Understanding the Process of Reserve Management Planning

December 7th, 2011 by admin No comments »

The Reserve Management Plan (RMP) or Reserve Study (RS) is a document that is created for the management company and association of any shared ownership property, such as; resorts, timeshares, fractional properties, condominiums and condo hotels. The RMP establishes a schedule by which funding for maintenance, refurbishment, repair and replacement of common area components are achieved and provides assurance that funding to maintain the property will be available when needed.

Based on the funding needs that are documented in a good RMP or RS, reserve accounts are established and maintained to hold the funds for replacement of assets and any long-term or deferred maintenance that the association is responsible for.

Why have a Reserve Management Plan

It is the fiduciary responsibility of the management company and/or the HOA board members to be proactive in the protection and good management of the shared ownership investment. The RMP offers an invaluable management tool for long range planning and advanced scheduling of major repairs or replacement of components, while providing documentation of good stewardship of the association assets and reserves. Owners are also assured that their investment will be enhanced over time through an equitable and systematic approach to accumulating the replacement reserves.

A quality RMP should be more than a paperweight or expensive door stop. It should be a working document that includes the following elements in a clear, easily understood format:

• Inventory of Components and their estimate useful life

• Estimate remaining useful life of each component

• The current replacement cost for each component

• The future replacement cost for each component

• A funding and reserve summary

• An analysis of the current financial condition of the association

• Funding recommendations and projections for a thirty year schedule

• And any limitations and disclosures

What Type of Study

All studies and evaluations should meet or exceed the established criteria set forth by the Community Associations Institute (CAI) and the American Institute of Certified Public Accountants (AICPA); both have published guidelines which dictate minimum requirements for what constitutes a thorough reserve study. » Read more: Understanding the Process of Reserve Management Planning

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How to Reduce Employee Theft – Risk Management

December 7th, 2011 by admin No comments »

We all know how society, and the politicians in the big seats, are rubbing the fact that we are economically recessing and the fight for jobs or promotions is rising at epic proportions. This mad dash for the top spots within a company has caused quite a stir among project and risk management specialists due mainly to the rise of internal threats, such as employee theft and dishonesty. How can one invoke a plan to either completely negate these employee heists, or at least create an awareness around upper management to get plans in place to make employees stop? Certainly there are reasons for this type of issue, and perhaps they are imminent.

In looking at the rise of employee theft of money or property, it should first be examined exactly what kind of pay, incentives and other perks are being given to the employee as compensation for their works. If the company has blatantly forgotten to evaluate the employee for a possible pay increase based on performance, then it is no wonder an employee is doing other illegal acts to make ends meet: the company is virtually forcing these workers to do such. Make sure that each position has weighed out what the job is worth along with incentives to look forward to. Look closely at the economy and make sure that fairness in pay structure is being met; otherwise, you will probably endure continual dishonesty no matter how many employees you burn through.

Next task to tackle in the risk management game is to check out the current method of hiring new employees. Are the proper background checks being executed to insure that thieves are not hired, violent felons are discluded and those with drug habits are not hired? Risk management is more than simply weighing losses and gains; it entails prudent hiring practices that include protecting the other employees and assets, and by not enforcing a method of records evaluation into the hiring process, you are risking people and money. Make sure to brainstorm a simple method to quickly access criminal records, even if it’s being conducted by an assistant during an interview. At least the perspective employee may know ahead of time that the company is serious about protecting the inner sanctum. » Read more: How to Reduce Employee Theft – Risk Management

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