Treasurer reimbursed for mileage

The former treasurer (I will refer to him as "her") submitted a mileage sheet and wrote herself a check for the reimbursement. I believe this would normally be allowable per FS 720.303(12)(b), which lists as an exception to the prohibition against compensation of directors, officers and committee members:

Reimbursement for out-of-pocket expenses incurred by such person on behalf of the association, subject to approval in accordance with procedures established by the association’s governing documents or, in the absence of such procedures, in accordance with an approval process established by the board.

In our case, there were no such written procedures established. When an officer spends money on something for the HOA, he simply submits the receipt and request for reimbursement to the treasurer.

However, it has come out that the mileage claim might have been spurious. While the treasurer was indeed picking up the supplies needed by the committee of which she was a member, the branch of the store at which they were purchased was quite a long way from the community. Specifically, it was in the same town where the treasurer used to live before leaving her spouse who still lives there while the divorce is ongoing. There are a couple branches of the store much closer to the community. So the possibility exists that she would have had to make that trip anyways to take care of personal issues.

So, while it seems fishy, does it rise to the level of extortion? The amount was $150 (260 mi.).

Its stealing, but not on a criminal level. She is gaming the system.

If I was on the board I would deny the reimbursement and demand repayment. I would then make policy on how mileage is reimbursed and how it is approved before checks are written.

I’m the treasurer of a group. If I submit a reimbursement form to be paid to myself, there has to be another signature on the form.

The whole story seems suspicious, especially if the same store branch was closer. But we aren’t hearing the other side if the story.

This is exactly correct.

The reimbursement should have been approved by at least a majority of the other directors.

My questions are: Is there a policy now? Or is there a meeting scheduled to establish a policy?

IMO, you've learned that you need one. Ok, do it.

Some corporations have a shake-up at least once per decade. Someone in accounting finds out that there's a new way to game the system. So the rules get changed.

Don't waste your time going after someone who didn't have clear cut directives about charging costs to the HOA.

This was discovered because former board members made a record access request and inspected the financials. I'm in my second month of directorship so there has not been time for creating new rules and procedures. But it's on my list.

I agree entirely with NpS: "Don't waste your time going after someone who didn't have clear cut directives about charging costs to the HOA."

Instead, spend your time reading about your obligations to your HOA as a director. There's a lot to learn about current topics and issues vs. old ones. But perhaps your HOA is very small with a tiny budget? If so, I can see where the $50 might matter.

They were on the board prior to 2019. Most of them chose not to run for reelection. The 2019 board that was elected was down to 3 members (from 5), one member of the 2018 board and two write-in candidates. In April the then-president resigned due to incompatibility with the other two. Sometime in May they asked me to fill the seat and I agreed. It took until June before they called a meeting in which I would be appointed. It was during that meeting that the former board members who had made the record access request shared some of their findings, including failure to assess late fees in a few instances, and this mileage reimbursement which they claimed was illegal for directors to be reimbursed for. The treasurer resigned and walked out of the meeting, leaving the weak president and me to face the crowd that was after his blood too. The following day he resigned.
The following week I had found a couple volunteers and appointed them to the board, holding a special meeting to ratify the unanimous consent forms I had used to appoint them. It did not take long for the crowd to start asking when I was planning to collect those late fees that had been waived by the former treasurer, as well as demand the return of the mileage reimbursement. I declined to do either.
In the first meeting, they were ready to ambush me telling me that the selective enforcement made it impossible to collect late fees in the future, illustrating the slippery slope by threatening not to pay their maintenance fees for a few months. I don't believe that. Someone would have to be willing to risk a foreclosure and spend thousands of dollars taking us to court on the off-chance that they could convince a judge or jury that they were the victim of selective enforcement. All to avoid paying a $25 late fee? I don't believe it will happen.

small self-managed 48-townhouse HOA

Which of my comments made it sound larger?

The bailout at the end of 2018 was due to burnout, with a couple having served several years. Another sold her townhouse and was in the process of moving. Another thought it was too much work and pushed through a budget to include hiring a management company. A group of homeowners opposed to paying for a management company initiated a write-in campaign to elect the two new members who were also opposed. That worked. We are still self-managed but their incompetence has created many headaches for me.

The treasurer should be reimbursed for the mileage between her previous home and the store in question. The HOA should not fund her choice to drive so many miles when other chains are more convenient and reflect common sense.

The HOA funded the gas for her optional, out-of-town trip.

I don't think the lack of a policy indicates acceptance of the Treasurer's poor business decision to fund personal travel. The HOA needs a partial/majority refund of that trip. This was a great "catch" by the other board member.

I don't think so, but that would depend on the nature of the mistakes and if there are any ongoing and negative reprecussions. Would it be proper to fix the mistakes of the past? I can also see where that might be the right thing to do (again, it depends), but I don't think it rises to the level of fiduciary duty.

In corporate law, there is a concept called "implied authority." If someone, acting in good faith, relies on an officer's implied authority, even though he doesn't actually have that authority, then she shouldn't be disadvantaged by it.

everyday there is someone in the news who volunteered to handle money and now being prosecuted. hoa officials, private club officials, union officials, etc. and then there are those who are never caught or are clever enough to evade detection.

be aware of what is going on...... at all times

Bob,
That is why a audit needs to be done asap. Because she resigned does not mean she can't be prosecuted if your HOA is missing funds.

Bob,
Yes if the same people look you get the same results. An independent auditor is not nearly as expensive as you might think. We did a Forensic Audit in Ca. (Deep Dive) a few years ago and if my memory serves me correctly it was less than 4K and that was for a 1 million annual budget and expenses.

I just worry that if people will cheat on little things they may have done it on larger items. Maybe I watch to much American Greed but it happens all the time.