Hi butternut,
There seem to be a few issues at play here - bylaws and communication. Do your bylaws not address budgeting for events and board members voting on how that money will be spent? It does seem that the president crossed a big line by making these (expensive) decisions unilaterally and that it should be brought to your CPA's attention. If these issues are NOT covered in your bylaws, they should be.
Moving forward, hopefully you can work toward amending your bylaws (if needed) to prevent this kind of thing from happening - as well as better communication with the new president.
Recently we had a year end celebration for the entire school. The entire cost is traditionally borne by the PTA. For the last 2 years we have been having a DJ. Due to a finance crunch, it was decided to do away with the DJ, just get cookies and rollover the balance to the next year.
On the eve of the event, one of the co presidents emails the rest of the board saying she wants the entire amount allocated for the celebration to host an artist friend. When it was pointed out that the cookies must also be accounted for, they not only ignored it but also made outrageous accusations. On the day of the event, there was not only cookies and the artist but also the DJ!
Many of the Board members were aghast by the scant regard for the budget and it was decided that the Board would need to vote on the overages before any reimbursement would be made. Meanwhile the President uses her debit card to withdraw the money to be paid for the DJ and the Artist and pays them off!!
The constitution of the Board has changed after that event with many members retiring including the Co president. The Treasurer and the President continue their terms into the next year.
What should be the course of action going forward? Does the New Board need to approve the overages retrospectively? If they decide not to approve, does the Co president need to pay up the balance over the budgetted amount? Does this need to be brought to the attention of the CPA auditing the books?
This is not the first time that the President has misused their debit card to unilaterally decide and spend on events/items not approved by the Board. What controls are needed to prevent the President abusing their authority?
