How to Check Your Financial Accounts For Identity Theft

Most people have a wide variety of financial accounts that they use each and every week. They write checks, use credit cards, ATMs and online banking. Every transaction involves some degree of identity theft risk. The store clerk might spy on your visa information while she processes a purchase. A hacker might monitor your online activity using a Trojan. Or someone might create counterfeit checks that they pass around a town that you have never even been to.

Monitor Financial Information It is important to monitor your financial information on at least a monthly basis. You must report any problems to your financial institution within 60 days. Here are some quick tips about how to monitor your financial information efficiently.

1. First of all, you need to make sure that all of your financial statements have arrived in the mail. It is quite common for identity thieves to steal your bank or credit card statement from the mailbox. For maximum protection, you should look into using a private locked mailbox and use that address to receive your bills.

2. You should mark down on the calendar when your bill is set to arrive. For example, my bills arrive in and around the 15th of each month. If your bill does not arrive, it is important that you contact the financial institution because the statement might have been stolen.

3. If there is a charge that you think is suspicious on one of your financial statements it is important that you report this charge immediately. Usually you have 60 days of coverage. The longer that you wait the more difficult it is to prove your innocence.

4. After you have read your bank or credit card statements you should shred all information. You can purchase a shredder for home office use for less than $100 from Staples.

5. Financial records should be kept in a safe place in the house. Some people keep their financial records in a small household safe. I know of one example where an individual had their tax return on their desk and the cleaning lady saw the Social Security number and passed it along to an identity thief.

Director’s Financial Responsibilities

The new Association director is often thrust into the job with little idea of what his or her duties and responsibilities are, other than the conceptual knowledge that s/he is obligated to serve in the best interest of the Association. Unless s/he has been an active member of CAI (which is not likely if s/he is a first-time director), s/he is not even aware of the educational resources that are available for guidance in learning what a director’s responsibilities are. Further, many directors serve only a one-year term and therefore have little incentive to go through the effort of getting the education necessary for performing their job, since their term will be completed before they can even begin to learn everything they should know.

The purpose of this article is to attempt to provide guidance to the director on his or her financial responsibilities. The most important rule with respect to financial transactions is that they should be well-documented. While the Association may produce monthly financial statements and an annual budget, it is also important to document (preferably in the minutes of the Board of Directors) the following types of financial decisions:

  1. Authorization for new bank accounts
  2. Authorization of changes in signers of bank accounts
  3. Approval of transfers of cash between accounts
  4. Authorization for purchases of major equipment, or major expenditures
  5. Approval of the annual budget
  6. Acceptance of monthly treasurer’s report
  7. Acceptance of monthly interim financial statements from the management company
  8. Approval of the annual audit or review report and tax return
  9. Authorization for an officer of the Association to sign the annual income tax returns
  10. Documentation of board actions and responses with respect to the accountant’s management letter that accompanies the annual audit report
  11. Collection actions (authorization to lien member property, authorization to foreclose on member property)
  12. Documentation of board decisions regarding insurance coverage
  13. Adoption of a conflict of interest policy
  14. Authorization of contract for preparation of a reserve study
  15. Authorization of reserve expenditures
  16. Adoption of reserve policies
  17. Adoption of Revenue Ruling 70-604 Election (This election should be made annually and should preferably be made at the annual membership meeting, then ratified at a Board of Directors meeting.)

Accounting is a complex, technical subject in which very few people have an active interest. However, the impact of financial transactions is something that permeates every aspect of our lives, and certainly that of a community association. While no individual can be given a complete accounting education in a short enough period of time to enable them to gain a complete understanding during their term of office, there are certain things that the director can and should do on a procedural basis that would allow him or her to adequately exercise the oversight of financial responsibilities of the members of the Board of Directors of an Association.

The director needs complete financial information in order to perform an adequate review of transactions. Accordingly, the monthly financial reporting package for a community Association should generally include the following documents:

Monthly financial statements

a. Balance Sheet on an accrual basis

b. Income Statement on an accrual basis with budget-to-actual comparisons ( The income statement should include both current month and year-to-date amounts.<

  • General Ledger
  • Cash Disbursements Journal
  • Aged Assessments Receivable Listing
  • Copies of all bank reconciliations
  • Copies of all bank statements
  • Copies of paid invoices

While the above list may seem like overkill to some, these documents should be distributed to the board members prior to the Board meeting so that they have an adequate opportunity to review them and be ready at the time of the meeting to either approve the reports or ask the necessary questions. It is not reasonable to expect even a CPA to be given a set of financial statements during a Board meeting and on the spot, have to review, understand, and approve the financial statements and, by inference, the underlying transactions.

For the director to competently review this financial package, he must have a basic understanding of each of the documents.

The balance sheet is a statement that reflects the financial status of the Association at a specific point in time (generally month-end or year-end). Common components of a balance sheet are:

Assets

Cash – Petty cash on hand or in checking accounts, savings accounts, or other types of accounts with a financial institution

Assessments Receivable – Amounts owed by members to the Association as of the date of the financial report

Fixed Assets – Property acquired by the Association with a useful life greater than one year and of significant cost

Prepaid Expenses – Payments of expenses in the current period that will benefit more than one period, such as insurance, which is often paid in a single payment for an annual premium

Liabilities

Accounts Payable – Expenses incurred, but not yet paid

Prepaid Assessments – Dues/assessments paid in advance

Income Taxes Payable – Income taxes due for the current year and any prior years

Fund Balances

Operating Fund – Accumulated earnings or losses of the Association from the current and prior years.

Replacement Fund – Amount set aside for future repairs and replacements (this balance should have an equal amount of cash set aside to accumulate for major expenses).

The income statement reflects, for a period of time, the income and expense activities of the Association. A preferred format would reflect both the current month’s and year-to-date budgeted and actual activities. Revenues generally consist of member assessments, fines, vending machine, parking, or other income and interest income. Expenses would include operating maintenance costs, utilities, management company fees, and other administrative and operating fees. Amounts transferred to reserves are generally reflected as an expense of the operating budget, unless financial statements are prepared on a fund basis.

The general ledger is a document which underlies the financial statements and summarizes all activity by account. For instance, if three different checks during the month were written for repairs, they would be grouped into the repairs expense account (even though the checks were not in sequential order). The total of those three checks would represent the current month’s total repair expense, which should agree with the income statement. This document can be used by the director to research questions such as “what is in utility or repair expense this month?”, and “why is it so high compared to prior months or prior years?” The general ledger should provide sufficient detail for you to find the answer to that question.

The cash disbursements journal is simply a listing of checks in numerical order for the current month, listing the date, payee, and amount.

The other reports are self-explanatory.

The procedures that the director might employ in analyzing these documents should consist of:

  1. Examine the balance sheet and compare it against prior periods to see that cash balances and assessments receivable balances appear reasonable. Note if there are any significant fluctuations between restricted reserves in the current period versus prior periods.
  2. Examine the bank reconciliations and see that they agree to the amounts reflected as cash on the balance sheet. Investigate any differences. Also, make sure they agree with the bank statements. The bank reconciliation should begin with cash per bank and reconcile down to cash per financial statements and general ledger. The reconciling items will generally consist of deposits in transit and outstanding checks. Investigate and question any large or old outstanding checks.
  3. Review the bank statements to ascertain that all interest income has been recorded in the financial statements.
  4. Make sure that all bank accounts are recorded in the general ledger of the Association.
  5. Examine the aged assessments receivable listing and compare it to the balance sheet. The total of assessments receivable should agree with the balance sheet.
  6. Review the aged assessments receivable listing and question any assessments receivable that are more than 30 days old. The Association should adopt a strict collection policy that would consist of assessment of late charges, warning letters, filing of a lien, and ultimately foreclosing on member property for non-payment of assessments. There should be no exceptions to these rules, especially for directors of the Associa­tion.
  7. Review the income statement comparison of budgeted to actual activity both for the current month and the year-to-date, and question any significant variations.
  8. For any questioned income or expense items, trace the account to the general ledger and review the detail for that account.
  9. Review the cash disbursements journal for the month and challenge the propriety of all expenses. For instance, if any checks are written to any director of the Association, find out why. If the management company is being paid more than their contractual fee, find out why.

It will take some time for the director to perform all of the above procedures, but it will provide you with insight as to the financial transactions of the Association, and a greater understanding of how your Association operates. While this may seem like too much work to be done on a monthly basis, you as a director have an obligation to the members of the Association to safeguard the assets of the Association. Only through diligence and a step-by-step procedural review of transactions can this be done.

Is it Beneficial to Use Financial Software? – Forex Trading

In any financial market, values of the assets in which you have invested fluctuate continuously within a day as well as between days and over a period of time. Manually, book keeping and tracking of behavior in market becomes very time consuming and requires considerable number of man hours.

The emergence of latest technology comes to soothe and free our lives from strenuous manual work of keeping track of movements in the market. Financial software can do many things for you in forex trading. For instance, software can give you a signal at the time when it is favourable to trade in a currency pair to make profit. It helps in assessing the amount of profit you may get and give you probable losses based on an analysis done using past trends and other relevant information that affects the market such as trade between countries.

The forecast analysis that is generally done in software may not guarantee profits but helps in taking estimated risk which means you will know and understand the type of risk you are taking in buying an asset based on the suggestions of software. There has to be constant internet connection to your personal computer in order to update the financial information into the software continuously otherwise you may miss out the hot opportunities to make profit.

Some software avail features wherein you can get alerts to your cell phone from the software about the good situation to make profit in a currency pair. Financial software can easily provide charts which can be easily read to understand the trends and it is generally considered to be a single window of financial information of forex market of the day. However, there are many available in the market but it is up to you to choose a convenient one which suits your needs best.