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Subject: Board has lunch on the HOA...literally
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JenC1


Posts:0


11/17/2008 6:54 AM  
What do you think of the volunteer boards of an HOA having dinner out "on the HOA"? The dinner is at the end of the year, and I'm told is paid with "leftover funds". I didn't go last year, b/c morally I thought it was wrong. This year, I am thinking going and paying for my own dinner at the end of the evening, to make a point. But I'm actually concerned about even attending something like this. As far as I know, no one in the community knows this goes on. I have made myself the designated whistle-blower (for better and for worse), and have to pick my battles wisely.

Any thoughts? I cannot imagine that this is even legal to use homeowners' funds this way.
RogerB
(Colorado)

Posts:5067


11/17/2008 7:29 AM  
Jen, a few HOA Boards have meetings with a meal provided for various reasons. I see nothing illegal about doing this. Perhaps this perk gets members to volunteer to serve on the Board. If you don't want to attend then don't. I would consider asking the Board to disclose this information to the members rather than being a whistle-blower.
HeatherJ1
(South Carolina)

Posts:89


11/17/2008 7:34 AM  
I would think it has to be disclosed to the members and then it's not illegal (but I have no clue on the legal aspect... just guessing). But, if it happens every single year, maybe the budget isn't high enough and should be revised. You could decrease the HOA dues. Or, the extra could be put into the reserve funds.
BruceF1
(Connecticut)

Posts:2535


11/17/2008 7:44 AM  
Jen,

There may not be anything illegal about it, but I certainly don't think it's a good idea, especially if homeowners don't know about it.

There may be something in your documents or state laws about board members receiving compensation. It may be permitted or it may be prohibited. You'd have to read the documents to see. If compensation for board members is prohibited, then IMO going to dinner is a form of compensation and would not be legal.

Even if compensation for board members is legal, IMO it is not legal for board members to spend any association money for anything without a vote of the board and that vote appearing in the minutes. The cost may not have to appear as a line item in the budget (if it's small enough it could be included under miscellaneous), but it should appear somewhere. For example, the board could pass a resolution authorizing the expenditure of an amount not to exceed $XXX for a year-end dinner for the board members, and that resolution should appear in the minutes. Assuming compensation is legal, then if they get a lot of flack from the homeowners, maybe they should stop doing it.
DonnaS
(Tennessee)

Posts:5671


11/17/2008 7:48 AM  

Heather,
Are those funds listed on the annual budget? How is it listed? As leftover funds, I as an association member would not like seeing it presented that way.
The membership should be made aware that funds are being used that way and it should show up on the budget. I do have some problems with only the Board getting the rewards as there are committees and other members who might be entitled to the same perks.
MaryN3
(Virginia)

Posts:8


11/17/2008 7:53 AM  
Check out your covenants..ours state that the fees can only be used for road repair and maintenance..we've challenged and won..board members were even buying birthday cakes for each other..it was a very small part of our court case..but the judge in both District and Circuit courts have ruled..the covenants, at least in our case, were very explicit.
MaryN3
MaryA1


Posts:0


11/17/2008 10:32 AM  
Jen,

I don't believe this would be considered illegal, but I do believe it's a bit unethical. Especially if it is being done w/o the knowledge of the members. Board of members of HOAs are generally nonpaid volunteers and using assn funds in this way makes it appear as a "compensation" for their services. And, as another poster observed, it may be a violation of the assn gov. docs. Some docs state explicitely what the assessments are to be used for and treating board members to a dinner out is not included!
JeanneK3
(Maryland)

Posts:562


11/17/2008 10:39 AM  
It is unethical for a Board to spend money on a dinner or anything else without informing the community. First suggest to the Board they might want to announce this use of money to the community. If there is no community objection then they don't have a problem. However, one has to wonder if there are other examples of money being used under the radar. Openness is always the best policy.
MicheleD
(Kentucky)

Posts:4491


11/17/2008 10:45 AM  
Great answer, guys, especially Bruce.

In our community, it would be an ethical breach, at best.

Our docs do not allow for compensation. And if people feel like their level of volunteerism should garner some sort of "recognition" or stroking through a holiday meal or something, then I think they need to reconsider both their definition of "volunteer" AND their purposes for donating their time and talent on the board as a volunteer.

Our board goes out of its way to ensure that NO board member has even the appearance of special favors or "compensatory" actions, much less to ensure that there is no perception that the entire board is somehow benefiting in any way, shape, or form from their individual board membership.

And there's the key: appearances and perceptions.

If it even gives the perception that the board is getting something for nothing, or enjoying some benefit to which the entire membership is not entitled, then it needs to be shut down.

On the other hand, if the docs allow for it and if this is something that is presented to the entire membership, and the entire membership votes that they will allow to "treat" the board volunteers to one dinner a year in recognition of their tireless work for the community, then go for it.

SusanW1
(Michigan)

Posts:5202


11/17/2008 12:37 PM  
H-m-m - Some budgets allow for "Volunteer Development" or other social or goodwill expenditures. As a member, I guess I wouldn't have objection paying for dinner when they are in a work session or late meeting or attending a meeting during treavel, but to just "take themselves out for dinner" doesn't set well with me.

Depends, too, on just "where" they went out to dinner!
AnnaD2
(Florida)

Posts:948


11/17/2008 2:58 PM  
I spend enough time with my fellow board members all year long. I like them, but I certainly don't want to socialize (privately) with them and certainly not on my neighbors' dimes.
JenC1


Posts:0


11/17/2008 6:26 PM  
Thanks for all the responses. Anna, that is exactly the way I feel.

I forget who mentioned this (I think a number of people), but I am going to follow through with the idea of asking at the meeting if this is in the budget or "left over money", and if the community as a whole knows about this expenditure. I know they do not...i didn't know until I volunteered for the board.

SusanW1
(Michigan)

Posts:5202


11/17/2008 6:47 PM  
Jen - how much are we talking about here?

What is your annual budget?

Instead of getting rid of this gesture, try to at least get a limit on the amount spent. This sounds like it's been a tradition for a long time.

What do the Members think?
RobertR1
(South Carolina)

Posts:5164


11/18/2008 6:03 AM  
Will someoneplease explain to me how it is right to feed the Board or anyone else or provide them with "Perks", I think the word was, and it is not right for the noard to pay the grocery bill of every house number ending in 6. Now you know that is nonsensical. What kind of a Board member would you have if he can be bought with a dinner. You might as well slip him a c note at the dinner table.
Next, I will hear Board members are worth so much/year or month and if you are a special Board Member you can get a Golden Parachute. And it seems I recall recently that an association provided a few Board members with free housing and meals for about 20 years somewhere in Florida.

DavidW5
(North Carolina)

Posts:565


11/18/2008 8:09 AM  
If a quorum of the board is present at this meal, then it constitutes an official meeting of the board and must be announced to and open to all members of the association. If that were the case, I doubt the association budget would be used to pay for everyone's dinner. This practice should not be allowed to continue.
JonD1


Posts:0


11/18/2008 11:26 AM  
Jen:


First I would agree with Roger. What would make this "illegal" in your mind?

If you don't agree then as suggested do not attend. Because it offends your sensibility that doesn't mean the remainder of the Board is a bunch of crooks.

And as Susan W asked what is the amount of money we are discussing?

Is it even worth discussing?

Did they have dinner or dine at a 5 Star establishment?

Perhaps this might be a way of thanking those serving on the Board for their service? Perhaps after looking over your property and investment for the previous year it would be a SMALL gesture to foot the bill for dinner?

We "gift" several service providers on our property. Post office, garbage removal, and maintenance staff in an effort to thank them in a small way for their services over the year. Maybe if they are "worthy" of this gesture someone who manages your largest asset might deserve a $20 meal?

Maybe a token effort to show some appreciation for those who volunteer their time from those who don't have the time, just might not be a bad thing.

JenC1


Posts:0


11/18/2008 11:57 AM  
The reason I was thinking it may be illegal is that we are using members' funds (without their knowledge) for something they are not privy to attend. It's not feasible for our HOA to invite the entire community of 2,000+ units either.




AnnaD2
(Florida)

Posts:948


11/18/2008 12:53 PM  
JenC...if it's a secret the board is making themselves look very suspicious. I'd certainly discuss it at a meeting and make certain it's recorded in the minutes. If any board members have a problem with disclosing that information they'd start to look pretty guilty of "hiding" something. If its not in the budget (as a line-item) and if there are no minutes from previous meetings showing approval of this then it's WRONG. I'd not be a party to it.

JonD--we (board members) receive "token" gifts of appreciation from members all the time. Thank you notes; baked good; movie tickets; gift cards; etc. But they come from individuals who wish to show their appreciation. I would never DREAM of taking the Association Members' money for a "private" meal. If it's not approved by the entire membership it's THEFT.

JonD1


Posts:0


11/18/2008 1:03 PM  
So now these people are guilty of "theft"?


Gratitude for their work on your behalf.

Over a meal this makes them thieves................
MicheleD
(Kentucky)

Posts:4491


11/18/2008 1:17 PM  
Posted By JonD1 on 11/18/2008 1:03 PM
So now these people are guilty of "theft"?


Gratitude for their work on your behalf.

Over a meal this makes them thieves................





PROVIDING ONESELF a treat equals "association gratitude"?!? Since when? Maybe if the membership were snarfing together some pennies and presenting the fundraising to the board for them to go grab a meal on their dime, I might agree with you.


Theft, misappropriation of funds, embezzlement, fraud, swindling, among many other potential synonyms.

I suppose it really depends on the amount and how long they've been doing it.

Just because ALL of the board is participating doesn't make it any less unethical than if ONE member of the board decided to "treat" herself for her "noble volunteerism."

AnnaD2
(Florida)

Posts:948


11/18/2008 2:26 PM  
Very well said, Michelle.
RobertR1
(South Carolina)

Posts:5164


11/18/2008 3:46 PM  
Of course, this is also one of the prime reasons the Boards should have term limits. Along those lines, it is not unusual to have term limits for directors but we insist in feeding the same management company/manager year after year after year. We are a funny people. Captains' of ships in the Navy are usually on a two year tour and everyone accepts the turnover, but how many times have you heard, "Oh no, we can't replace the manager." One explanation is, "The devil you get may be worse than the devil we got." How's that for logic?
JosephW
(Michigan)

Posts:882


11/18/2008 5:17 PM  
It's been interesting following this thread over the past few days - it sort of follows what's been happening in the country. When I managed associations back in the '70's, every board of the 40 or so we managed got a free dinner on the association at the end of their year in office. It was part of the budget, and if an owner raised a question about it, another owner would quickly point out that it was a way of saying "thank you" for doing a job that he or she wasn't willing to do at that time. The board never had to defend it.

But we've become more divisive and suspicious over the years and the thought of thanking someone for volunteering their time in community associations has become an anathema to others who see any sort of benefit to them as self-serving. I know there are boards or board members who don't deserve anything, and I know there are associations who can't afford it, but when it is earned, it would be nice if owners found a way to say thank you, even if it was just a note in a card.

I'm not disagreeing with anyone's opinion here, I guess I just find it kind of sad that we now seem to find more ways to attack than to unite, and that something that once was a nice gesture, is now often seen as something wrong.

By the way, if they're not discussing association business, it's not a meeting. They're allowed to meet socially without notice and agenda.

Joe

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SusannaM
(Florida)

Posts:366


11/18/2008 5:55 PM  
Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics.......
KirkW1
(Texas)

Posts:1665


11/18/2008 6:10 PM  
Wow, I am glad that the government doesn't view income the way some on this board do. For instance, while there are rules specifically against the use of ham radio for profit the FCC has (fortunately) stated that receiving a t-shirt and/or a meal does not count as compensation.

I would say though that as a Board member, I would be more likely to vote for providing a meal in conjunction with a meeting where business is conducted. I would also be more inclined to vote for a meal recognizing all volunteers then just the Board.

As for the disclosure issue, I suppose I wonder how much was paid. I don't think it need to be put as a separate line item unless the expense is significant. And significant (in my opinion) will vary with the level of dues being paid. (For instance spending $200 on a meal when dues bring in $1000 a year is significant. But for an association that collects more then a million dollars a year it just wouldn't be seen.)
MicheleD
(Kentucky)

Posts:4491


11/18/2008 6:38 PM  
Posted By SusannaM on 11/18/2008 5:55 PM
Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics.......





. . . once again, "thanks, mom."
DwightT
(Idaho)

Posts:664


11/18/2008 7:09 PM  
Posted By SusannaM on 11/18/2008 5:55 PM
Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics.......



Or just some people who refuse to accept that others may have opinions that differ from their own. Doesn't mean those opinions are wrong. Just different.
RobertR1
(South Carolina)

Posts:5164


11/18/2008 7:36 PM  
Susanna,
I really can't say I qould label any posting here regular as a "fanatic." Also agree as most point out we issue opinions.

This is not relevant, juat a event in my daily life. I belong to the non-equity club here on the island owned by developer. They hold a Club Asvisory Board meeting and have open session for member to talk. The meeting was and is help in a large room over club restaurant. Board consist of volunteer members and resort management appointees. Big horseshoe table. and guests are seated at open end of table. During the meeting the restaurant staff is serving lunch to Board members and in the open area of Horseshoe there is a table set up with ice water on it. Got all that? Try formulating a complaint to a developer heavy board and watch them and the rest of the Board members chomp on BLT, fries and a salad. Then make some remark with their mouth full. They defend this protocol by saying they should get a little free lunch because they volunteer.
People are really strange and do strange thoughtless acts, much to their detriment.

I honestly would not mind going up against any that post here. And several, I know I might not agree with but they would give you a fair shake. How many of us have won every battle?
JonD1


Posts:0


11/18/2008 9:13 PM  
JosephW:

I could not agree with you more.

We have nine Board members out of 132 unit owners. At times you have to beg people to get them to serve on the Board to protect their own property.

We attend at minimum 13 meetings, we attend seminars, just tonight I met with our VP and Treasurer for several hours to draft a notice going out to the unit owners, if you are more than a "once a month" Board member the time and effort required to do your job properly can be quite demanding.

One point Board members are also owners and members they don't give up that position when they join the Board. Seems like some like to put the Board members in some other group.

And in the case mentioned we have a Board that goes to dinner and some of those commenting make accusations of theft or other criminal actions. Perhaps they lack any understanding of the laws or what is criminal versus what they disagree with.

Someone volunteers their time to oversee your most valuable asset and you then begrudge them a meal. Gratitude and appreciation where has that gone?

In my world if someone worked to protect my property to the best of their ability and did in fact an acceptable job in the event they had dinner on me I would offer them a sincere thank you and go on my way hoping they would continue to do so in the future. I certainly would not label them thieves....





MicheleD
(Kentucky)

Posts:4491


11/18/2008 9:31 PM  
Sorry you feel that way, but rationalization doesn't make the bottom line any less palatable.

The fact is, there is the potential that they are using HOA funds improperly and for their own benefit.

And it's possible that there is no formal or official record of it.

If I were to take it upon myself to buy myself a very nice wreath for my door with HOA money, because, well, I worked hard all year for the HOA! And I'd like to have a nice new wreath for my door!

It's not much, maybe $30, so it's probably not even enough to properly "thank me" for the sweat equity I put into this organization. . .

And Donnie, the president, well, he takes all SORTS of grief from the residents throughout the year. He's a real lightening rod for complaints! I think it's a great idea to spring for a new welcome mat for his home.

Shelley, the treasurer, heck get her a keen fountain pen!

All with HOA funds. All without telling anyone. . . all without ASKING first if the residents would like to thank the board in this manner.

I just can't see that this isn't somehow unethical at best, potentially illegal at worst.

Board members just CAN'T redirect HOA funds for ANY purpose in ANY amount outside of what is approved or directed in their documents.

ESPECIALLY if the docs state "no compensation."

I realize on that Giant Ethics Continuum In The Sky, a holiday dinner once a year on someone else's dime isn't a huge blip. . . but still. . .

Again, THANKING volunteers is one thing, and if the HOA wants to do it, it should be formalized and come from the residents to the board.

THANKING oneself, with someone else's money, without permission, just isn't kosher.

KirkW1
(Texas)

Posts:1665


11/22/2008 6:18 PM  
Michelle,

Not all organizations are dysfunctional like your own. And while I don't feel the HOA owes me anything for my volunteer time. But I don't consider a meal to be compensation. Nor does the federal government. The IRS would not ask you to report such as income.

As for the reporting of the expense, it certainly needs to be in the budget somewhere. It should simply be included in the most appropriate category for expenses. I do not believe for one moment that your organization actually reports the number of pens and sheets of paper purchased to the ownership. They report the amount spent on office supplies. If the number seems high then it will raise some questions. (Though from your posts I would guess that need not be much more then $5 a year to trigger questions.)
MicheleD
(Kentucky)

Posts:4491


11/22/2008 6:41 PM  
Posted By KirkW1 on 11/22/2008 6:18 PM
Michelle,

Not all organizations are dysfunctional like your own. And while I don't feel the HOA owes me anything for my volunteer time. But I don't consider a meal to be compensation. Nor does the federal government. The IRS would not ask you to report such as income.

As for the reporting of the expense, it certainly needs to be in the budget somewhere. It should simply be included in the most appropriate category for expenses. I do not believe for one moment that your organization actually reports the number of pens and sheets of paper purchased to the ownership. They report the amount spent on office supplies. If the number seems high then it will raise some questions. (Though from your posts I would guess that need not be much more then $5 a year to trigger questions.)





With all due respect, Kirk (and you can assess how much THAT is...) MY board is NOT dysfunctional and I have no idea why you would imply something as ugly as that.

The "examples" I listed were not real, but were examples of greedy jerks deciding to buy themselves "stuff" because they "work hard." Those people don't exist. Think of it as a "parable." Besides, do you have any clue how much a nice fountain pen costs? I have several 'low-end' ones that are $80, $90 and more.

I was not using examples of people reimbursing themselves for OFFICE SUPPLIES, which, if done PROPERLY and LEGALLY, would require RECEIPTS reflecting the EXPENSE.

I was talking about people deciding on their own that they "deserve" some new "pretties" for all the hard work they do. . . . and using the homeowners' money to get them.

The fact is, using the HOA funds, (or shall I say more accurately: DIVERTING HOA funds) even if it's a small dollar amount, is basically theft if done without the proper approval.

Your board can't just decide on its own that it "deserves" a holiday "thank you" meal.

If the membership votes to allow such a "perk," go for it. I wouldn't mind if ours did, but I would cut my leg off before I actually ASKED them for it!!

And, don't forget, if the "tradition" occurs year after year, then eventually the dollar amount will add up to a number that WILL get some law enforcement attention, or should anyway.

Spending money on yourself that isn't yours is unethical at best, potentially illegal at worst.

If I found out our board had instituted the "tradition" of treating themselves to a "thank you" or "holiday" meal on HOA funds without getting input or approval from the membership, I would definitely raise hell about it.

If they would rationalize away something that is clearly unethical, even something as seemingly innocuous as that, then how can we trust that they won't cut corners in other areas if they feel like it? It speaks volumes about their character, if nothing else.

If you feel you "need" to pay yourself for a "meal" out of HOA funds, without permission, maybe you better re-think your definition of "volunteerism."

KirkW1
(Texas)

Posts:1665


11/22/2008 9:56 PM  
Your board can't just decide on its own that it "deserves" a holiday "thank you" meal.

If the membership votes to allow such a "perk," go for it. I wouldn't mind if ours did, but I would cut my leg off before I actually ASKED them for it!!



Since we are showing "respect", perhaps you should go back and read your bylaws. The Board has the authority to authorize the expenditure of the funds. You may not like or agree with that, but they most certainly do have such authority. I find it amazing how few people grasp the concept that the Board chooses the budget and the Board decides in the end what gets paid.

Again, though I am not likely to vote in favor of such a "perk" for the Board, I would not get upset as a member if I found that it happened. But as things get rolling I do hope that we do something nice such as a dinner for the volunteers as things get rolling. Then again, we are moving toward making more things done by volunteers. Several of us believe that it enhances the sense of community. And the amount we will save on our Christmas display this year would more then pay for a dinner for 20 people or so.
RobertR1
(South Carolina)

Posts:5164


11/22/2008 10:39 PM  
Just to mention, several of us here also feel volunteerism enhances a sense of community, albeit, around here, that only seems to extend to those doing the volunteering. One of our owners spent the whole off season going throught several thousand xmas lights to make them all operable. Several owners spent a few hours putting them up in our courtyard. Dec 1, we will light them and have a little gathering and toast the season. Hot chocolate and cake (all donated), bring your own bottle if desired. I was struck by the comment of the lady that fixed all the lights. "And just think, it did not cost ---------------- a dime. This couple is also going to buy a tree for the display. This all was not done to save the association money, it was done because we volunteered to do the job. In fact, I doubt few absentee owners know this goes on. They don't reply to e-mails, web postings or anything else, and don't mention being on a committee or board. All not atypical situations in associations. I have never canvased the volunteers (some Board members) and asked how these folks would feel if the Board elected to having a working dinner at a local spa and billed the asociation. Another subject entirely.
GlenL
(Ohio)

Posts:5491


11/22/2008 11:11 PM  
Posted By RobertR1 on 11/22/2008 10:39 PM
I have never canvased the volunteers (some Board members) and asked how these folks would feel if the Board elected to having a working dinner at a local spa and billed the asociation. Another subject entirely.



Robert, did your Association get government bailout money like AIG?

Studies show that 5 out of 4 people have problems with fractions
BruceF1
(Connecticut)

Posts:2535


11/23/2008 3:32 AM  
Posted By KirkW1 on 11/22/2008 6:18 PM
But I don't consider a meal to be compensation. Nor does the federal government.



That's not entirely true, at least not as I remember it. The government may not consider a meal as "compensation" in the sense that it may not have to be reported on one's income tax return, but there are circumstances where government workers are sometimes not permitted to receive "free lunches" (literally), even when it's a matter of convenience and not intended as a gift.

Back when I worked for a company that worked on government contracts it was common to conduct periodic design reviews for government representatives to review the progress of the work. The reviews often lasted all day and it was common for lunch (usually salads and sandwiches, cookies, and coffee and soft drinks) to be provided for all participants so that the business of the review could proceed more quickly and efficiently. The lunch was free for the company employees, but the government representatives were not allowed to accept the lunch at no cost. They were required by government regulations to pay for it.
RobertR1
(South Carolina)

Posts:5164


11/23/2008 5:39 AM  
Glen,
How the hell did you find out about that that? It was supposed to be a favor for favors rendered. Anyway it is too late now, the $ has all been spent on establishing a new administration section for our association named: Court of Favor Disbursement. I happen to chair this department because my son used to go to school with the head of Bailout Security Administration.

We have already applied to receive further grant money to form a sub-section of my department. We will have that firmed up after a series of meetings in Hong Kong (have a son there), Bangkok (you know the reason for that), Figi (never been there) and a short ten day working cruise among the Greek Islands. We have forbidden any discusions at all about any notification of our plans as far as our owners are concerned, after all, we were the ones that had the connections to get the money in the first place. Let them eat cake.
TimH1
(Alabama)

Posts:17


11/23/2008 6:53 AM  
Actually, social events do not necessarily qualify as an official meeting, even if a quorum is present, as long as business is not discussed. The fact that the HOA is picking up the tab is of no consequence. This is done all the time by city, county, state and federal lawmakers, and is perfectly legal and not an ethics violation.
RobertR1
(South Carolina)

Posts:5164


11/23/2008 7:12 AM  
Tim,
I am not sure ethics is the prime issue here. The way I read my documents, and I know one size doesn't fit all, NOTHING can be spent unless it is for the upkeep and preservation of the real property. We are a condo and also have a clause , like most, that gives the Board the right to do just about anything they decide on. Hopefully, the members can influence the Board to decide on doing the right things.

Old english poroverb: In for a penny, in for a pound.

Seems relevant to me, in my association.

But we do it, and life goes one, it just doesn't blanket the act in legality.
KirkW1
(Texas)

Posts:1665


11/23/2008 8:23 AM  
Because of the many abuses of the system, the federal government does in fact have very strict laws regarding gifts to its people. And yes, they are not allowed to accept even a free lunch from someone doing business with the government.

And meals can actually be a very interesting situation: If you are traveling and your company reimburses the cost of lunch while on the road, that is income. (Dinner and breakfast are not. The thought being that many people can't eat at home for lunch anyway.) But they can pay a "per diem" that is not taxable after which how you distribute it becomes your issue.

But I find it interesting how an excess such as AIG is imparted on an association that has had a long tradition of holiday dinner for its directors. Many nonprofit organizations due such and thing, but somehow this group is purported to be stealing. Sure wish they could see the dinners often given to directors of other organizations.
RobertR1
(South Carolina)

Posts:5164


11/23/2008 9:46 AM  
Kirk,
Entertainment, promotions, free lunches, hotels, gifts are big business for profit organizations and I would add some non profits do a pretty good job at spending money. But, we are what we are and that is an association that has a mandate to use the funds received for the preservation and health of the whole. Again I say, I don't like it, know enough that I am not going to get everything I want, and live with it. I also will argue for the sake of arguing that there is no place for it in a HOA.
BruceF1
(Connecticut)

Posts:2535


11/23/2008 9:48 AM  
Posted By KirkW1 on 11/23/2008 8:23 AM
If you are traveling and your company reimburses the cost of lunch while on the road, that is income.




Kirk,

Doesn't that contradict what you posted earlier about the government not considering meals as compensation?

Actually, I'm not certain about the IRS considering lunch as taxable income; That's not true in all cases.

IRS Publication 525 defines "De Minimus" benefits provided by a company as non reportable income. De Minimus benefits are typically of such a small value that the company doesn't account for them separately for each employee, such as cab fare home when an employee works overtime, ar a turkey or ham given as a holiday gift (two specific examples mentioned in publication 525), and probably would include a lunch paid for out of petty cash as well. Thus, a buffet lunch provided to a few employees for the convenience of the employer and not accounted for each employee, would not be reportable as income.

Travel expenses are covered under IRS publication 463. All travel expenses directly paid for by the employer (including lunch) are not reportable as income under most circumstances. When the travel expenses are reimbursed by the employer lunch is not reportable as income provided the traveler is required to stay overnight or to obtain rest to perform his/her duties. There were some instances where it's nebulous and lunch may be reportable, but it's not clearly stated in either pub 463 or 525. It's all very complicated (but it's the government, what would one expect?).

But, we're straying from the original subject.
MicheleD
(Kentucky)

Posts:4491


11/23/2008 12:45 PM  
Posted By RobertR1 on 11/22/2008 10:39 PM
Just to mention, several of us here also feel volunteerism enhances a sense of community, albeit, around here, that only seems to extend to those doing the volunteering. One of our owners spent the whole off season going throught several thousand xmas lights to make them all operable. Several owners spent a few hours putting them up in our courtyard. Dec 1, we will light them and have a little gathering and toast the season. Hot chocolate and cake (all donated), bring your own bottle if desired. I was struck by the comment of the lady that fixed all the lights. "And just think, it did not cost ---------------- a dime. This couple is also going to buy a tree for the display. This all was not done to save the association money, it was done because we volunteered to do the job. In fact, I doubt few absentee owners know this goes on. They don't reply to e-mails, web postings or anything else, and don't mention being on a committee or board. All not atypical situations in associations. I have never canvased the volunteers (some Board members) and asked how these folks would feel if the Board elected to having a working dinner at a local spa and billed the asociation. Another subject entirely.





As a board member, I am quite aware of the types of discretion we have in spending HOA funds.

You want to slice and dice a parse words merely for the sake of argument and it's pretty tacky, if you ask me.

If your ethics are that gray, more power to you.

MicheleD
(Kentucky)

Posts:4491


11/23/2008 12:45 PM  
Posted By RobertR1 on 11/22/2008 10:39 PM
Just to mention, several of us here also feel volunteerism enhances a sense of community, albeit, around here, that only seems to extend to those doing the volunteering. One of our owners spent the whole off season going throught several thousand xmas lights to make them all operable. Several owners spent a few hours putting them up in our courtyard. Dec 1, we will light them and have a little gathering and toast the season. Hot chocolate and cake (all donated), bring your own bottle if desired. I was struck by the comment of the lady that fixed all the lights. "And just think, it did not cost ---------------- a dime. This couple is also going to buy a tree for the display. This all was not done to save the association money, it was done because we volunteered to do the job. In fact, I doubt few absentee owners know this goes on. They don't reply to e-mails, web postings or anything else, and don't mention being on a committee or board. All not atypical situations in associations. I have never canvased the volunteers (some Board members) and asked how these folks would feel if the Board elected to having a working dinner at a local spa and billed the asociation. Another subject entirely.





As a board member, I am quite aware of the types of discretion we have in spending HOA funds.

You want to slice and dice a parse words merely for the sake of argument and it's pretty tacky, if you ask me.

If your ethics are that gray, more power to you.

MicheleD
(Kentucky)

Posts:4491


11/23/2008 12:47 PM  
Robert:

Please disregard my quoted material in my duplicate postings (that was an error too).

I've got twitchy fingers today and that was meant to copy/quote Kirk's ridiculous obfuscation of ethics.

MicheleD
(Kentucky)

Posts:4491


11/23/2008 12:51 PM  
In addition, and I will repeat this:

Treating the board to a holiday or thank you meal is not even remotely the same thing as "reimbursement" for meals and/or expenses.

It's ridiculous and unethical to even attempt to conflate the two.

And I stand by my position.

If the board is going to decide on their own what constitutes a "thank you" for their volunteerism, what's to stop them from doing so individually?

And if they will stretch ethics in that area, what other areas?

How hard would it be for someone to simply add it to an agenda at a meeting and get the membership to approve of it?

Sneaky, greedy, and misuse of funds, in my opinion, to do it any other way.

Where else will those standards apply for these people?
RobertR1
(South Carolina)

Posts:5164


11/23/2008 1:03 PM  
Michele,
You have no idea how glad I am to hear that.

I have a tendency ()actually more than that) of getting myself in trouble if I over word things. I have stepped in some big piles doing that and trying to be cute.
KirkW1
(Texas)

Posts:1665


11/23/2008 4:33 PM  
In regards to the view of lunch and IRS rules it is quite interesting. If they purchase a working lunch, or provide lunch as some part of a function it isn't income. If they pay you back for buying lunch on the road, it is income.

But if a company you work for buys lunch it is never income. Many doctors have a free catered lunch every day they work. And it is not income. In fact, some have breakfast and lunch almost every day and it isn't income. (Drug companies buy the meals and use that time to inform the doctors about the latest on their product.)

Michelle,

Perhaps your next ethical move would be to stop being judgmental. You don't know me. You don't know the situation about the board meal that the original post was regarding. Yet you are quick to insinuate that my ethics are lacking. Then again, this is not the first time I have seen you assume something about somebody based on extremely limited information.

You were the one who stated that the meal had to be disclosed to the residents. But by your reasoning every item that is purchased should be disclosed to the residents (without their asking).
RobertR1
(South Carolina)

Posts:5164


11/23/2008 4:48 PM  
Forgive me for butting in,
I have read posts from both of you, exchanges like this do neither one a service. You both are better than that. Your differences pale in the light of the Holiday season and the troubled times we are experiencing. As I said it is not my business but because of a recent conversation I had (tonight) with a member of the family, I am reacting to your posts personally. Wrong on my part, but it seems proper to remind everyone,problems get bigger than the differences we manufacture here on this site.
MicheleD
(Kentucky)

Posts:4491


11/23/2008 8:15 PM  
Posted By KirkW1 on 11/23/2008 4:33 PM
In regards to the view of lunch and IRS rules it is quite interesting. If they purchase a working lunch, or provide lunch as some part of a function it isn't income. If they pay you back for buying lunch on the road, it is income.

But if a company you work for buys lunch it is never income. Many doctors have a free catered lunch every day they work. And it is not income. In fact, some have breakfast and lunch almost every day and it isn't income. (Drug companies buy the meals and use that time to inform the doctors about the latest on their product.)

Michelle,

Perhaps your next ethical move would be to stop being judgmental. You don't know me. You don't know the situation about the board meal that the original post was regarding. Yet you are quick to insinuate that my ethics are lacking. Then again, this is not the first time I have seen you assume something about somebody based on extremely limited information.

You were the one who stated that the meal had to be disclosed to the residents. But by your reasoning every item that is purchased should be disclosed to the residents (without their asking).





Kirk:

You have a short memory, I believe the first "making it personal" stone was thrown when you cast aspersions on my own character and my board's by the nonsensical attribution of "dysfunctional" regarding my board.

I know enough about you by how you answered this on the grounds of ethics to make the judgments I did.

You seem to think it's okay for a board to treat itself to its own "thank you" reward with HOA funds, with no oversight.

My comments are NOT directly about the case in the OP's post. I don't know what they did, if they got permission, or how the process came about. My "judgmental" comments were directed at the HYPOTHETICAL of a board deciding on its own to treat itself to its own little "party" on HOA funds and then calling it a "thank you" reward.

Did this original poster's group do that? I dunno. I can't speculate. I can only address with what MY ethical yardstick is a hypothetical as I CLEARLY laid out ad naseum.

You can parse and slice and dice and nuance all you like, but if the board is spending money on ITSELF and NOT on HOA business for the benefit of the Association, then YES, the board DOES need to "get permission" to spend ANY money in that manner.

If it's spending money on association business, up to the amounts that it's allowed in its documents, that's one thing. But spending ANY amount outside of association, INCLUDING HOA money on itself as a self-described "reward," then it's out of bounds.

And if you want to give your board that sort of "perk" with lack of oversight to ANY board, then I do stand by my statement of calling your ethics into question.

What happens when next year they decide to "reward" each other simply by either trimming a few bucks off what their assessments are or by "rebating" some small amount back to each other?

Again, apparently my "ethics" bar is set a bit higher.





JenC1


Posts:0


11/26/2008 12:02 PM  
I appreciate each person's perspective. It has made me "see" the other side of this equation.

I thought since I brought up this issue, I would let you know my findings.

Our ARB admin (paid staff member, non-resident) asked us at our last meeting when we would be going out to dinner in December. She attends the dinner also (she makes around $70K and get benefits).

The money comes from a discretionary fund that is allocated to our board each year. It is $500. The ARB admin informed the board (there are 7 volunteers) that she only spent $99 on a camera this year for the ARB and BOT, so we will have $400 to spend on ourselves. Sounds like a high percentage of the total amount to spend on us.

I'm not going to bring up my thoughts on this to the board. I'm just not going to attend.
RobertR1
(South Carolina)

Posts:5164


11/26/2008 12:32 PM  
Jen,
I think this is a wonderful example of something that should never have been started in the first to turn into a manipulative demand from an employee. Who is the Boss here?

So, now that the barn door is open, how do you stop it?

I also won't voice my opinion other than to say, you get what you sow.
JenC1


Posts:0


11/26/2008 1:02 PM  
Robert,

We are a self-governing HOA. The "boss" is the BOT. They are suppose to do all the hiring, but rely on the "community manager" (their BOT admin) to do the hiring and firing...and the reviews of employees. Yes, we have an employee review the other 4 employees. I have been told by a BOT member that he does not know how much each HOA staff member makes (I found out the ARB admin's staff salary b/c she divulged it at our recent meeting). We have a management company that collects our dues, they have no other responsibilities. There are 5 employees at our HOA, and the 2 highest level ones have been here for 20 years (BOT & ARB admins).

A vocal minority of our ARB board (3 members) defend the ARB admin to no end, even when we have had recent problems that could have turned legal. The BOT turns a blind eye to this, but they have new members of the board who are beginning to understand that things are not "right".

We are going to have a notice posted for volunteers for the ARB. The 3 volunteers that make up the vocal minority have been there the longest, so they would be the first to go. That would be the change we would need to make our board's functions and the HOA staffs' duties transparent.
RobertR1
(South Carolina)

Posts:5164


11/26/2008 2:11 PM  
Jen,
To me, it appears like you have hijacked someone's psot Jen.

Why don't you move this to a new topic on the discussion page.

Give us a short synopsis of your situation. How many BOD, how large in numbers of members, some sort of organization structure, etc, and of what your concerns are. I think I am correct about this so let me know if I am off base. Not sure from the above what is going on.
RobertR1
(South Carolina)

Posts:5164


11/26/2008 2:15 PM  
Jen, I will save you the trouble. I see I mis-spoke and this is the second page of a two page post. So, if you would be so kind, flesh out what you posted above, I'm lost.
BruceF1
(Connecticut)

Posts:2535


11/26/2008 2:23 PM  
Posted By RobertR1 on 11/26/2008 2:11 PM
Jen,
To me, it appears like you have hijacked someone's psot Jen.

Why don't you move this to a new topic on the discussion page.

Give us a short synopsis of your situation. How many BOD, how large in numbers of members, some sort of organization structure, etc, and of what your concerns are. I think I am correct about this so let me know if I am off base. Not sure from the above what is going on.


Robert,

Jen IS the originator of this thread and I believe her previous post IS related to this thread, although I don't completely understand it. All HOAs that are under homeowner control are self-governed although not all are self-managed. I'm not certain about the role of the employees, who they are, or how they are paid. Everything may be on the up-and-up, but there may also be some hanky-panky going on here. Needs to be sorted out.
BruceF1
(Connecticut)

Posts:2535


11/26/2008 2:25 PM  
Robert,

Aha! We are both on the same page, but I don't know what page it is.
RobertR1
(South Carolina)

Posts:5164


11/26/2008 3:22 PM  
Aha Bruce,
You seem to understand perfectly. I don't have a clue, which is my normal state. I think I'll just watch and maybe I will have a lucid moment at some point. I think I missed my medicine for the last few weeks.
JenC1


Posts:0


11/26/2008 3:43 PM  
Robert, you didn't miss your meds. Sorry for the confusion. I'm cooking parts of Thanksgiving dinner and watching 4 young kids at the same time. I was responding to this post, but also had another post in mind to respond to in regard to types of HOAs.

You are right, we are a self-managing HOA...I didn't know the correct terminology. The paid ARB admin "reports" to the volunteer BOT members.



BruceF1
(Connecticut)

Posts:2535


11/27/2008 4:02 AM  
Posted By JenC1 on 11/26/2008 3:43 PM
Robert, you didn't miss your meds. Sorry for the confusion. I'm cooking parts of Thanksgiving dinner and watching 4 young kids at the same time. I was responding to this post, but also had another post in mind to respond to in regard to types of HOAs.

You are right, we are a self-managing HOA...I didn't know the correct terminology. The paid ARB admin "reports" to the volunteer BOT members.





So, let me see if I understand.

You are self-managed, which means that you don't hire a property manager. Instead, you have paid employees that provide some of the functions that property managers do. Is that it?
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