Sorting through a stack of miscellaneous receipts, contracts, and other documents can be tedious at best. Having no organizational system in place to make that search any easier is downright cruelty. Ideally, every HOA board should take time to analyze their current record keeping habits and consider ways to improve them. Otherwise board members will spend more time looking for a document than completing their responsibilities.
Color-coding and labeling is all well and good, but there are many other aspects that should be taken into account. Here are three tips for superior HOA record keeping.
Create a System for HOA Record Keeping
Record keeping relies on a reliable organizational system, but that’s a blanket solution. In order to truly create a system that works for your association, you need to address your association’s specific needs. That means answering a few questions first.
What is considered a record?
Is every document that gets written considered a record, or is it only documents that get discussed during meetings? It’s essential for board members to contemplate what they should refer to as a “record” and what is simply a passing memo. Typically, if something was discussed during a meeting it would then be considered a record. In cases where separate documents refer to the same thing, you might only consider one as a record worth keeping. For example, there are two documents referring to an ice cream party the board held at their last meeting: a flyer that was posted around the neighborhood and a receipt from the vendor. You might then consider the receipt a more formal record of the event versus the flyer.
How will you access them?
A physical filing system – that is, one that exists in the real world – is considerably outdated. Yet, some associations find that they do the majority of their storage in filing cabinets. However, the digital age has allowed many associations to store their records in online databases. This also makes for easier access and distribution. Some physical documents will still need to be kept regardless of a digital system though.
Who has permission to access?
Some documents should be for the eyes of board members only, while others should be made available to homeowners. That means you will need to determine which documents are which and then figure out a way to restrict or give access to the right people. Having a good system in place will also allow for faster recovery times when a document needs to be produced. Moreover, delegating the task of producing records to single person could be a method of efficiency by eliminating confusion.
What about third-parties?
Many associations utilize the expertise and resources of a remote management company such as Clark Simson Miller. CSM will handle many of the back-office, collection, and financial services of an association – but that will require access to the record keeping system. Board members should take into account any third-party companies like CSM so that their system can run efficiently.
Figure Out the Length of Record Retention
Just as not every document should be considered a record, not every record will need to be kept for the same duration. Each record has a shelf-life and some may need to be kept for as long as the association exists. Records that are higher up the document hierarchy, for instance, will likely need to be stored for much longer than those at a lower tier. Board members can check with their local governing authorities to determine which relevant records need to be kept and for how long. Other records that aren’t regulated by a higher authority might have to be retained for up to 10 years or more, depending on your association bylaws. Even if the length of retention for certain records isn’t clearly stated in the bylaws, it will still need to be determined by the board members. Legal records, meeting minutes, bylaws, CC&Rs, and other important records should most likely be kept indefinitely. Warranties, for instance, may only need to be kept for the duration of the warranty itself.
Implement a Removal Plan
What happens when you no longer need to hold on to a record? Should you shred it? Burn it? Whatever your method of destroying irrelevant records, the board should be unanimous on it. More importantly, they should all follow through with it. When records that no longer need to be kept are ignored, clutter ensues. Just as a method of organization is imperative to record keeping, so is a method of destruction. Be sure to incorporate how your documents will be destroyed into your organization system.
Record keeping is an essential function of any HOA and ensures operating efficiency. Another way to keep your association running smoothly is to request a proposal from Clark Simson Miller today. CSM provides professional support via remote HOA management to self-managed associations – without breaking the budget.