budget authority

[Leo]

The delegates at the annual convention adopted an annual budget.

The bylaws are silent on the adoption of an annual budget, and they are silent on amending the annual budget.

Does the board have the authority to authorize any unbudgeted expenditures?

Does the board have the authority to reallocate the funds?

[Joshua Katz]

3 minutes ago, Leo said:

The delegates at the annual convention adopted an annual budget.

 

What did the motion adopting the budget say? And what do the bylaws say about the board's spending authority to begin with?

[jstackpo]

Seems doubtful.  Page 482, lines 27-29.

[Leo]

1 hour ago, Joshua Katz said:

What did the motion adopting the budget say? And what do the bylaws say about the board's spending authority to begin with?

It is moved and seconded to adopt the budget [presented].

The board shall be the governing body and direct the policies of the organization. Matters affecting the policies and means of accomplishing the objectives of the organization not otherwise provided for in the bylaws shall be vested in the board.

[jstackpo]

On the basis of that general authorization to do stuff, I withdraw my "doubtful".  But it may still be a bit dicey and could engender some points of order precipitating debate over interpretation of how extensive the bylaw "authorization" might be.

[Josh Martin]

3 hours ago, Leo said:

The delegates at the annual convention adopted an annual budget.

The bylaws are silent on the adoption of an annual budget, and they are silent on amending the annual budget.

Does the board have the authority to authorize any unbudgeted expenditures?

Does the board have the authority to reallocate the funds?

 

1 hour ago, Leo said:

It is moved and seconded to adopt the budget [presented].

The board shall be the governing body and direct the policies of the organization. Matters affecting the policies and means of accomplishing the objectives of the organization not otherwise provided for in the bylaws shall be vested in the board.

Based on these facts, it would seem to me that the board is free to authorize unbudgeted expenditures and to reallocate the funds. The bylaws provide that “Matters affecting the policies and means of accomplishing the objectives of the organization not otherwise provided for in the bylaws shall be vested in the board.” This is an extremely expansive provision and essentially seems to give the board the authority to do anything except where the bylaws provide otherwise, and we are told that the bylaws are silent regarding these matters. Therefore, these powers are vested in the board.

The one argument against this is that RONR provides that “In any event, no action of the board can alter or conflict with any decision made by the assembly of the society, and any such action of the board is null and void (see p. 577, ll. 23–33).” (RONR, 11th ed., pg. 483) I don’t find this too persuasive in this instance, however, for two reasons. First, the rule in the bylaws is so expansive that it could be read as superseding this rule, except in those cases where the bylaws grant specific authority to the convention. Second, it is is rather difficult to say whether reallocating funds and/or making unauthorized expenditures conflicts with the motion, since the motion merely says to adopt the budget, and neither the motion itself nor the organization’s rules elaborate on what this means.

It seems to me that the only recourse the members have in this situation is to elect different board members and/or to amend the bylaws.

It is of course, however, ultimately up to the organization to interpret its own bylaws.

[Joshua Katz]

I agree with the others, primarily because neither the bylaws nor the motion specified what effect this budget was to have on the board. If it had, I'd probably still agree based on the board's powers under the bylaws.

[Leo]

What about this.

A bylaw states, “The board is subject to the delegates at the annual meeting."

The delegates at the annual meeting adopted the “fixed” budget as presented without amendment and with no additional wording addressing the board’s amending the budget, or authorizing expenditures not included in the budget, or reallocating funds in the budget.

A later bylaw, the one previously quoted states, “Matters affecting the policies and means of accomplishing the objectives of the organization not otherwise provided for in the bylaws shall be vested in the board”

It seems to me the later bylaw negates the whole idea of the board’s being subject to the delegates at the annual meeting as stated by the first bylaw.

If this is the case, there is no reason for the delegates to adopt the budget that was prepared by the finance committee and presented at the annual meeting; and in addition, there is no reason for the delegates to adopt any motion at the annual meeting since the later bylaw seems to allow the board to rescind or amend something previously adopted by the delegates.

[jstackpo]

18 minutes ago, Leo said:

A bylaw states, “The board is subject to the delegates at the annual meeting."

And if you want to get picky with the English language, this provision merely prevents the Board from acting independently during the time of the Annual Meeting.  It says nothing about subsequently. and your other provisions grant authority for the Board to do as it pleases when the association is between meetings.

Furthermore, after the annual meeting is over, there are no more "delegates" as such -- RONR, page 237ff. -- so there is nobody around for the Board to be subject to.

[Dan Honemann]

It seems to me that the answers to the questions asked depend upon a determination as to whether or not the delegates at the annual meeting had the authority to take the action which they took when they adopted the budget. If they did, then I see nothing in what has been posted so far which would indicate that the board has the power to take any action which would conflict with the action taken by the delegates at the annual meeting.

[Gary Novosielski]

13 hours ago, Leo said:

What about this.

A bylaw states, “The board is subject to the delegates at the annual meeting."

The delegates at the annual meeting adopted the “fixed” budget as presented without amendment and with no additional wording addressing the board’s amending the budget, or authorizing expenditures not included in the budget, or reallocating funds in the budget.

A later bylaw, the one previously quoted states, “Matters affecting the policies and means of accomplishing the objectives of the organization not otherwise provided for in the bylaws shall be vested in the board”

It seems to me the later bylaw negates the whole idea of the board’s being subject to the delegates at the annual meeting as stated by the first bylaw.

If this is the case, there is no reason for the delegates to adopt the budget that was prepared by the finance committee and presented at the annual meeting; and in addition, there is no reason for the delegates to adopt any motion at the annual meeting since the later bylaw seems to allow the board to rescind or amend something previously adopted by the delegates.

I would say that the later bylaw provision does not negate the idea that the board is subject to the delegates.   It says that it only applies to matters not otherwise provided for in the bylaws.  But the authority of the delegates clearly is otherwise provided.  

Therefore, if the delegates adopt a budget, the board is subject to that budget, and the catch-all provision for matters not otherwise addressed cannot be used to allow them to escape from the restrictions of the budget.

[Guest Who's Coming to Dinner]

On 12/28/2018 at 6:41 AM, Daniel H. Honemann said:

It seems to me that the answers to the questions asked depend upon a determination as to whether or not the delegates at the annual meeting had the authority to take the action which they took when they adopted the budget. If they did, then I see nothing in what has been posted so far which would indicate that the board has the power to take any action which would conflict with the action taken by the delegates at the annual meeting.

I agree, because the wording we have seen does not give the board exclusive authority in such matters, and thus, it remains subordinate to the will of the assembly.

[Josh Martin]

On 12/28/2018 at 8:19 PM, Gary Novosielski said:

I would say that the later bylaw provision does not negate the idea that the board is subject to the delegates.   It says that it only applies to matters not otherwise provided for in the bylaws.  But the authority of the delegates clearly is otherwise provided.  

Therefore, if the delegates adopt a budget, the board is subject to that budget, and the catch-all provision for matters not otherwise addressed cannot be used to allow them to escape from the restrictions of the budget.

Based on the additional facts which have been provided, I am inclined to agree, however, does adopting a budget, in and of itself, mean that any other spending is prohibited?

[Gary Novosielski]

4 hours ago, Josh Martin said:

Based on the additional facts which have been provided, I am inclined to agree, however, does adopting a budget, in and of itself, mean that any other spending is prohibited?

I think so, in the absence of some rule or custom to the contrary. I think it should prohibit any other spending not explicitly approved as either a one-time authorization or as an amendment to the previously adopted budget. In some organizations, the board has the authority to transfer between accounts without the approval of the general assembly so long as the total remains unchanged.

If the budget is deemed not to be restrictive, then what are we to make of its approval?  The Ayes have it, the motion is approved, and it is, therefore, the sense of the assembly that the pages do indeed contain many, many numbers."

[Joshua Katz]

1 hour ago, Gary Novosielski said:

If the budget is deemed not to be restrictive, then what are we to make of its approval?  The Ayes have it, the motion is approved, and it is, therefore, the sense of the assembly that the pages do indeed contain many, many numbers."

This is precisely why, in my opinion, absent a provision in some rule set explaining how the budget works, the motion to adopt the budget should explain what is being done.

[Leo]

18 hours ago, Josh Martin said:

Based on the additional facts which have been provided, I am inclined to agree, however, does adopting a budget, in and of itself, mean that any other spending is prohibited?

The board is subject to the annual meeting at which the budget was adopted as presented and the motion to adopt is silent on any conditions concerning the board's amending the budget or handling any unforeseen evens.

If the office roof starts leaking seriously, or the organization runs into technical difficulties and needs legal assistance, what recourse does the board have?

 

Is "any other spending prohibited"?

[Josh Martin]

15 hours ago, Gary Novosielski said:

I think so, in the absence of some rule or custom to the contrary. I think it should prohibit any other spending not explicitly approved as either a one-time authorization or as an amendment to the previously adopted budget. In some organizations, the board has the authority to transfer between accounts without the approval of the general assembly so long as the total remains unchanged.

If the budget is deemed not to be restrictive, then what are we to make of its approval?  The Ayes have it, the motion is approved, and it is, therefore, the sense of the assembly that the pages do indeed contain many, many numbers."

In my experience, the meaning of adopting a budget varies considerably from organization to organization. In many cases, it is intended as a guide rather than as a binding document. There is no rule in RONR on this subject.

1 hour ago, Leo said:

The board is subject to the annual meeting at which the budget was adopted as presented and the motion to adopt is silent on any conditions concerning the board's amending the budget or handling any unforeseen evens.

If the office roof starts leaking seriously, or the organization runs into technical difficulties and needs legal assistance, what recourse does the board have?

Is "any other spending prohibited"?

In the long run, I think it would be prudent for the organization to adopt its own rules governing these questions.

In the interim, the board will have to interpret the motion as best as it can.

[Gary Novosielski]

6 hours ago, Leo said:

The board is subject to the annual meeting at which the budget was adopted as presented and the motion to adopt is silent on any conditions concerning the board's amending the budget or handling any unforeseen evens.

If the office roof starts leaking seriously, or the organization runs into technical difficulties and needs legal assistance, what recourse does the board have?

 

Is "any other spending prohibited"?

The board often has recourse to transfer budgeted amounts from other budget lines.  In the case of a winter storm, it might transfer amounts from the budget for the Summer Picnic and the Autumn Hayride, pending modification of the budget by the assembly.

Or, it might take emergency action under the provisions of the motion to Ratify, in the expectation that the assembly will approve.

[Atul Kapur]

31 minutes ago, Gary Novosielski said:

The board often has recourse to transfer budgeted amounts from other budget lines.  In the case of a winter storm, it might transfer amounts from the budget for the Summer Picnic and the Autumn Hayride

Under what authority do they have this recourse? Hoping the assembly ratifies their action doesn't fit the definition of recourse. 

[Gary Novosielski]

1 hour ago, Atul Kapur said:

Under what authority do they have this recourse? Hoping the assembly ratifies their action doesn't fit the definition of recourse. 

That would have to be a rule or custom of the organization to allow them to move money around without affecting the total.  I've also seen a case where amounts could be moved but only among subgroups in a budget that contained such categories.  It would be wise for an organization to brainstorm oddball situations and do their best to make rules that accommodate at least the more likely ones.  But not all bylaws are written by the wise.

I agree that hoping for ratification is not true recourse, but the fact that Ratify is a motion at all is an admission that there may exist situations rare enough that nobody thought to make rules about them, but which can still occur and, when they do, require immediate action.  

I'm of two minds on whether powers ought to be granted for "emergency" situations.  I worry that granting "emergency" powers could result in those who seek more power seeing emergencies everywhere when none exist.  If those taking emergency action without overt authority are willing to do so at their own personal risk, they might tend to be more mindful of how favorably the assembly is likely to look upon their actions.

[Atul Kapur]

I agree with what you have said above and with your earlier posts. I was taking issue with your statement 

7 hours ago, Gary Novosielski said:

The board often has recourse

because I thought you were saying that there was some recourse in the OP's situation.