Jim Anderson

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About Jim Anderson

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    Gig Harbor, WA

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  1. I want to thank you both for your very thoughtful replies to my questions. The two most recent replies pose questions that will take me a little time to develop meaningful answers to so please stay tuned for additional information in the near future. I will say that in my investigations into Washington State laws (Chapter 24.03 RCW WASHINGTON NONPROFIT CORPORATION ACT), I do not find any requirements or mandates for auditing of financial records for an organization incorporated under this statute (which we are). There is a "Quick Reference Guide" for board service in organizations such as ours that has been prepared by the Washington State Secretary of State and Washington State Attorney General containing guidelines under "Duty of Care" for accurate record keeping and examination of financial records. Although the information compiled in this document are termed "guidelines", it fairly closely mirrors RONR Chapter XV; §48 relating to Treasurer reporting, neither of which require employing the services of a professional, licensed CPA to examine our financial records. My inclusion of GAAP definitions for the terms cited were only an attempt to clarify differences in definition of the terms. GAAP from what I've been able to determine contain three terms regarding financial records examination, "Audit" (highest level); "Review" (next highest) and "Compilation" (lowest). Although GAAP does not seem to define the term "examination", I believe it would be similar to "compilation" or perhaps even a lower level to that. Richard's hunch is for the most part correct as to the membership thinking the amended term "review" to be less restrictive however I need to inquire of the member raising the amendment, what was that members understanding of the term was and was the intent to somehow, meant to actually require the organization to employ the use of a CPA. Again, I do believe the membership present at the meeting in general felt the amended language was less restrictive and perhaps much the same (just different). In preliminary answer to your questions: Question #1: We have a Board member who has a claimed CPA background who asked for the original amendment proposal (changing "audit" to "examination"). With his reported background, he felt we must change the wording to avoid penalty of law. I don't believe he understands there seems to be no such law. Our organization has adopted nothing requiring the use of GAAP rules. Our bylaws are silent on the subject other than the section requiring (formally an audit) a review with no other description or rule as to how this is to be performed. Our bylaws do rule RONR applies where state law or our bylaws are silent. I've attempted to relate these points to this (and other) board member to no avail. More work to be done! Question #2: Since no state statute seems to exist, we do have that authority (in my opinion). The experience to date would indicate, the original amendment should have included "what type of audit it will conduct, how thorough it will be and who will conduct it" and this may well be the next step or at least prepare a "special rule of order" to accommodate the "what-how-who" points which would also seem to answer Question #3. Further, I also agree with Richard in that in retrospect, I should have offered a better debate on the subject of amending the bylaw to begin with or at least somehow should have been more convincing. As to Daniel's thoughts, I have re-read RONR (11th ed.), on page 595, lines 3-31 and I believe I do have a better understanding and since there again seems to be no state law requiring our organization to hire a CPA for financial record examination (audit, review or whatever) and since RONR does speak on the subject and agrees with guidelines presented by our Secretary of State and Attorney General for organizations such as ours, we should have presented an amendment with more in-depth rules on the "what-how-who" of our financial reviews (audits, examinations or whatever).
  2. Just to be sure of what I feel are the intended meanings for the points I made in my original post above: Original language (just prior to the notice being sent to members): Section 6. The Board of Trustees shall direct an audit of the Clubs financial records at the end of each fiscal year. (My understanding here is the GAAP (Generally Accepted Accounting Practices) definition of "audit" would require employing a Certified Public Accountant) Proposed language in the notice (original proposed amendment language sent in the notice): Section 6. The Board of Trustees shall direct an audit examination of the Clubs financial records at the end of each biennial fiscal year. (The intent for the original amended language "examination" was to reduce costs for the organization associated with "audit" and since "examination" is not defined in GAAP pronouncements, there would be no requirement to hire a CPA to perform the "examination" of financial records thereby reducing costs) Amendment to proposed amendment at the meeting which notice was given and that which was adopted by the membership: Section 6. The Board of Trustees shall direct an audit an examination a review of the Clubs financial records at as of the end of each even numbered fiscal year. (My understanding here is the GAAP definition of "review" still requires use of a CPA and therefore would seem to me to be an increase in the "scope of notice")
  3. Our organization’s bylaws committee presented a proposed amendment to one of our bylaws at a meeting where notice of the proposed amendment was given to all members 10 days prior to the meeting and following a meeting at which the proposed amendment was read in accordance with our bylaws. The bylaw in question directs the Board of Trustees to have the organization’s financial records audited at the end of each fiscal year. The proposed amendment’s intent was to reduce cost impact for review of our financial records, firstly by eliminating the need to hire an outside CPA to “audit” our records (supported by Washington State law for non-profit corporations) and require instead an “examination” of our records which would not require the services of a CPA. Secondly, the proposed amendment would change this review from yearly to once every two years. Excerpt from our bylaws concerning amendments to the bylaws: These Bylaws may be amended by a two-thirds (2/3) vote of the voting eligible Members present at any regular meeting after such amendments have been read at a previous meeting and a copy sent to each member household in writing via US Postal Service or electronic mailing at least ten (10) days prior to the meeting at which said amendments shall be considered. During the presentation of the proposed amendment, a motion was made to amend the amendment changing the word “examination” to “review” and changing the word “biennial” to “even numbered”. This amendment to the proposed amendment (main motion) was approved and subsequently, the amended proposed amendment was approved by the membership. Original language: Section 6. The Board of Trustees shall direct an audit of the Clubs financial records at the end of each fiscal year. Proposed language in the notice: Section 6. The Board of Trustees shall direct an audit examination of the Clubs financial records at the end of each biennial fiscal year. Amendment to proposed amendment at the meeting which notice was given: Section 6. The Board of Trustees shall direct an audit an examination a review of the Clubs financial records at as of the end of each even numbered fiscal year. Questions: Since the term “review” in accounting language still requires an organization to involve a CPA, would the amendment to the amendment constitute a condition beyond the scope of notice? As the motion to amend the noticed amendment was adopted and if considered beyond the scope of notice, what are the implications of its passage and subsequent passage of the amended main motion? What remedies exist in parliamentary law?
  4. Our organization is struggling with a proposal to allow absent Board members to participate in Board meetings remotely, through electronic means. It has been suggested a test or trial run of allowing remote participation with the understanding the absent Board member would be allowed to participate in discussions and debate but not allowed to make motions or vote, prior to presentation to the membership in general, a bylaw amendment allowing such participation. My question: “Is it within Parliamentary Law guidance, for a Board member to participate in Board meetings via electronic methods with understanding he/she cannot make motions or vote but would be allowed to participate in meeting discussions and debate, when bylaws do not specifically allow for such participation?”
  5. Our organization’s Board of Trustees has mandated that the “bylaws committee” propose amendment to our bylaws allowing electronic participation in meetings of the Board. Up to this point the organization has resisted this form of participation however during the last BOT meeting, a Board member presented a motion to cause the bylaws committee to prepare and propose the allowance of this type of participation. The motion carried by a vote of all Board members present with the exception of one dissenting vote (the Chair). During debate on the motion, I (as bylaw committee chair) raised concern for electronic meetings due to a fact that the organization is small and has managed without the need of any sort of “electronic” participation and due to the fact, we are less than a month away from beginning the amendment proposal process (reading proposals), making it very difficult for the committee to prepare any proposed amendment particularly with respect to how participation would be controlled and what rules/processes would be required. The Board rebuttal to this was that the motion was to only require preparation of a very simple proposed bylaw amendment to allow electronic forms of participation and the process/rules for conducting meetings with this type of participation would be prepared following approval of the amendment by the organization’s membership (Board does not have bylaw amendment privileges, only the membership during a noticed meeting). The Board reasoning for forcing this issue seems to be 2-fold, 1) desire to bring the organization into the “electronic age” and 2) to entice “younger” members to become involved with governing the organization by running for office. Emphasis placed on item 2) because quite often, the younger member travels in business and as such may not be able to meet our bylaw requirement, Board members must not miss more than three (3) consecutive meetings in any given year (out of 10 total meetings each year). There was additional argument that retired members quite often spend winters in warmer climates and may also have difficulty meeting the bylaw requirement for attendance. Note: Our bylaws stipulate, proposed amendments are to be read to members present at a meeting prior to the meeting at which the proposal will be voted on and there is no limitation on who within the organization may present proposed amendments. My question: "Is it appropriate for our Board to make such a mandate of the committee without first laying out the rules and processes for allowing “electronic” participation in Board of Trustee meetings?"
  6. Thank you, all responders to my question. All in all, I agree, this issue is something our organization will need to interpret and answer. I really tend to agree with the comments from J.J. and Richard Brown. thank you all so much. Jim Anderson
  7. Unknown at this time however I assume the initial result will be to provide vital information concerning the attention of the Board. I believe any action to be taken, would need to occur at the next regularly scheduled meeting of the Board or a called special executive session meeting.
  8. The Chairman of our organization's Board of Trustees called a Special Board meeting with set agenda giving prescribed 3 day notice. During the "3 day notice" period, information came to the attention of the Chairman ostensibly with serious implication to the organization. In the view of the Chairman, divulging this information to the Board must be in "executive session" and cannot wait (certainly should not) until the next regular meeting of the Board or even waiting another 3 days to give the prescribed notice for another special meeting. Question: During a "called special meeting" would a motion to enter "executive session" to deal with a matter not on the published agenda be in order when the item may have serious implication for the organization?
  9. Question: Is it appropriate for a Board of Trustees to waive the membership dues for a specific member? Background: For at least 20 years, the member holding the committee position of "rental manager" has had their dues waived during their tenure as rental manager. The historical rationale for the dues being waived is due to the nature of this position being "on call" to show the building to prospective renters, meet with renters on the day of rental and inspect the facility following the rental. The rental manager position is unlike any other position in the organization (all volunteer) in that work performed by all other members (committees, officers etc.) can be performed at times of their calling and are not under an “on call” description. Our organization's bylaws state: (1) The government of the organization is vested in the Board of Trustees. (2) The Board of Trustees shall be responsible for the maintenance and operation of all facilities and conduct of all activities. (3) Dues shall be in an amount to be set from time to time by the Board of Trustees, however no increase in dues shall be effective until action by the Board of Trustees has been ratified by an affirmative vote of 2/3 of the members present at the next general meeting of the membership after 10 day notification of such action has been sent. (4) Member’s dues cover the organization's fiscal year (1 July to 30 June) and members of record will be billed full annual dues on 1 June each fiscal year. Again, my question: Would it be in line with the bylaw duties and responsibilities (noted in #1 and #2 above) for our organizations Board of Trustees to waive the membership dues for our “rental manager” given the outlined duties and responsibilities and the “historical background” noted above?
  10. negative statement

    I apologize for an error I made in the quoted motion made above. The corrected motion as actually stated at the meeting by the member: "I move that we do not allow donated items or products for sale at the Store" The intention was to create a policy if this motion was adopted (which if was). Does this corrected version still form a positive motion in your view?
  11. negative statement

    Our store, up to this point, does not sell consignment or donated products. The question came up due to a member wishing to place items he/she made in the store for sale with the understanding any proceeds would be donated to the organization. Mr. Godelfan is correct in what the outcome would have been if the motion failed. We simply would not have had such a policy and such items would be allowed.
  12. At a Board meeting of our organization, a member made the following motion: "I move to enact a policy that our store shall not sell consignment or donated products" After the meeting was completed and this motion passed, a member brought up that this motion formed a negative statement in the motion and therefore should not have been allowed without re-wording in the "positive". My question is: does this motion fit the description of a "negative statement" in this motion as described on page 104 under "The Framing of Main Motions" and should it have been avoided or reworded somehow in the "positive"?
  13. Thank you Mr. Martin for the clarification. My apologies for the circular form of my questions thereby creating confusion.
  14. Clarification please: Mr. Novosielski, in your last post you indicate the answer to my 3rd question is the same as #2 which is still no. The question #3 is slightly different from #2 in that it asks: If the V-P sitting in the "chair" position would have the right to enter into debate and vote on any resulting question? Whereas #2 asks if the President would need to step down to debate/vote. Thank you