Financial Inaccurate

Started by BethS1 • 4 replies • 1564 views

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BethS1 (New York)
Posts: 28

Posted:

What do you do when you are a board member and know the financials are inaccurate and the other board members think it is no big deal? The other members, some from a previous board are aware of it and they did nothing then and they are doing nothing now. Isn't this considered negligence? I have voiced my objection over and over, they refuse an audit, they refuse to handle it properly. I want off the board because of this but yet I want to know what is going on. I think they are dishonest and they have an obligation to make sure funds are distributed accordingly and not blow off (large) discrepencies from the last board.

RonaldW (South Carolina)
Posts: 901

Posted:

Look in the CC&Rs to see if an annual audit is required. Also, isn't the board required to provide an accounting of expenses to the members?

As a board member you should be able to make a motion for disclosure of financial records.

A member (try to get someone else to do this) should be able to demand financial records.

Ron
SC

SteveJ (Indiana)
Posts: 5

Posted:

Beth,

Sounds like what I am running into here also. I have given up with trying to deal with the board members directly. Its impossible if they openly refuse to follow the bylaws. My only recourse is legal action. Maybe you have considered the same? I feel its in the best interest of the community to clean up this mess, I'm just trying to make sure I don't end up with the legal bills. If you go that route maybe we help each other by comparing notes.

JosephW (Michigan)
Posts: 882

Posted:

A couple of things:

If there routinely is a motion to accept the financial report at a board meeting, vote no and state that you want the minutes to reflect your vote (reduces your potential liability). At the next meeting, make sure that vote is recorded properly or vote no on the minutes also. Don't ever vote to accept a financial report that you believe is incorrect.

Draft a letter to the board of directors, stating your opinion regarding the accuracy of the financial statements and requesting a full audit of the books, in order to get a clean start. State that at the next annual meeting of the members, when the financial report is is presented for the owners' acceptance, you will again vote no publicly, unless an audit has been undertaken.

You could also ask the associations attorney and insurance agent about the potential liability of the board members for knowingly reporting false (if it is) financial information to the members.

Joe

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BethS1 (New York)
Posts: 28

Posted:

The attorney route was tried before, but the prez at the time ran up legal fees at the associations expense and wanted to charge for any detail because it's in the condo laws that we can charge people for records. (The other board members "say" they didn't know what was going on but somehow let him continue to run things another 6 months after that)

Since he has been removed, there are now 3 board members that want his accounting looked at because things just aren't adding up. We will not agree to any financial statement at year end till the matter is cleared up. As far as other members, they give a generic statement to the owners at year end and we can tell last years is incorrect by what we been able to find out on our own detective work.

We are still searching the bylaws for the exact date of financials because we will be interested to see the surprise when they realize the financials have to be correct, detailed and have the back up if they are asked about them.

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