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Budget


Guest Leanne
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I am not sure where to go with this question but will start here.  Please understand I am new to this.  

Bylaws require the board to annually present a balanced budget to the membership for approval.  Can the board use money from the savings account to balance the budget?

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10 minutes ago, Guest Leanne said:

I am not sure where to go with this question but will start here.  Please understand I am new to this.  

Bylaws require the board to annually present a balanced budget to the membership for approval.  Can the board use money from the savings account to balance the budget?

RONR does not speak to this specific issue but won't the membership decide this matter via the approval process?

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Welcome newbie Guest Leanne!   Unfortunately...  RONR doesn't have any specific rules on the construction of budgets so we really can't answer your question directly. 

It is, most likely, a matter of interpretation of your bylaws which will be up to your association, collectively, to make.  As George M. wrote (as I was typing) the "interpretation" will probably take place when the budget is presented for adoption, and the membership gets a look at the (presumed) line item:  "Withdraw from Savings... $XXX.XX" which would be necessary to balance the numbers.   The membership could let it stay, or strike it out via the amendment process if the membership was unhappy with the "interpretation" of what "balanced" really meant.  Or other possibilities.

No matter what, please come back here with further (parliamentary) questions that we may do a better job at.

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Savings are assets and so are part of the balance sheet, not the income/expense statement.  From the standpoint of accounting, there is nothing wrong with drawing down savings.  However, if your bylaws require a balanced budget each year, then the expenses projected must equal the income projected for the year.  In this case, then, no, it would be wrong to draw down savings.

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On 5/17/2019 at 1:11 PM, Guest Leanne said:

I am not sure where to go with this question but will start here.  Please understand I am new to this.  

Bylaws require the board to annually present a balanced budget to the membership for approval.  Can the board use money from the savings account to balance the budget?

My understanding of the definition of "balanced budget" is one in which the income equals the expenditures, so that there is neither a deficit nor a surplus anticipated.

Use of money already in the bank is an expenditure, not anticipated income.  

But as a non-member, my interpretation of what your bylaws mean is of limited (i.e., little or no) value.

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