What if a board votes "No" on accepting the monthly financial statements?

[Guest HTS]

Our board has been voting to accept the financial statements, monthly and/or quarterly. Should we not be doing this? They always vote "yes" but what if one day there is a majority vote for "no" to not accept the monthly financials?

[Rob Elsman]

Unless these statements are to be published, I do not think the proposal to accept the statements has two sides, and the question should not be put as a yes/no motion.

If, on the other hand, the board is required by rule to accept financial statements, the handling should be the same as the approval of the minutes. In neither case is it possible to come away without financial statements at all.

[Richard Brown]

Your board should not be voting to accept or approve financial reports of the treasurer. The only thing in that regard that should be voted on is the audit of the treasurers report.  RONR (12th ed,) in section 48:24 says the following regarding financial reports: 

Action on the financial report. No action of acceptance by the assembly is required—or proper—on a financial report of the treasurer unless it is of sufficient importance, as an annual report, to be referred to auditors. In the latter case it is the auditors’ report which the assembly accepts. The treasurer’s financial report should therefore be prepared long enough in advance for the audit to be completed before the report is made at a meeting of the society.

[Atul Kapur]

For once, I'll go further into RONR than @Rob Elsman 😉: the regular treasurer's report / financial statements should not be voted on at all. The report is made, any questions may be asked, any motions arising should be processed, then move on.

The audit committee's report on the annual statement, OTOH, should be adopted.

 

See RONR (12th ed.) 48:20 - 48:26

[Rob Elsman]

I heartily agree with Mr. Kapur. 🙂

[Gary Novosielski]

So do I.  What factual basis would the Board have for not approving a report of what was collected or spent?  Even if the expenditure was, for example, outside the budget, voting no on the truthful report of the error accomplishes nothing.

Audit reports are another matter. They are the result of independent investigation, authenticated facts, and remedial recommendations.  Even if bad things were done, correcting them is accomplished by accepting the report. 

[ClaireG]

What if your organization doesn't have a treasurer? Would it be necessary for the executive board to review financial reports that staff puts together and then vote to accept financials or to amend them?

[Rob Elsman]

If the organization has financial affairs, you can rest assured there is some kind of officer in charge of them. His title might not be Treasurer, but he can certainly be found, whatever he is.

[Joshua Katz]

But the fact remains that the board should review the financials without moving to accept them, other than an audit report. As far as amending them, I can't think when you'd need to do that. Under what circumstances would the board know what the numbers are better than the person in charge of preparing them?

[Richard Brown]

To reinforce the statement immediately above by Mr. katz and that I made in my first post, the board should not be approving financial reports, period.   You approve audit reports, but not the financial reports of the treasurer or whoever the financial officer is.  He presents his report just like other officers and the board takes no action on it other than for the chair to "Thank you for your report.  It will be placed on file.  The next item of business is . . . .".

[J Wellington]

I don't know why they'd be voting at all. A financial report is informing the assembly of the standing of the treasury for the reporting period. There's nothing to vote on. An audit would be different