ApartmentADDA's workshop on Financial Governance in Residential Communities

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This session was on "Financial Governance" by Arathi Manay. Arathi brought in her experience of being a President of a 200 Apartment Complex, as well as over-seeing the Finances of one of the most popular lake Trusts of Bangalore.

The resulting discussion was around the various ways that Financial Irregularities can happen in Apartment Associations and the Controls that can be placed to detect and prevent them.

This Slideshare showcases few Learnings specific to Financial Governance for Apartment & Villa Complexes, from an Ex-President of Apartment Complex.

Check the link below for more details :
http://apartmentadda.com/blog/blog/2013/10/11/workshop-for-treasurers-2/

Published in: Economy & Finance, Business
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ApartmentADDA's workshop on Financial Governance in Residential Communities

  1. 1. Financial Governance in Residential Communities Presented by Arathi Manay in
  2. 2. Financial Governance • Irregularities – Prevention – Detection • Probity – To ensure residents get the best value for the money spent – Transparency
  3. 3. Irregularities • In inflow and outflow • Examples – “Borrowing” money from the petty cash box – Paying for services not rendered – Paying twice for the same service • Weak points – Cash payments – Measuring services rendered (e.g. diesel purchases, housekeeping headcount) – Inventory (e.g. diesel, materials)
  4. 4. Irregularities - Prevention • Prevention is better than cure – Set up ledger heads to capture details – Accountant/ accounts person separate from Auditor – Maximise cheque payments – Set petty cash limits, heads of petty cash / imprest money – Self cheque limits – Annual contracts for services – Purchases through purchase orders – Maximize cheque payments – Systematic filing of invoices to prevent duplicate payments The employees should know that fraud cannot be hidden for long
  5. 5. Irregularities - Detection • Detection – Timely so that damage can be contained – Through periodic random audits by committee members – Reconciliation of petty cash, bank books – in the presence of the responsible manager – Check invoices, and check them vs. contracts – Spending trends (tanker water, consumables, diesel) – Biometric attendance records for housekeeping and security vs. actual
  6. 6. Ensuring probity • Associations are guardians of public money • Should be and should be seen as above board – Members should sign a No Conflict of Interest (?) • Implement and maintain systems to prevent and detect irregularities • Ensure – Best value is obtained for money spent – Transparency of accounts
  7. 7. Best value • Paying dues on time, without penalties • Multiple quotes, benchmarking • Negotiate AMCs • Avoid illegal dealings • Avoid middlemen • Question demands made by govt agencies • Builder-related compliance • Stay informed – internet, networking
  8. 8. In Summary • Irregularities occur • Need to be prevented and detected systemically and quickly • Associations are guardians of residents’ money • Residents need to be assured that their money is safe and well spent.

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