Even if the bylaws and/or state law don't require it, you absolutely
should have an audit done by an outside accountant once a year. As
board members, you have a fiduciary responsibility to the members of
the association to make sure all the financial transactions are above
board. An audit doesn't cost much and is well worth it for peace of
mind. I'd also make damn sure the association has D&O insurance to
cover liability of the board members. This is usually offered as part
of total insurance packages for condo associations.

I personally had experience with a management company that turned out
to be crooks. They came highly recommended by other associations that
they managed. I caught them before they had a chance to fleece us and
they were only on the job for about a year. They had tried to rig
bids for a $100K project, inflating the cost by 2-3X, including
submitting a phoney bid from a contractor who, when we contacted him,
said he had never even heard about the job!

After I fired them, we were updating signature cards for our checking
account at the local bank. The management company was never authorized
to have signature authority on checks. Yet, when I looked at the cards
on record at the bank, the scoundrel had his signature on there. What
he had obviously done was to add his own signature after the President
and Treasurer had signed them and before he returned them for us to the
bank. He apparently never did anything with them, but it was clear he
could have and was up to no good.

Now an audit won't prevent any of this, but it is one important step in
establishing your fiduciary responsiblity.