new president, funds dispursed without proper approval

Just became president and have discovered that funds have been dispursed from a capital trust account without vote by unit owners as written in the trust document.

Funds were used for capital improvements and no impropriety is evident,do I have a moral obligation to notify the unit owners and get there approval?

I'm assuming this didn't happen on your watch.

I think the bigger question is, if the money has been spent, what do you propose to do if you don't get their approval?

Maybe there was not approval from the unit owners, but somewhere, there must be a paper trail by the board. See if you can find minutes of the meetings where there was a decision to use these funds. Can a former board member help you out?

I agree with others; no need to stir up things after the fact. The board should see about its obligation to reimburse the original fund, if it is needed.

I would disagree with the "sweep under the rug" responses...While you can't change what happened as head of your HOA you have an obligation to inform the membership of what happened and a plan of action to reimburse the account if that is what is decided. I wouldn't want to be the president who got confronted with this information and accused of covering up.

If this capital trust account is in essence, a reserve account, I know that in California, the monies must be replaced within 12 months. Capital improvements generally are not funded by a reserve account, but rather an increase in assessments, or a special assessment altogether.

You don't sweep under the rug what was a public action, no matter that it was handled improperly. The people who benefited, the community, can kick in extra assessments to replenish their capital expense trust. Yeah, they'll do that to punish themselves.

As a new president, I would not go rehash past boards and would not try to explain something of which I cannot have the full picture. Either option of communication is suitable to me but the new president is not and cannot be held complicit for past boards' actions, especially in this case. If a new board has a flair for drama, call a meeting, explain the situation as best possible, have no one in the room who'll fully explain why and what was going on and then move to your business at hand. Sweeping under the rug is the willful suppression of negligent behavior. This president noted some, admitted, ignorant board moves but nothing illegal and nothing that would generate community outrage. It isn't there.

Where harm is done, address it. Fight negligence at all costs. Never assume that an apathetic HOA community will fully grasp what it being said, be as "concerned" as one board member or even attribute the trouble to its rightful people.

I can tell you this new president will create problems for insisting on some sort of assessment or dues increase using past board's ignorant handling of money that hasn't contributed to HOA decline or inefficiency in the name of restoring capital/reserve funds.

But, fully disclose the past issue instead of making a policy clarification for capital trust fund expenses going forward. One approach is regressive and another corrects a wayward path and sets the tone for more-astute handling of HOA affairs.

how and when do you explain shortfalls in this trust fund then?

I wonder if the membership doesn't know already? It would seem if a major capital improvement was done, people would ask questions. I can't imagine it NOT upsetting the apple cart at one point. It doesn't appear there is an issue to reveal as the mistake may have lied in it NOT being a board vote but a general membership vote. Which the board are members of the HOA and represent the general membership.

I say move on and just don't make the same mistake in the future....