unauthorized board expenditure

Hi. I am the secretary on the board for my HOA. We are a very small community in rural FL. THe HOA was established back in the '80s.
My question is this:
On the recent finacial report that went out with the annual meeting letter, there was an expenditure for an atty fee of $375. I, nor the VP, and probably none of the other two board members know what this is for. I'm sure the Pres & Treas do whoever. I have an idea what this is about, however.....isn't this item/fee/etc.....supposed to be voted on by the ENTIRE board? Not just 2 members?
I do not see anything in our by-laws saying there is an incidental expenditure fee. The only expenditures I turn in are for stamps, copying, envelopes, things that like. In fact, the treas gave me a hard time when I turned in a recipt for ink cardtridges for my printer. They were near $100. In the 3 yrs since I've been sec, I had never turned in a request for reimbursement for ink. I think it'at only faif. Ink is expensive, and doesn't last, Maybe this is something that needst o be voted on as well. She just got an ok from the Pres for it. Maybe that was not correct procedure either.
Anyway.....the majority of the board have held positions for 12 plus years. They run the show. THey just followed what the previous board did, right or wrong. Well, there are new laws now, and younger people in the community that know they can challenge certain things that may not have been done "legally" by the board. I do not want to be a follower, so I've been trying to read as much as I can, and ask questions of other folks that serve on their HOA boards .
We do not have a management company. Just us 6 volunteers.
Thank you for your advice on this subject.

Cheri

Simply ask for an explanation before making any accusations/assumptions.

Cheri,

Simply ask the treasurer. I'm in a 100-home self-managed HOA in central Florida. Each month the Treasurer sends copies of the monthly financials to all board members (including the secretary). Do you have a bookkeeper or does the HOA do it themselves? Every expenditure is itemized at some point during the year in the monthly financial statements here. Copies of all checks are included with the monthly bank statements.

I had a similar question with regard to an attorney expense last year. It took me about 10 minutes to find it on my own. If I had discarded the monthly reports it might have taken half an hour to get ahold of the Treasurer and ask about it.

What does your budget look like? Is there a category for professional or legal expenditures?

Your board, depending on the governing documents and policies it has enacted, does NOT have to approve every nitpicky little expense. We have a funds-expenditure policy that authorizes most expenses under $1,000 in advance as long as the money was budgeted in the annual budget and the president and one other director sign off on the expenditure. There is a similar policy for expenses under $3,000 that require the approval of three directors AS LONG AS THE MONEY IS IN THE BUDGET for the contemplated expense. The entire policy consists of more than those two examples, but it has worked well here for many years. It's where expenses pop up that are NOT already budgeted for that the board will consider and vote on whether or not to spend any money.

In my HOA nobody would raise an eyebrow at a $375 payment to the HOA attorney as long as the expense was accounted for properly and there was some indication - in the meeting minutes or the monthly financial report - of what the expense was for.

Keep learning! When I moved here 3 years ago and asked for a copy of the most recent monthly financial statements the VP told me I was the first person in 5 years to ever express an interest in looking at them. He sent me a copy the next day. "The more eyeballs looking at this stuff, the better," was his attitude and he's a CPA. So absolutely ask questions and keep learning. Your HOA will be better off because of it.

Thank you for all your replies, and advice.
Our HOA monies are dedicated to road maintenance. At least that is all that it's suppose to be for. We do not have any common areas, pool, or landscaping that is paid for with HOA monies. We do have small expenditures like insurance, electricity for 2 street lights, stamps, envelopes, etc....Our yearly fee is only $50.
We do not have regular board meetings. Only if there is a problem. (This is how it's been run for decades) The only financial report that goes out is yearly, with the annual letter for the annual meeting.
We do not have an attorney on retainer.
I am sure that I could ask the treasurer what the atty fee is for. I believe she and the Pres initiated the call or visit to the atty, and I have a hunch why. It's a long story. However, the rest of the board should be informed on this, and I believed the board had to vote on any money spent in a manner that is not the " norm".
I attended a HOA certification class 2 yrs ago, and it was quite eye opening. Since then, I have made it a point to try and follow the laws for an HOA. This group does not. They did not like it when I told them that it was law that all board meetings were open to all members, and had to be posted when a meeting was going to take place. That hasn't happened. There is so much more that I could say, but I won't.
One thing is that the Pres and treasurer think that their titles actually give them some sort of authority above the rest. I have said that we are nothing separately, we are a BOARD of directors, and TOGETHER we make decisions. They look at me like I'm from Mars.
We've already had one instance from a resident regarding one board member's misuse of power.
Sorry for rambling.
I have mentioned to the Pres that I think we need to have a board meeting before our annual meeting next month. That there are a couple of issues to discuss. She agreed to have a meeting, but isn't aware of any issues.
I will present my concern in a professional manner, as you all have suggested.
I am very thankful for this forum. I cannot afford to see an attorney on my own for my own clarifications.

Cheri,

We don't have an attorney on retainer either.
However, we do have an attorney listed as our registered agent.
We pay a yearly fee for this.

Thank you Gino.
I submit the form to the state each year, so the atty fee is not that. And looking back at each year's financial report, there are some years where there is no atty fee.
I believe the Pres consulted an atty about one of the lots in here, that is NOT part of the HOA. (we have 6 such lots/houses) It's in their deed, and in the legal description of the neighborhood. The treas kept trying to go after one of the owners of such a lot for their $50 fee, and he kept writing back saying he did not have to pay. He's not part of the HOA. This is a vacant lot, and the owner lives up north. So he's not even using the roads. Quite a few lots were bought and paid for before the HOA was created, and they were given the option to join. 6 chose not to join. The $50 is for road maintenance. That is what it was created for, and says so in our governing documents. Every other of these homeowners, or lot owners, pays the $50 voluntarily. I kept trying to explain to the treas that this person does NOT have to voluntarily pay, and that we, as the HOA, need to leave him alone. If he wanted to be nasty and start a lawsuit for harassment, he could. I researched all the lots in here, from the time the plot of land was purchased from the original owner. My word was not good enough. And she couldn't leave it alone. SO I THINK this is what the atty fee is for. After all these years, they finally (possibly) have been told to leave this person alone. They need to leave the other 5 alone too, should anything arise, but I'm sure they won't.
Anyway, I will ask politely at the board meeting.
In our by-laws, CCR's, etc...I did not see anything about only the Pres being the one to talk with an atty. I just feel we should have been consulted before or after this atty consultation. If they would have listened to ME, they would have saved $375. But, I'm from Mars.
We have 4 officers, and only 2 directors. So, if there's a vote on something at a board meeting, only 2 people are voting?

Thanks again to all.

So you have a total of 6, Cheri? How many directors do your Bylaws say you should have? In most HOAs, directors elect officers from among themselves. Some Bylaws require that the president be a director. If some officers are not directors they shouldn't be voting on anything. Only directors vote at board meetings.

As secretary, are you a director, Cheri?

I fully agree that you need to be informed about the purpose of this expenditure. while our president may speak by phone with our HOA attorney (which is included in our $500 annual retainer), she has NO authority to decide on her own to pay the attorney for advice. The Board at a meeting decides that. I don't agree that $375 is "piddly," especially in a "very small" HOA whose budget may not be large.

Usually the board will authorize someone to speak to the attorney even if it's the president who makes the contact. So while the $375 payment without a board vote might be proper it sounds like the president making the decision on his own to speak to the attorney may not have been. A red flag about how things are run, for sure, even if that one consultation isn't a huge deal.

In my opinion a lot of this overreach by association presidents happens because there's often a leadership or power vacuum at the top. Nobody has the time or inclination to do the work that needs to be done and many boards are more than happy to delegate most of it to the president. It saves them from having to do it, so they happily elect Johnny "Power Trip" Jones as president. Which is maybe OK with the caveat that every board, year in and year out, should make the conscious decision that that's the way they want to do it; it's not the law-given right of a president to sit at the top and dictate how things are done. If that doesn't happen then eventually the situation becomes ossified. It gradually becomes "common knowledge" that the president is the de facto leader and has all this power because "that's the way we have always done it". If you get a president in there who actually believes all that it can be very hard to get him or her out once they're entrenched.

That's my working hypothesis anyway.

So... You have 4 officers and only 2 directors? As Kerry asks, are there 6 directors on the board with 4 of them also serving as officers? All directors should be voting even if they're also officers (President, VP, Treasurer, Secretary). What I meant earlier is that everyone voting does so in their capacity as director (even if they also happen to be an officer). Some associations do allow non-directors to serve as officers, but that's usually not the case. It depends on the governing documents.

Cheri

Typically only one BOD Member (usually the Pres.) will be designated to talk to the HOA Attorney about any issue. This does not give them permission to spend any money.

Like the BOD says: OK, go ahead and talk to the attorney but get back to us on any cost we will incur before we decide to go ahead.

Thanks.
We have a hard time getting anyone to volunteer to be on the board as it is. lol
A couple of years ago, a president stepped down, and even though in our by-laws we were to fill that position from within, it was opened up to the membership for volunteers to fill a vacancy on the board. ONE person volunteered, and was voted to fill the position of president. Then this lead to other issues, and last year that president stepped down.
I guess that's one reason why the board members we have (most of us) have been on the board for multiple terms. No one wants to do this job. Just criticize the ones that do.
There are problems with the way the board runs, but no one wants to step up and join in and help.
Probably that way everywhere.
Thanks again to everyone for their advice and suggestions.