Any Board should appoint someone to oversee the records of income, expenses and disbursements of the Associatoin, other than the person responsible for actually managing the association’s income, expenses and disbursements. That person does not need to be expressly designated as “Treasurer” (although usually they are), provided they accept the responsibility. It could be the Board President, an “Assistant Treasurer”, or any other independent person.
The Board runs several risks by not having that independent oversight. First, as Treasurer, the President of the management company now has apparent authority (to third parties) to write checks and open accounts in the Corporation’s name. And second, the Board is impliedly surrendering one of its core responsibilities to the same person whom it is supposed to be supervising. That’s simply not prudent. Some oversight is better than none.
Smith, Buss & Jacobs LLP
733 Yonkers Avenue
Yonkers, NY 10704
60 East 42nd Street
New York, NY 10165
I would first consult the association’s bylaws to confirm that the president may serve as an officer (treasurer). It is often the case that officers may be required to be members of the board of directors or members of the community. If the manager is not eligible because of those factors that answers the question.
If the manager is eligible to serve as the treasurer under your bylaws, then there is the issue whether the manager’s judgment will be sufficiently independent to properly serve. The association is counting on a certain objectivity from the treasurer that may be compromised if the manager is overseeing his own financial performance. This poses a conflict of interest that will color the performance of the treasurer’s duties. I recommend that the manager not serve as treasurer.
Zelmanski, Danner & Fioritto, PLLC
Attorneys at Law
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Even if not an actual conflict, it certainly is an appearance of a conflict or impropriety. That person would, in essence, be looking over the shoulder of his/her company as management agent with how it handles financial matters under its care. While the treasurer need not be an owner unless the Governing Documents so require, this arrangement is not recommended.
Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403
An association needs checks and balances when it comes to finances and I feel fairly certain that Generally Accepted Accounting Principles would not support this payment structure because of the lack of checks and balances.
My recommendation would be to contact your association’s fidelity insurance carrier to see if it would support this type of arrangement.
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