Tea Party with H.O.A. funds

Goodness
If only more hoas spent money on social events! Totally legit to spend on social events why would it not be?

It is a running argument about association money spent on social events. There are two schools of thought:

1. It is not a association expense and should not be funded by the association.

2. Social events make for a more cohesive association thus worth the expense.

Take your pick.

If you HOA has a written policy that the prez can spend HOA petty case anyway he wishes, it's OK. If no such policy exists, he definitely "want rogue." He should have placed this matter on an open meeting agenda for board discussion and vote.

On this forum we'v seen quite a few examples of presidents who make themselves the decision-makers. IF board voted to give the president such power they are making a big mistake.

In CA, and I think most states, non-profits are governed by boards, not officers. Is NC an exception, Mark? Is SC, JohnC?

Why do you always double post?

May also be a hardware/keyboard issue. Sometimes I click Submit and don't see the rotating circle indicating that my browser is thinking about it, so I hit Submit again - and both posts show up.

Personally I think it's just computers softening up us humans for the day when they take over completely. (Don't get me started on auto-correct.)

Kerry,

On the double post issue, I wonder if after you click submit you do not wait long enough for the post to send. I have done that but I have found if I wait a bit, it goes with one click on submit.

Sometimes my aging fingers get away from me as well.

Pretty sure it's my fault for not waiting long enough before I click 2x.

I'm much more embarrassed that I assumed the prez is a man! But if a woman, and there's no policy that the president can spend "petty cash" or other HOA funds, it somehow seems worse.

The O.P's post is about whether the HOA can spend funds on parties, this post is about the authority of the president.

What size is your HOA, William?

When we've had these discussions in the past, we pretty much agreed that self-funded social events are a reasonable compromise.

I think that unless an association's CC&Rs specifically reference social events as an appropriate use of funds - and some of them do - then people can always argue that the board is spending money on things they shouldn't *and* they're doing so to benefit a minority of owners at others' expense. This isn't like having amenities such as a pool that only some people use, since buyers know ahead of time what they're getting into.

On a practical level, social events in the absence of relevant language in the CC&Rs can make it harder for the board to justify raising assessments. "You've got the money, stop spending it on frivolous stuff," say the homeowners. And they're not wrong.

And things like this can raise eyebrows, as it has done in this case. Questions about a board's decisions and ethics can come up even without evidence of wrongdoing - why raise these questions if you don't have to?

So even if the board president didn't actually do anything wrong - and that's open to debate - it still isn't a smart decision.

Thanks you, Lisa. along with double-posting I also am a bad typist. I meant To say in my last post that the question on this thread is about the president's authority. I also think that the prez must have the Board approve such an expenditure at an open meeting.

(Can't be done online in CA)

What size is your HOA, William? What size is the Board? Does the president make other decisions too without Board approval.?

We have a Social Committee. They have spending authorization in their charter. No one else my may spend their funds. We also have a Contingency line item in our budget. It's specifically for unexpected expenses. If the president wanted a tea party, S/he'd need to have the board vote on where the funds for such an event would come from. The same applies to expenditures from "petty cash" if we had one.

I do not agree that the president has the authority to expense funds from any budget line item just because they feel like they want to. Or a group of owners lobby the prez for $$. Note my exception way above--if there's written board-approved authorization the prez may use pretty cash, then fine, but that raises other issues.

It's obvious that a "tea party" could cost $50 to $300 depending on the size of the HOA. Btw, "tea party" sounds so odd in the many parts of CA where I've lived..

I agree with you, Jon. And the OP wrote it's specifically a "Ladies Tea Party."

Anything can be done with transparent budgeting and transparent communication about how funds may be spent. It's certainly worth discussing in a business meeting. I wish my HOA budget could absorb community-focused event funding be we have too many short-term bills and too many long-term obligations.

IF the HOA board is labeling a fund as "Petty Cash," then I'd say a tea party falls under "petty cash" definitions. That's why it's called petty cash. It's highly fluid and an inconsequential pot of money if it's budgeted that way.

While I was on a board, we have several committees, one being a social committee, the other a finance committee. Each presented a calendar of events, each with a specific budget. We had at least 12 events per year. The budgets for all committees were approved by the boards each Octobers and the chairperson would request the fund for a specific event from the management company. There was no board approval needed as it had already been approved in October. Budgets were always sent out in December, as required in California, and the itemized budget for the social committee was also included. No one ever had an issue. The documents were also posted on our website.

So, to answer Kerry's question, if the expenditure was included in the budget and approved by the board, no further approval is needed.

Everyone here is making off the wall assumptions, yet the OP has only posted once.

We also had an executive committee consisting of two board members who ran the day-to-day operation with spending authority of up to $1500.00 for emergency or maintenance issues.

Please point out where the OP stated it wasn't in the annual budget. Also, how does William know it was not board approved. Maybe he missed a meeting. If there are receipts presented, it's not illegal. If William and the rest of the board have an issue, they have the option to replace the president, IF, anyone is willing to step up.

The OP stated clearly that the funds solely come from "petty cash." I don't think there are line items within petty cash, Max. And how would receipts make the expenditure OK?

All along, my point was it SEEMS the president exceeded their authority. William is on the board, I do think he'd read the minutes if he missed a meeting when the expenditure was approved.

IMO, if the president just acted on this without board approval, chances are pretty good the president also acts in other ways without board approval. Presidents should never be allowed to do whatever they wish. I've see too many abiusive presidents described on this forum and in real life.