Avoid cash and Interac transfers to limit the risk of condominium fraud

Although cash is an effective method of payment, it carries a higher risk of misappropriation than other payment methods. This is particularly true when cash is received to pay for items over which control is limited (e.g.: chips, access cards, moving expenses, etc.).

In fact, there is a real risk that the persons receiving the payment will keep it for themselves, rather than recording the income transaction for the condominium corporation and collecting the money in return for this sale. It’s quite possible that this is done “sight unseen”, discreetly.

It’s a minor offence, but when it is carried out repeatedly, it can represent substantial sums of money that are diverted from a syndicate if the scheme is not prevented.

It’s much the same principle that applies to Interac transfers, since the person (e-mail) who receives the payment is the one who determines which bank account to cash it into. Someone could just as easily cash it in their personal account if they wanted to.

 

Collection in small syndicates

Of course, if you are a member of a small syndicate and you are in charge of collecting the proceeds of sales yourself, there may not be much at stake.

However, in the majority of cases, condominium administrators are volunteers, which means that this task is entrusted to people with little knowledge of their personal morality or financial problems. These factors could potentially lead them to embezzle funds from the syndicate.

Nevertheless, the number of transactions is relatively limited, so the risk of high stakes is also more limited.

 

Vigilance in large buildings

In larger buildings, a management firm or direct employees of the syndicate will often take on the task of collecting revenues. In this case, vigilance is crucial, as the volume of transactions is higher. As a result, the risk of fraud (intentional misappropriation of the syndicate’s assets) could be greater.

Anyone who realizes how easy it would be to appropriate sums without anyone noticing may be tempted to do so when difficult personal situations arise, such as financial issues following divorce, death, illness in the family, etc., even if the person has “technically” never defrauded in the past.

 

Limiting the risk of fraud

The best way to avoid fraud is to limit the opportunity.

That’s why it’s a good idea to prohibit cash payments and Interac transfers, and to communicate this policy clearly to your building’s co-owners and residents (click here or on the image below to download the poster “Prohibition of cash payments”).

Paiements argent comptant interdits

 

Today, it is easy to offer many secured payment methods with integrated accounting systems like UpperBee. It is therefore possible to be accommodating to residents, while being cautious to limit the risk of fraud. UpperBee offers pre-authorized payment, bank payment and credit card payment, among others.

A similar process can be set up for move-ins and move-outs. 

 

Implement validation controls

Even if your policy is to prohibit cash and Interac transfers, it’s not impossible for your employees to ignore your policy and accept them anyway. That’s why it’s important to periodically perform a number of validation checks:

 

Additional controls

A simple control that can be set up, especially if you live in a large building:

 

By adopting a clear policy on payment methods and implementing adequate validation controls, you can minimize the risk of fraud and protect your condominium’s finances.

 

» Read: Simplify and secure your co-ownership payments 

 

Elise Beauchesne, CPA, CA, Adm.A
Associate-founder
514-935-6999
[email protected]


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Tree Canada grants: funding for planting edible trees

Would you like to green up your common space and add a gourmet touch?

Tree Canada, a non-profit organization dedicated to the planting and care of trees, offers a grant for the planting of edible trees in communities. This initiative could be of interest, among others, to condominiums wishing to create a living space that is both aesthetically pleasing and productive.

What is Tree Canada’s “Edible Trees” program?

Since 2012, Tree Canada has completed over 220 Edible Trees projects and planted over 19,000 fruit and nut trees in communities across Canada.

In particular, this program aims to:

How does the grant work?

What are the benefits of edible trees for condominiums?

If you are interested in obtaining a grant to plant edible trees in your condominium, we invite you to visit the Tree Canada website for more information and to submit an application.

In summary, Tree Canada’s “Edible Trees” initiative offers a unique opportunity for condominiums to create sustainable green spaces that benefit the community and the environment.


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Bureau 6115, Montréal
(Québec)  H3K 1G6

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514 935-6999
1 855 835-6999

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