—Manhattan Board President
“Since the composition of the board has significantly changed, it might be a useful exercise to have separate meetings with the various professionals assisting the apartment corporation, and if there is any concern as to where their loyalty is placed, steps should be taken over time to replace those professionals. Even, however, if it is determined that all of the professionals should be replaced, there should never be a wholesale replacement of an apartment corporation’s managing agent, accountant and attorney at the same time. Replacements should be performed over a period of many months, if not several years, as a whole host of institutional memory and records may be lost forever when all professionals are changed at one time. Regardless of who was the treasurer of the apartment corporation, there should have been, or now should be created a system of checks and balances which prevents one board member from effectively controlling all financial aspects of the corporation.
“The requirement of dual signatures on checks, supporting bills accompanying checks and duplicate statements mailed to other officers are terrific starts. If there are any concerns about improprieties of the sponsor/treasurer, the first place that I would look as either an accountant or board member is at the line items of maintenance collections on the income side and repairs/maintenance on the expense side; the former to confirm that the sponsor has truly made all payments due for the apartments which it owns, and the latter to make sure that the sponsor has not used funds of the corporation to defray repairs and renovations within sponsor apartments. Remember however that sponsor is not a four-letter word and the number of honorable sponsors with the best interests of the apartment corporation at heart far exceeds the de minimus number of sponsors attempting to run apartment corporations for their own self interest.”