HOA Manager Has HOA Pay for Attendance at CAI Conference

My HOA is self-managed, with three employees. I was elected to the board in January at the Annual Meeting. The Board has three directors. Late last week the HOA business manager emailed the board that she would be attending the annual CAI conference in early May. She said that the air fare and registration ($649) had already been paid for by the HOA. The only remaining expense to the HOA is the hotel (about $400). I estimate the total costs are about $1500. The latter does not include the burden to the Association that will happen for the three days the Manager is away. I do not think the business manager is even using her vacation time for this.

The 2017 board never passed a motion to pay for the HOA business manager's attendance at this conference. The business manager contends that the annual budget, ratified by the 2016 board, has a category for "employee training and education," and so she is to be reimbursed. My HOA just imposed a 15% (of the normal annual dues) Special Assessment to pay for infrastructure. The 2017 two-person board majority is saying, no foul, this fell under the 2016 Board approved budget for 2017.

1.
How appropriate is it for the 2016 board to approve the employee's attendance at this conference in May 2017?

2.
If you were a one-person board minority, would you raise this at an open meeting, if only to put light on what happened here? I think this is my only recourse.

3.
Any other suggestions?

It is hard not to go through the looking glass here at my HOA. Many members are appalled at how the HOA pays for what I think may be fairly described as an expensive junket. I appreciate the reality check people here can provide.

my own opinion is that just because you have money in a budget line item, that doesn't mean anyone can go spend the money without notice or approval of the board, unless it is a routine expense.

It is a good opportunity to realize that you should have budget worksheets showing specifically what went into the $ amounts on each budget line. If the money was not intended for a manager but for board members, that should be spelled out. If it was intended for local conferences but not for airfare, that also should be spelled out. You had some conscious intention for the money allocated for education, what would be a good use and what wouldn't... Put it in writing.

You need to read employment contracts and board minutes to see if this education was approved by the current or a previous board.
If not, then you need to reel in the situation.

1. How appropriate is it for the 2016 board to approve the employee's attendance at this conference in May 2017?

Since attending conferences takes planning, it isn't unreasonable for the previous board to approve something for the following year. The question should be why didn't the new Board know anything about it and what procedures will you put in place to keep a future new board aware of prior board commitments.

2. If you were a one-person board minority, would you raise this at an open meeting, if only to put light on what happened here? I think this is my only recourse.

You should think about what is irking you. The expense or the fact that you were unaware of it.
Then, figure out how you want to address it (i.e. what should be changed).
Then, you need to have a proposed resolution ready to submit for review and consideration.

I like ND’s suggestion.

As Tim suggested, it may be your previous board discussed this and approved the expense along with the rest of the annual budget – did you talk to any of them about this? If so, what did they say? And yes, you should ask about the expense at the next meeting so you can get some history as to what happened.

There’s nothing wrong with employee education or attending out of state conferences (property managers should keep up on emerging issues so he or she can give the board a heads up on what it may want to think about). If the travel is work related, wouldn’t expect the employee to use his/her personal time off (I'm sure your bass doesn't do this if/when you travel on business). This isn’t necessarily a junket – why not go to the CAI website and take a look at the agenda? You may see something that catches your eye – in which case, I would tell the property manager, I expect a full report, as ND suggested which should include her attending specific sessions the board might be interested in.

Since you are self-managed, I would also expect someone to have a contingency plan for dealing with emergencies while the property manager is gone, so ask about that too. If there isn’t one, that’s what the board and property manager should address immediately, since May is around the corner. You’ll have to go ahead and pay for the hotel for this trip because the other stuff is already paid for and you probably won’t be able to get a refund. While you’re at it, I’m sure she’ll be expecting reimbursement for meals that aren’t part of the conference, so feel free to vote on some sort of per diem for that. I suggest you base it on the cost of living in Orlando – what you pay for dinner in your town may be considerably more or less than what it costs there.

When you begin to prepare next year’s budget, you can revisit employee training and see if there are cheaper ways of getting it done – CAI does have webinars she can watch and there may be a local chapter that holds seminars.

Donna, thanks for the counsel. I may be doing the first draft of the 2018 budget. A proposed breakdown of each line item in the budget sounds entirely appropriate to me. (Granted the 2018 board is not bound by said breakdown. Even each line item is only a guide and not a legal commitment.)

Tim and Shelia, I am in the process of finding out who approved what and when, and who signed the checks. For 1. Tim, your point is well taken (about how planning for such attendance does take time, so I should not begrudge the previous board possibly having approved this. Regarding 2., if the expense were not so high, I would not be so irked that I was not told. As for a resolution, I will have a motion ready. Mostly though the purpose would be to do this in front of members. I believe transparency promotes accountability.

ND and Shelia, regarding a trip report: I agree this would be worthwhile, generally speaking. E.g. I see the CAI Conferences has a one-hour session on the Fair Housing Act and avoiding discrimination claims. My business manager sorely needs education in this area. Unfortunately I find the business manager somewhat lacking in smarts. From discussions with the manager, I feel the education she has had to date on this has had zero effect. Said education includes an enormous legal claim with HUD that cost everyone here the equivalent of a few months of extra assessment. Still, you all are helping to ground me with future managers.

Shelia, fortunately an assistant manager has been undergoing grooming in the last few years. I expect he will be able to handle much of what transpires while the manager is away.

ND, I am not sure I want to offer employees what is typical of say a Fortune 500 company. Not that you are saying this. More that my HOA is a nonprofit. I tend to feel if the person really wants this education, then she or he can dine cheap, paying roughly what they would pay if they were at home. The mileage rate is helpful. Thank you.

Thanks to all for the reality check.

Augustin,

Many years ago I worked for the community college district for a time and then several years after that for state government. In both entities I found that the number one management perk was traveling to various seminars at employer expense. I never once detected any benefit to the employer.

That said, I would give your manager the benefit of the doubt and presume that the arrangements she made with the previous board were done in good faith. Wish her well.

At the next board meeting, however, you should propose putting the brakes on these kinds of trips permanently.