ScottF3 (Michigan)
Posts: 10
Posts: 10
Posted:
Searched for some info on this but couldn't find anything. I'm worried about where things will lead, and what we can do to rectify our situation. First, the background.
Our HOA recently elected a new BOD for our 39-home community. The BOD the past few years has not been very transparent in their dealings with regards to finances and meetings. I'm more worried about the finances part as I am the new treasurer. I've done a quick review of our bank statements, and see some minor cash withdrawals with no receipts (RED FLAG) and lots of debit card transactions with no receipts. Those worry me some, but what has also happened is, no budget was ever given to dictate spending, and the board spent more than they should have on things like parties. Our dues are $120 annually per household (roughly $4.680/year intake) as we have a small common area at the entrance to maintain and the rest of the common areas are between homes so nothing is there. We just need to maintain insurance on them. The previous board has spent on average $800/year on a golf outing, $1000+ per year on the summer block party, and $200+ per year on an Easter party. These were paid for by the debit card by the president with nobody on the board raising an objection to the spending. Additionally, there's been over $2000 spent on lawyer fees that were through the personal email of the president so the new board has nothing about what was discussed or any documents that were given to the previous board. Finally, the previous board had decided that the officers should not pay dues while serving on the BOD, but nothing was relayed to the co-owners. The former treasurer would issue invoices for all co-owners, including the BOD, but then create credit memos to offset the dues that were owed by the BOD. As a side note, our by-laws do state that the BOD is not to be compensated for their work on the BOD.
What I am worried about is if the co-owners can come after the new BOD personally for any of the financial misdeeds of the previous board. The check signing privileges have not changed yet as we are in the process of moving banks. One co-owner is requesting an audit, which I can completely understand, but want to know if I need to protect myself personally, and if I should advise the other new BOD members to do the same. I might be blowing this out of proportion, but just want someone that might have more knowledge than me to help me out. Any help would be greatly appreciated. Thanks everyone!
Our HOA recently elected a new BOD for our 39-home community. The BOD the past few years has not been very transparent in their dealings with regards to finances and meetings. I'm more worried about the finances part as I am the new treasurer. I've done a quick review of our bank statements, and see some minor cash withdrawals with no receipts (RED FLAG) and lots of debit card transactions with no receipts. Those worry me some, but what has also happened is, no budget was ever given to dictate spending, and the board spent more than they should have on things like parties. Our dues are $120 annually per household (roughly $4.680/year intake) as we have a small common area at the entrance to maintain and the rest of the common areas are between homes so nothing is there. We just need to maintain insurance on them. The previous board has spent on average $800/year on a golf outing, $1000+ per year on the summer block party, and $200+ per year on an Easter party. These were paid for by the debit card by the president with nobody on the board raising an objection to the spending. Additionally, there's been over $2000 spent on lawyer fees that were through the personal email of the president so the new board has nothing about what was discussed or any documents that were given to the previous board. Finally, the previous board had decided that the officers should not pay dues while serving on the BOD, but nothing was relayed to the co-owners. The former treasurer would issue invoices for all co-owners, including the BOD, but then create credit memos to offset the dues that were owed by the BOD. As a side note, our by-laws do state that the BOD is not to be compensated for their work on the BOD.
What I am worried about is if the co-owners can come after the new BOD personally for any of the financial misdeeds of the previous board. The check signing privileges have not changed yet as we are in the process of moving banks. One co-owner is requesting an audit, which I can completely understand, but want to know if I need to protect myself personally, and if I should advise the other new BOD members to do the same. I might be blowing this out of proportion, but just want someone that might have more knowledge than me to help me out. Any help would be greatly appreciated. Thanks everyone!
