South Austin HOA suing former employees for misusing organization funds


AUSTIN (KXAN) — The Shady Hollow Neighborhood Association filed a lawsuit last week against two of its former employees. The lawsuit alleges that the former general manager used money from the HOA account to pay off his own credit card balance.

The president of the HOA Board told KXAN they first became aware of the problem at the end of December. They’re now working to determine exactly how much of the HOA money was used for the general manager’s personal purchases.

Michael Cain, the board president, said, “Merchants [now] have to cooperate with providing receipts and see if it was a valid purchase, not a valid purchase.”

According to the lawsuit, there were several charges for gift cards and items on on the general manager’s credit card.

The general manager and bookkeeper were hired in 2010 under different HOA leadership. The current board says the HOA policy requires new hires to undergo background checks, but they couldn’t be sure if that policy was followed since they didn’t do the hiring of this general manager.

The board fired the general manager and bookkeeper last month.

The HOA says they cannot comment on the details of the lawsuit because it’s an ongoing case, but some neighbors said they want to know exactly what happened. “I want to know how much money we’re talking about, what are the next steps,” one neighbor said.

The neighbors told us they pay their HOA dues twice a year, each payment totaling around $250.

The lawsuit seeks damages ranging from $200,000 to $1 million.

In the meantime, as the HOA searches for a new general manager, they say they have volunteers filling in and it’s business as usual.

Cain said, “The open records act, anybody can come in at any time and ask to see the financial records of this organization and so we have nothing to hide.”

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