Who Can Authorize Payment of HOA Bills?

Okay, what do ya’ll think of this? The “Best Practice” in our HOA has been that all financial outlays are discussed and approved by the Board of Directors. If there is a special circumstance, an Action Without Meeting can be held and any action that may be transacted at a regular meeting may be done “offline”, by e-mail usually. And the e-mail sent by the Board member acts as a signed “consent” to the Action. Actions of course are approved by majority vote.

What has always happened in the past is that disbursements of HOA funds have always been approved this way – by a majority of the Board members approving the disbursement. But do you think that the president or other officer can approve payment of invoices without a majority vote? The closest thing I see in our Bylaws isn’t really very close:

“In addition to the duties imposed by these By-Laws or by any resolution of the Association that may hereafter be adopted, the Board of Directors shall have the power to perform and be responsible for any and all functions necessary or proper for the administration and operation of the Development, unless otherwise particularly and specifically given to the membership.”

So it might be –proper—that a majority approve outlays, but is it required?

Thanks,

Walt

what do your bylaws say in relation to the function of the treasurer ?

surely you do not require a BOD vote to pay every electric bill !

for preparing = writing / filling out

executing = signing

I would NOT have the management company actually disbursing funds.

They may, IMO, prepare the check for the treasurer's signature, but, should NOT be an authorized signature with your bank.

"On a side note, it's typical that action without meetings require unanimous approval. A simple majority normally isn't enough."

Under GA law, all the Board members don't even have to be notified of an Action Without Meeting. Which is freaky.

"Section 7. Action Without A Meeting. Any action by the Board of Directors or by any committee appointed by the Board of Directors required or permitted to be taken at any meeting may be taken without a meeting if, prior to such action, one or more written consents describing the action taken are signed by no less than a majority of the members of the Board of Directors or of such committee, as the case may be. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors or of the appropriate committee and such consent or consents shall be treated for all purposes as a vote at a meeting . Action taken under this provision is effective when the last Director or committee member signs the consent, unless the consent specifies a different effective date."

I am now advised that the president of the Association is stepping down at the Annual Meeting which is Wednesday next. He had said he was staying another year.

So I like to think it is because of my actions, but I doubt if he will tell me.

Walt

My CCR's require full fidelity bonds for all signatories.

We have 3 at any given time to reduce cost of said bond.

NOT 'theft' insurance, but actual fidelity bonding - the issuing co. does the criminal b/g checking - cheap @ $450 per year (total for all 3).

250K

in a few years we will need more, so we will have to pay 2X

I was elected to our HOA board last November and became the Prez in December. This community has been in existence since 2008 and in 2012 control passed from the developer to the community. Since 2008, the same management company has been handing things for the HOA. In looking at the financials I determined that the HOA had operated in the same way you describe, with the Management Company collecting assessments, paying bills, handling collections and deed restrictions.

The problem as I saw things was that all the board got was a monthly and quarterly summary of bills in various categories (landscaping, repairs, maintenance etc). The only people who actually saw the invoices for billing were the property manager and the folks in the MC responsible for paying bills.

In February I got access to the bill paying system where I could see the invoices, see the check register etc. But that still did not give me any permission to approve or reject a billing - this is done by the Management Company. Without director oversight, we are not only in violation of our governing documents which specify who can sign checks, but it also opens the system up to potential abuse and fraud.

There is nothing to prevent a company (Landscape for example) submitting an additional bill for repairs and getting it paid. When I began reviewing the invoices I noticed there had been credit card payments made for the previous 6 months. In asking the remaining director I discovered that the board had authorized a cc for the property manager to pay small bills and necessary items. As they had no access to the payment system, they were unable to see that the card had been used to rack up nearly $4000 in charges. Charges which turned out to be for the personal benefit of the PM (flat screen tv, laptop computer, food, gift cards etc, and had been hidden in the monthly summaries as being repair expenses.

The PM was fired and the MC reimbursed the association for the fraudulent purchases. I've turned over the file to our local law enforcement department.

The MC has promised that the directors will be given the appropriate permissions to approve any invoice that is paid out of our accounts - but as of this date none has been given.

It is very important that those of us who are entrusted with the care of association funds provide adequate oversight over their expenditure.

I'd opine that if a Management Company does not include members of the board in the approval process for payment of bills from association funds, the the board needs to find another Management Company.

The personal signature is merely a promise to the bond issuer of restitution should a court not award same. It does NOT effect a non criminal or other person.

NON ISSUE

however, there WILL be a criminal b/g check of potential 'bondees'