OWCAM (Oregon Washington Community Association Managers)

2. OWCAM (Oregon Washington Community Association Managers) PRESENTS WHEN IS A GIFT A BRIBE?

3. HOW IMPORTANT IS ETHICS? TRY NOT TO BECOME MEN OF SUCCESS, RATHER BECOME MEN OF VALUE Albert Einstein OWCAM - When Is A Gift A Bribe?

4. DO NO HARM: The Chief obligation of a professional is to “DO NO HARM”. This concept dates back over 2500 years to the Hippocratic Oath: Above all, not knowingly to do harm. • SO WHAT DOES THIS MEAN TO YOU • OWCAM was formed as a means to identify highly ethical individuals in the community association industry and it continues to recognize and certify only those individuals who agree to abide by the organizations ethical standards. • By seeking and attaining certification, the OWCAM Member assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.

5. COMPLIANCE • Compliance with the ethical rules depends first on each Member’s understanding of the rules and voluntary actions. • Second, compliance is reinforced by peers and public opinion. • Ultimately, compliance may depend on disciplinary proceedings against members who fail to abide by the rules.

6. THE CHOICE IS YOURS!

7. PRINCIPLES • The principles behind the ethical rules express the profession's recognition of its responsibilities to the public; to clients, and to colleagues. They guide Members in the performance of their professional responsibilities and express the basic tenets of ethical and professional conduct. The principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.

8. OWCAM “No man can climb out beyond the limitations of his own character.” John Morley

9. Theodore Hesburgh said: • You don’t make decisions that are easy • You don’t make decisions that are cheap • You don’t make decisions that are popular • You make decisions because: THEY ARE THE RIGHT DECISIONS

10. INTEGRITY & OBJECTIVITY

11. OWCAM – WHEN IS A GIFT A BRIBE?GRATUITIES FEES & COMMISSIONS • 6.00 GRATUITIES It shall be the policy of the Oregon-Washington Community Association Managers to discourage the acceptance by Members of gifts, entertainment, or other favors from existing or prospective clients, vendors or suppliers who act on behalf of the Member's clients, when such acceptance can unduly influence the Member. No Member, or employee of a Member, may accept any unearned fees or other forms of remuneration that may actually be, or appear to be, a conflict of interest. • 6-01: Fees and Commissions The Member is prohibited from receiving undisclosed referral fees, commissions or similar gratuities in cash or in kind for recommending to or purchasing material or services on behalf of a client. a. The acceptance of any gratuity in cash is prohibited. b. The acceptance of any gratuity by gift certificate, or in kind, including but not limited to, meals, entertainment, housing, transportation, professional services or of any other nature, having a cumulative value in excess of $50 (fifty dollars) from any one person or business in any twelve (12) month period shall be fully disclosed to all clients which have procured services from the providing person or business and to all clients who contemplate the procurement of such services.

13. OWCAM - WHY WOULD YOU?

14. ETHICS IS WHAT YOU DO WHEN NO ONE IS LOOKING

16. Keeping it Clean: Bidding Processes for Associations • Premise • A fair, transparent, and objective bidding process provides the best overall value to the Association • Contractors, Consultants, and other vendors deserve an equal opportunity to submit, modify, and communicate their project proposals to the Association

17. Estimates vs. Bids • An Estimate is the projected cost of a requested scope of work, often based on schematic or conceptual information, and will vary based on the estimator’s assumptions whatever the information that’s been provided. • A Bid is a proposal from the provider that details their specific costs, fees, terms, and conditions for conducting a defined scope of work, usually based on drawings, specifications, and measurements

18. Competitive Bidding • A competitive bid involves each contractor submitting a sealed bid in competition with other contractors to conduct the work • This will often result in the lowest overall project costs, but is strongly dependent on complete and accurate bidding documents to minimize Change Orders • Unless your bid list is limited to pre-qualified contractors, you run the risk of awarding the job to a low-cost but high-risk bid “winner”

19. Negotiated Bidding • A negotiated bid can involve any combination of arrangements between the Association, consultants, and contractors • This can often result in a faster project start, and can building upon project knowledge or a previously established relationship between the Association and the contractor. • However, negotiated contracts can be challenged (accurately, or not) by the homeowners as being too costly, biased, or otherwise deficient.

20. Integrity of the Bidding Process • In order to accurately compare multiple bids, they must all be based on the same information, and submitted under the same conditions • No inside information, no biased extensions of deadlines, no arbitrary exemptions from submission requirements • Clearly define and publish the selection criteria along with the invitation to bid • If any other factors are being considered besides price, list them and their weighting in the consideration • The low bid is often not the “best” bid, but you have to establish your criteria before you issue the invitation

21. Bid Shopping = Unethical • Handing one contractor’s competitive price or documents to another, either in an attempt to drive the project’s costs down, or to hand the project to a particular bidder is unethical • Bid submissions contain proprietary information, and represent many hours of work and costs incurred by the contractor. • Sharing this information with anyone other than the end client, outside of the context of the bidding guidelines, is seen as promoting unfair competition, and is a violation of the law in multiple states

22. Be fair, be consistent, and be ethical • Only invite participants to bid who are qualified and capable of winning and completing the work • Issue the same information and bidding guidelines to every bidder, and if exceptions or extensions must be made, then they must be given to all parties equally • Choose to work with industry partners who share your values of integrity and transparency, and speak out when you feel that this is being compromised at the expense of your Association.

24. EMPLOYEE EMBEZZLEMENT STUART K. COHEN, ESQ. LANDYE BENNETT BLUMSTEIN

25. WHAT IS EMBEZZLEMENT? • Theft of Company or Client Property • How is it Done • Skimming (Falsifying Statements) • Forging Checks • Payments to Dummy Accounts • Stealing Petty Cash • Electronic Transfers out of Accounts • Padded Expense Accounts

26. WHAT TO DO IF YOU DISCOVER THAT AN EMPLOYEE IS STEALING • Investigate • Suspend Employee Pending Investigation • Notify Financial Institutions • Call Attorney • Contact the Police • Engage Auditors • Notify Insurance Company

27. WHAT TO DO IF THE OWNER IS EMBEZZLING CLIENT FUNDS • Call your Attorney Immediately • Whistler Blower Protection • Fiduciary Duty to your Associations • Failure to Disclose could lead to liability

28. INSURANCE COVERAGE • Check Your Insurance Policies • Employee Dishonesty Coverage • Theft of Property • Exclusions • Make Sure You Get The Right Endorsements • Make Sure Your Associations Have Adequate Coverage for Reserves and Operating Accounts

29. SAFEGUARDS • Annual & Surprise Audits • Separate Accounting Functions • Look for Strange Behavior • Gambling Habits • Expensive Habits • Dual Signatures and Electronic Keys • Duplicate Bank Statements