls and Fraudproofing
 untitled - Powered by Google Docs


Slide 4

Links
 http://www.sansiveri.com/pdf/SKM_Fall_2008.pdf - Powered by Google
Docs
 It's All About Money: Embezzlement: What? Who? Why? How?
Detection!! Prevention!!
 Employee Fraud Embezzlement Prevention
 How to Prevent Fraud and Embezzlement | Manage > Finances from
D&B Small Business Portal


Slide 5

Segregation of Duties for Internal
Financial Control
1. Lisa orders dues payment coupon books and
sets up homeowners drafts
2. Bill handles collections
3. Manager approves invoices for payment
4. Luci enters invoices and cuts checks
5. John Stone or board treasure verifies
documentation and signs checks
6. Shelley takes cash and check deposits to bank


Slide 6

Segregation of Duties for Internal
Financial Control
7. Bobbie Sue downloads deposits from lockbox
and handles EFT.
8. Bobbie Sue generates financial reports
9. Front desk opens mail
10. Charlotte makes manual bank deposits
11. Lou reconciles bank statements
12. Board reviews financial reports
Annual audit conducted by an outside CPA
firm


Slide 7

Strategies for Preventing
Embezzlement
1.

2.
3.
4.

Require fidelity bond certificate of insurance
directly from insurance agent.
Have bond
evaluated by your agent or attorney
Evaluate internal controls from management
Board should select Auditor and receive audit
directly from Auditor
If management company does not have
segregation of duties as part of internal financial
control or if association is self managed a
second party should reconcile bank statements


Slide 8

Strategies for Preventing
Embezzlement
5. Require bank statements to be reconciled
monthly. Understand that the second signature
on a check is an internal control and offers no
protection with the bank.
6. Have an annual audit not a review or compilation
7. Have everyone on the signature card bonded.
Board members as well as management
company


Slide 9

Biometric Fingerprint Scanner:
Located at Each Employee
Computer


Slide 10

Security Camera Over Front Desk


Slide 11

Alarm System Panel with
Individual Employee Logins


Slide 12

Locked Server and IT Room
Monitored by Security
System


Slide 13

Data Rack: Encases
Protected Servers


Slide 14

Security Cameras: Record
for 6 Month Period