Condo corporations in Ontario are losing millions of dollars to fraud through outdated procurement processes – often without any awareness or subsequent detection.

The danger lies in outdated processes that lack visibility and control, which leave condos vulnerable to fraud vectors(i) including:

1.    Under-the-table payments via vendor sole sourcing or bid rigging
2.    Unsupported disbursements via missing or altered invoices
3.    Diversion of funds via cheque fraud

Funnelling business to a specific vendor in exchange for personal financial gain via secret commission or kickback is a crime, as is sharing information on bid pricing to facilitate collusion(ii). Both result in condos spending more than they should for services and, therefore, incurring financial loss. In one case in 2022, an interior design company pleaded guilty to bid rigging and paid over a million dollars in settlement. This was about the documented cases, but the actual losses incurred by condos may have been much higher.

Unsupported disbursements occur when supporting documentation is either missing or does not provide clear evidence of the nature and amount of the expenditure. Invoices may also be altered to increase the price from the original amount. 

Cheque payments have become an alarmingly frequent fraud vector. According to TD Bank(iii) , over 70% of businesses reported being targets of cheque fraud in 2023. It typically starts with interception of cheques sent by mail to vendors. In the GTA, 30% of mailboxes were broken into in 2023 as bad actors collected the cheques with the account numbers, signatures and other data they used to produce fake cheques. In May 2025, two men were arrested on 80 charges after specifically targeting mailrooms in condos, where they wore Canada Post uniforms and used a Canada Post master key. 

Beyond intentional fraud, unintentional errors can also lead to financial losses. It’s important to ensure your corporation is operating within CMRAO regulations(iv) to avoid flawed processes that can lead to errors. For example, condominiums whose management includes Limited Licensees must ensure that these Limited Licensees are operating according to CMRAO regulations . The regulations include a restriction that Limited Licensees “refrain from making expenditures in the client’s name that exceed $500, not including the reserve fund, except with the prior approval of the supervising licensee”. 

For all these reasons, the need for transparency and fraud prevention in procurement and payments has never been greater. Directors and property managers are increasingly turning to digital solutions to safeguard finances, ensure accountability, and build trust with owners.

Manual processes make it difficult to track spending, enforce approval controls, or detect irregularities. Paper-based systems and informal vendor relationships leave room for errors—or worse, fraud. Today, digital platforms are transforming how condos handle procurement and payments by prioritizing visibility, control, and auditability.

Modern procurement software allows managers to document every step of the purchasing process—from collecting quotes and issuing work orders to tracking vendor compliance. These platforms provide real-time visibility to directors, helping prevent unauthorized spending or vendor favouritism. Competitive bidding processes become standardized, transparent, and fully reportable. Regulations on Limited Licensees can be enforced to ensure that a General Licensee is providing the required supervision. 

When considering any digital platform, the basic requirements are that it be role-based, accessible from any device with a secure connection protected by a password and MFA (Multi-Factor Authentication), and easy to use.

Specific features to look for in a digital procurement solution include:
a)    Visibility to all requests, jobs and quotations
b)    Configurable approval requirements that enforce CMRAO regulations and your corporation’s limitations on expenditures by your property manager
c)    Collection and tracking of engineering reports when required
d)    Visibility to vendor history and ratings
e)    The ability to issue and track digital purchase orders
f)    Integration with the accounting system to ensure matching of vendors and GL accounts
g)    Integration with the resident portal system to receive requests and provide resident updates
h)    Managing chargebacks, with the ability to specify if the resident’s prior approval is required
i)    Integration with the payment system to match invoices to purchase orders and history

Payment systems have also evolved to prevent financial misuse. With an effective digital payment solution, each transaction is logged, approved according to policy, and easily audited. Dual approvals and digital sign-offs reduce the risk of internal fraud, while also satisfying increasingly strict regulatory and insurance requirements. Electronic Fund Transfers (EFTs) and virtual credit cards eliminate the opportunity for cheque fraud. 

Combining a digital procurement solution with a digital payment system delivers the ideal fraud prevention scenario of a seamless Procure-to-Pay solution. The process becomes transparent, traceable, and controlled from the initial request, definition of the work (including an engineering report if required) through vendor selection, quoting, approval, issuing a purchase order acknowledging the work is complete, receipt of the invoice, matching to the purchase order, and digital approval and payment. 
By adopting these technologies, condo corporations can ensure every dollar is accounted for—boosting confidence among owners and mitigating financial risk. For directors and managers, the future of condo management lies in systems that make fraud prevention part of everyday operations through transparency, control and accountability. 

Wally Vogel, CET, is CEO of SparcPay Inc.  and has over three decades of experience providing secure digital payment processing solutions to clients including IBM, Citibank, RBC and Transamerica. SparcPay is bringing this level of security and convenience to small and medium enterprises with a focus on condominium corporations. SparcPay is a Canadian company, trusted by thousands of condominium corporations to prevent fraud with secure digital processes. Their SparcPro platform delivers an end-to-end digital procure-to-pay solution for transparency and financial control in condominium management.

[1] Fraud and Financial Crime in Condominiums, CM Magazine, Fall 2021, Brian Antman (https://acmo.org/publications/cm-magazine/article/343)

[2] Bid Rigging, CCI Toronto Condovoice Magazine, Spring 2024, Katrina Paray & Bharat Kapoor (https://cci.ca/resource-centre/view/1850)

[3] Protecting your Condo from Cheque Fraud, an Expert Panel Webinar, March 2025, Leila Karem, Gareth Stackhouse & Wally Vogel (https://www.youtube.com/watch?v=OkOuz3i0ARM)

[4] Ontario Law, Reg. 123/17, Section 8 (https://www.ontario.ca/laws/regulation/170123#BK12)

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