In the course of my business as a CPA auditing homeowners associations, I must read minutes of board of directors meetings for approximately 100 associations annually. That’s minutes for about 1,200 monthly meetings, plus the annual membership meetings. Once you see the general format that is being followed, you can actually skim through them fairly quickly to find the items you’re looking for, so it actually isn’t as bad as it sounds.
Minutes are the legal documents that are intended to record the decisions and actions of the board of directors of the association. Some people like to have the minutes reflect the full discussion of what occurred at the meeting so that items are placed in context, while others follow the theory that less is better; the minutes should only reflect the final decisions of the board. While I tend to prefer the latter format, I’m not in the position of offering legal advice, and don’t do so. Contact your association lawyer for that. I’m also not in the position of suggesting proper format for minutes, although I notice most follow the order in which the meeting was conducted.
I’m interested in the content of the minutes. As an auditor, I’m specifically looking for proper documentation and authorization of financial transactions, compliance with State Civil Statutes, authorization of reserve transactions, and authorization for entering into contracts. It’s clear from reading the minutes of many associations that there is no structured approach for making sure that the minutes are complete, or even that they reflect all items discussed.
Unfortunately, many times, after reading through an entire year's minutes, I learn whose dog is leaving a mess where, and who has dead flowers in front of their house, and who is violating parking and noise restrictions, but nothing to indicate officers were elected, $100,000 in reserve funds were expended, a budget was approved, any contracts were approved, an audit was conducted, or even how many meetings were held.
In California, the Corporations Code (Section 8320) requires associations to maintain minutes. I suspect there are similar requirement in most states. But, required or not by statute, the association should maintain complete minutes to document actions taken.
We have prepared a checklist of suggested items that should be documented in an association’s minutes. This checklist may not be all-inclusive, but it does contain a representative list of items that should be considered for inclusion in the minutes. These are broken down into several categories reflecting the items we look for in minutes, so are not likely to follow the format in which meetings are generally conducted. Categories are:
- General
- Operations
- Reserves
- Financial
- Administrative
To print just the minutes checklist, click here
