Expense approved by previous board without any documentation in minutes

Started by IndieS • 5 replies • 1167 views

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IndieS (Colorado)
Posts: 79

Posted:

It seems that my little HOA and BofD ends up with groupings of problems, then runs silent and deep for months.

We have a new board since early 2017 -- only one member remains from the old board. She was a Secretary, but no longer.

We have just discovered that the old board agreed to pay for a legal consultation prior to the election of the new board. They had evidently had an executive meeting, but after they came out of the meeting and voted, the Secretary did not create minutes or have them approved.

So the legal expense, which was paid before the new board was seated, has no documentation of approval. We have only the invoice and cancelled check for the payment.

Do we ask the old board to recreate minutes for the results of the executive session, or does the new Board somehow address this and indicate the expense was presumably approved by the previous board? The old Secretary claims that the decision was unanimous, but continues to nurse hurt feelings because she lost her beloved Secretarial job and claims it is no longer her problem.

TIA

SheliaH (Indiana)
Posts: 6,964

Posted:

Since the secretary can't/won't come up with the minutes, you need to go to the rest of the previous board (everyone ) and ask why the legal consultation was done. Executive session minutes should only be given to board members, so you may need to hold another one, call in all previous board members and talk to them and then make minutes of that meeting. Remember, meeting minutes are summaries and record board actions, not a blow by blow of who said what.

By the way, tell the secretary that this IS her problem because meeting minutes are official Association records and when stuff is missing that could come and bite the Association in the behind, the first people to blame are the board members who were running the show at the time. Maybe what she needs is a rebuke of sorts from the current board regarding her bad attitude - then let's see how she feels.

If someone does have notes from that meeting and all the former board members agree that's an accurate statement of what went on, you may be able to create minutes, but it should be noted when and why these were made and ALL those board members should sign off on them. However, I wouldn't do that without talking to the association attorney because board meeting minutes are official association records (although executive session minutes aren't distributed to homeowners.) In fact, go ahead and talk to the attorney first and then proceed. Whatever you do, remember that executive sessions should be RARE.

To keep this from happening again, check your documents to see if they address executive sessions - if not, your attorney can work with you in setting up some guidelines that you can approve as a formal board resolution. You could also propose an amendment to your bylaws that will address when they should be used.

Here's a link I found from the North Carolina United Way on how it addresses executive sessions - you might be able to adapt some of this to your HOA.

http://www.unitedwaync.org/sites/uwncarolina.oneeach.org/files/filedepot/incoming/Executive%20Sessions.pdf

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

IndieS (Colorado)
Posts: 79

Posted:

Thanks so much!

JanetB2 (Colorado)
Posts: 4,219

Posted:

You might remind the previous Secretary of their "FUDICIARY" responsibility. If a member files a lawsuit and there were not proper minutes from an individual who had the ultimate "legal" responsibility of providing said minutes. That is their potential "persoanal" fault. Depending on circumstances they could be held "personally" liable by a Court of Law.

IndieS (Colorado)
Posts: 79

Posted:

Thanks Janet! I wish you were on our BofD, as I could definitely use your help!

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By IndieS on 08/14/2017 1:37 PM
Thanks Janet! I wish you were on our BofD, as I could definitely use your help!

LOL ... You have my help here

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