Reimbursement to Board Members are Problematic
When board members pay vendors and contractors with their own funds and then seek reimbursement from the management company, it creates accounting and liability issues. Under these circumstances, the vendor or contractor rarely submits his or her proof of license, proof of insurance naming the association as additional insured, and a W-9 form so the association can report the amounts paid to the IRS and FTB. All payments to vendors and contractors should be made by the management company in order to assure legal compliance and to minimize the association’s exposure to liability. See: How Coast Management of California Processes Invoices.