Ill. Admin. Code tit. 68 § 1445.130

Current through Register Vol. 48, No. 49, December 6, 2024

Section 1445.130 - Association Accounts

a) Association Accounts

1) "Association Accounts" means all accounts under the care and control of the Community Association Management Firm or an unaffiliated Community Association Manager, and with respect to which a Community Association Management Firm or unaffiliated Community Association Manager has signatory authority, that are deposited with or maintained by the Community Association Management Firm or the unaffiliated Community Association Manager for the benefit of the community associations represented. The maintenance of such accounts shall be custodial, and such accounts shall be in the name of the respective community association. [225 ILCS 427/55(b) ]

2) Community Association Management Firms or unaffiliated Community Association Managers who accept moneys shall maintain and deposit in an Association Account, separate and apart from personal or other business accounts, all community association moneys entrusted to them while acting as the Community Association Management Firm or as the unaffiliated Community Association Manager.

3) A Community Association Management Firm or unaffiliated Community Association Manager shall maintain a separate segregated Association Account for each association for which they provide community association management services.

4) Every Association Account shall be maintained at a federally insured depository unless otherwise directed in writing by the community association.

5) Commingling Prohibited

Each Community Association Management Firm or unaffiliated Community Association Manager shall deposit only Association Account funds received in connection with a community association in an Association Account. The funds shall not be commingled with the Community Association Management Firm's funds, the unaffiliated Community Association Manager's funds or the funds of any other community association.

6) The Community Association Management Firm or the unaffiliated Community Association Manager shall provide a receipt to the payor of any cash constituting Association Account funds and shall retain a copy of the receipt.

b) Association Account Records

Each Community Association Management Firm or unaffiliated Community Association Manager that accepts community association funds shall maintain in their office or place of business a bookkeeping system in accordance with sound accounting principles. Without limiting the foregoing, the system shall consist of at least the following Association Account Records:

1) Ledger

A ledger shall be maintained for each Association Account. The ledger shall show the chronological sequence in which funds are received and disbursed by the Community Association Manager.

A) For funds received, the ledger shall include the date the funds were received, the name of the person or entity on whose behalf the funds were delivered or means by which they were collected, the check or transaction number and the amount delivered.

B) For funds disbursed, the ledger shall include the date the funds were disbursed, the payee, the check or transaction number and the amount disbursed.

C) A running balance shall be shown after each entry (receipt or disbursement).

2) Monthly Reconciliation Statement

Each Community Association Management Firm or unaffiliated Community Association Manager shall reconcile, within 30 days after receipt of the monthly bank statement, or within such other time as established in a management agreement between a Community Association Management Firm or an unaffiliated Community Association Manager and a community association, but in no event no less than quarterly, each Association Account except when there has been no transactional activity during the previous month. Reconciliation shall include a written or electronic work sheet comparing the balances as shown on the depository statement and the ledger, respectively, to ensure agreement between the Association Account and the ledger entries with respect to the Association Account. Each reconciliation shall be kept for a t least 5 years from the last day of the month covered by the reconciliation.

3) Master Association Account Log

Each Community Association Management Firm or unaffiliated Community Association Manager shall maintain a Master Association Account Log identifying all Association Accounts, the account type, and the name and address of the depository where the Association Accounts are located. The Master Association Account Log must specifically include all bank accounts opened for a community association even if the account falls under another umbrella account.

4) A Community Association Management Firm, an unaffiliated Community Association Manager or a third-part vendor may employ a more sophisticated bookkeeping system based on sound accounting principles, including a system of electronic data processing equipment. However, any such system must contain or produce printed records containing the information required by this Section, although it need not be in the same format as provided for in this Section. Compliance with the bookkeeping duties remains the responsibility of the Community Association Management Firm or the unaffiliated Community Association Manager. The Community Association Management Firm or the unaffiliated Community Association Manager is ultimately responsible for the proper administration of the Association Accounts pursuant to this Section regardless of whether a designated Community Association Manager has been delegated by a Community Association Management Firm signatory or signing authority on Association Accounts.

5) If association funds are transferred from an Association Account to another account for disbursement, the Community Association Management Firm or unaffiliated Community Association Manager must maintain a copy of all records reflecting a disbursement from the other accounts.

6) Pursuant to Section 85 of the Act, any books, records, documents, or forms requested by the Department must be made available by the Community Association Management Firm or unaffiliated Community Association Manager within 30 days of such request.

7) Each Community Association Management Firm and unaffiliated Community Association Manager shall institute a written office policy to ensure that the community association management firm deposits and maintains Association Account funds in compliance with this Section.

8) Each Community Association Management Firm, and each Community Association Manager not associated with a Community Association Management Firm at the time of the original application for licensure and at the time of renewal of licensure shall file with the Department, on forms provided by the Department, the following information:

A) whether the applicant maintains Association Accounts;

B) the average number of Association Accounts so maintained during the most recent calendar year; and

C) whether the applicant maintains crime/fidelity insurance for such maintained Association Accounts.

9) Unless otherwise specifically set forth in a management agreement or other contract between a Community Association Management Firm or between an unaffiliated Community Association Manager and a community association, the Community Association Management Firm or unaffiliated Community Association Manager shall, within 10 days following receipt of the written request of a duly authorized representative of the association's board of directors, make available to the community association's board of directors, or its duly authorized designee, all of its Association Account Records.

10) Unless otherwise specifically set forth in a management agreement or other contract between a Community Association Management Firm and a community association or between an unaffiliated Community Association Manager and a community association, the Community Association Management Firm or unaffiliated Community Association Manager shall provide to the party identified and authorized by the community association's board of managers all Association Accounts, funds, ledgers and monthly reconciliation statements with 10 days of a written request by the community association to transition such accounts, funds and records.

c) Pursuant to Section 105 of the Act, the Department shall have the power to subpoena documents, books, records, or other materials and to bring before it any person and to take testimony either orally, by written interrogatory or any combination thereof, in order to enforce this Section.

d) Violations

Any licensee who violates any of the provisions of this Section may be deemed to have endangered the public interest pursuant to Section 85 of the Act and may be subject to discipline pursuant to Section 85 of the Act.

Ill. Admin. Code tit. 68, § 1445.130

Amended at 47 Ill. Reg. 8409, effective 6/2/2023