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Using a Personal Credit Card


Guest Maria
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The Treasurer of our non-profit has decided that writing checks is unnecessary and is paying the Association’s expenses with her personal credit card. This month she is seeking close to $3000 in reimbursements, which are processed by her also. She was asked not to use it, but continues with the blessing of one board member that says we shouldn’t make a big deal about it. The treasurer said these were budgeted items that she was paying, but because of COVID, won’t write checks. The Association also has its own debit/credit card, but she says it doesn’t work, but hasn’t done anything about it. There is nothing in the bylaws about this new method of payment nor is there anything in the bylaws or rules about Treasurer reimbursement. Could use a little advice. Thanks in advance. 

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This sounds like a clearly bad idea.  The blessing of a single board member is hardly sufficient.  By a majority vote the assembly can direct the Treasurer to use either the society's checkbook or the society's credit card.    I fail to see how writing a check can put one at risk of infection, especially if it is delivered by mail.

It may be time to write and adopt a full job description for the Treasurer position, including a provision that when a check is written to the Treasurer, it must be signed by another officer.  Be sure to establish other signatories with the bank as needed.  Some organizations always require two signatures from among those authorized on any check.

Basically it's up to the board as part of their duties to ensure that the finances are properly handled.  Finances are not a big deal until they are a big deal, and then they are a big ****ing deal.

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9 hours ago, Guest Maria said:

She was asked not to use it, but continues with the blessing of one board member that says we shouldn’t make a big deal about it.

Asked by whom? If by individuals, then that's one thing. If by the board by passing a motion, then the board could always enforce that by declining the reimbursements. I would think that, if that is not the situation, that would be a proper course of action - first, pass a motion telling her to use the organization credit card, then enforce it. But for now, obviously, you have a different matter, one that is largely not a matter of parliamentary procedure.

9 hours ago, Guest Maria said:

The treasurer said these were budgeted items that she was paying, but because of COVID, won’t write checks.

I've noticed a whole variety of things like this, mostly by businesses and organizations, but sometimes by people, too - things that have no connection to Covid but nonetheless are pawned off on it. I predict, on a side note, that many of those things won't come back. Airlines have saved money by not giving away free snacks, and are unlikely to resume doing so. I have no idea how writing a check is a covid risk. How, by the way, does the treasurer take her reimbursements? 

 

9 hours ago, Guest Maria said:

The Association also has its own debit/credit card, but she says it doesn’t work, but hasn’t done anything about it.

Perhaps she should contact the treasurer...oh wait. Perhaps she should do something about that.

9 hours ago, Guest Maria said:

There is nothing in the bylaws about this new method of payment nor is there anything in the bylaws or rules about Treasurer reimbursement

I wouldn't expect the bylaws to address reimbursement. If the rules don't, it is done by main motion like any other business. But then there's:

9 hours ago, Guest Maria said:

which are processed by her als

If no rule authorizes this, I don't think people should have their hands in the till without anyone to check up on what they're doing. Controls should be developed, such as a bank account requiring two signatures on checks, so one person is not writing themselves a check.

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Thank you everyone. To clarify, the board asked her not to use her credit card at the last board mtg. It was suggested she use Google Chrome to ensure payments go through with the credit card, because the problem is likely the internet explorer she’s using. Reimbursements are sent in the mail, by check, however because she has not sent any reimbursements, I’m unsure how she pays herself. Our bylaws and rules do address reimbursement because the President and Governor are required to attend state conferences. These rules spell out what you can submit and each has a budget that expenses are billed to. Checks also require 2 signatures, but she is not writing checks … then there’s the issue of receiving the points on her card that no one else receives. Just yesterday she sent the reimbursement list and we saw that she charged 2 more items to her card. 

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1 hour ago, Guest Maria said:

To clarify, the board asked her not to use her credit card at the last board mtg.

Asked, as in people said not to, or asked as in passed a motion to this effect?

 

1 hour ago, Guest Maria said:

Our bylaws and rules do address reimbursement because the President and Governor are required to attend state conferences. These rules spell out what you can submit and each has a budget that expenses are billed to.

There is a principle of bylaw interpretation that permission to do something implies a prohibition of similar things not given permission. This rule would likely prohibit reimbursements that do not follow the rule.

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6 hours ago, Guest Maria said:

To clarify, the board asked her not to use her credit card at the last board mtg. It was suggested she use Google Chrome to ensure payments go through with the credit card, because the problem is likely the internet explorer she’s using.

It's no surprise that the board is having little luck with asking and suggesting.  She clearly views those as optional and freely ignores them.  And if there is no approved motion, just individual people asking and suggesting during discussion, she's absolutely right  Motions are the only way "the board" can decide to do anything.

At some point the board may realize that if they want someone to do something, they will have stop asking and suggesting, and start instructing and directing.  

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46 minutes ago, Rob Elsman said:

In our era of electronic banking, I tend to agree with the treasurer that writing paper checks is obsolete and wasteful.  It is possible for, nowadays, for an organization to establish its own bank account with on-line capability to make payments.

But the treasurer apparently didn't say what you're "agreeing" with.  She said writing checks was a Covid risk.  I agree that banks have convenient methods of issuing payments (including paper checks) by means of online transactions.  But the paper checks typically say "Signature on File" rather than including a facsimile signature. It may be that there are controls available for organizations that require dual signatures, but if there are I'm not aware of them.

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3 hours ago, Rob Elsman said:

It is possible for, nowadays, for an organization to establish its own bank account with on-line capability to make payments.

True; and that would be fine (if authorized by the group). But that's not what the treasurer did. She paid with her personal credit card.

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46 minutes ago, Rob Elsman said:

I take it that she embezzled the organization's money and deposited into her personal checking account.

Whether or not what she did amounts to "embezzlement" is a legal judgement. But it certainly does not seem proper, and the assembly should do whatever it takes to put a stop to it.

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2 hours ago, Rob Elsman said:

I take it that she embezzled the organization's money and deposited into her personal checking account.

I don’t think there is any evidence (or an allegation) that this is what is happening. Is it possible? Yes. But I see no evidence of it and there has been no allegation of it. It looks like she may be doing this partly out of convenience and partly to gain points with the credit card company for using her own credit card.

Edited by Richard Brown
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Were the treasurer doing this simply for convenience (let's ignore the de minimis credit card premiums), she would have issued receipts to the organization for the cash and entered a transaction on the organization's books with a debit to a receivables account showing her as a debtor to the organization and a credit to cash.  In the case of her death, these things would have proved to the executor of her estate that some unused monies in her checking account, if any, were owed back to the organization in the distribution of the estate.  Did all this happen?  Mr. Brown, I would bet my left thumb that it did not.

In my mind, this treasurer failed to exercise that degree of care that is required of an officer to whom the funds of the organization were entrusted.  In fact, she failed to even exercise the basic degree of care that would be expected of any member to protect the assets of the organization from harm.  For these reasons, she ought to be expelled from the organization for reckless negligence and, yes, embezzlement.

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26 minutes ago, Rob Elsman said:

In my mind, this treasurer failed to exercise that degree of care that is required of an officer to whom the funds of the organization were entrusted.  In fact, she failed to even exercise the basic degree of care that would be expected of any member to protect the assets of the organization from harm.  For these reasons, she ought to be expelled from the organization for reckless negligence and, yes, embezzlement.

You are assuming facts not in evidence. All we know from what the OP told us is that the treasurer has been paying the organization's bill with her personal credit card and reimbursing herself from the organization's treasury, and that she has been "asked" not to do it. I agree that this is a serious issue that needs to be addressed, and that some sort of discipline is appropriate. But I don't think we have enough facts to say that it amounts to embezzlement or that it warrants expulsion.

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I agree with Mr. Merritt and would add that we have no business telling this organization what  It should do regarding the treasurer. We can provide options, but what if any action is to be taken is not up to us. It is a decision for the members of the organization to make. Besides, we have only a one-sided snippet of the entire situation.

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