Cohousing-L Mailing List: Re: Credit / Debit Spending for Operating Expenses - Again

[R Philip Dowds (rpdowds]

1a: We do not have a community credit or debit card.
       Our accounts are structured as Operating Reserve, Replacement Reserve 
and Checking.  No money can directly leave the Reserves; instead, money is 
moved to checking, where any one of several bookkeepers can cut and mail a 
check.
       But there is very little money kept in Checking; big money is stored in 
the Reserves.  So we have arranged for EFT (Electronic Funds Transfer) with our 
bank.  Two persons are authorized to move money out of the Reserves into 
Checking.  Two different people hold the tokens with the continuously varying 
security codes.  So it always takes two different people to access big money.

1b: See 1a above.

1c: We used to pay about $3K a year for an annual audit.  It was always wrong, 
and nobody looked at it.  Now our financial records are kept by us, in 
Quickbooks, in a cloud server accessible to all.  The Treasurer and bookkeepers 
produce meaningful and accurate quarterly reports, and anyone who cares to look 
can always explore the read-only Quickbooks file.  It's usually accurate and 
up-to-date.

2:  Partly answered above.

2a: At each year's annual meeting, Committee and operating budget are condensed 
for the subsequent year.  Budget line items are placed into the Quickbooks 
chart of accounts.  After that, it's pretty easy to pull budget v actual 
reports out of Quickbooks.

2b: In some communities (and most condo associations), the duly elected 
Managing Board has well-defined powers to call on Reserves and move money 
between line items.  At Cornerstone, we've intentionally made the Managing 
Board quite weak, and rely instead on open meetings operating under names like 
"Repair" or "Interiors".  All members can attend any meeting at any time, with 
full participation privileges.  Apart from the weak Board, meetings have no 
formal (elected or appointed) membership or Chairpersons, with the possible 
exception of the Facilitators, who are seen as having exceptional process 
skills that are beyond those of an ordinary or typical member.
      Most meetings have very little money to spend.  The money they have is 
generally earmarked, and spending it on something else, or getting more money, 
usually requires a General Meeting (GM) of all the members.  The exception is 
the meeting called Repair, which has unlimited discretionary access to the six 
figure Repair Reserve.  The theory here, I think, is that we sometimes have 
repair emergencies that demand an instant response.  For instance, we recently 
discovered that a childrens' play structure had developed some rot, and the 
meeting called Repair determined we needed to buy a new one right away.  
Fortunately, even though the play structure was not a line item in the Reserve 
budget, Repair is authorized to make this decision without going back to the 
entire community.  (I know you said speak to operating, ignore reserve, but in 
our community, the boundaries get blurred.)

2c:  Any community member can come to any meeting to object to any expenditure. 
 If dialog does not resolve the objection, then the issue goes back to GM.  
Although it's rare that we have knock-down-drag-out fights about money at the 
small meeting level, it is true that many of us trend toward either taking the 
issue to GM in the first place, or not even bringing up an expenditure request 
because we know there will be too much controversy.  For instance, finding that 
a donated and much beloved gas grill had finally pooped out, a small set of 
households in one corner of the community shared the expense of buying a new 
one, rather than experience the pain and delay of getting the community to make 
the decision.

We're New Englanders.  We're very frugal.

R Philip Dowds AIA
Cornerstone Cohousing
175 Harvey Street, Unit 5
Cambridge, MA 02140
617.354.6094

     
On Oct 21, 2012, at 1:19 PM, "Douglas G. Larson" <ddhle [at] earthlink.net> 
wrote:

> 
> 
> I posted these questions more than a week ago but got only 2 responses. So I
> am posting again to see if I can get any more.
> The two people who responded originally need not respond again (Sharon and
> Eris). 
> 
> 
> Our community is making changes to one of our bank accounts and we would
> like to know what policies and practices other communities use.
> 
> These questions relate solely to operating expenses, not to replacement
> reserve budgeting or expenditures
> 
> 
> Specifically we would like to know
> 
> 1) How does your community use credit cards and debit cards to pay for
>    community expenses and what controls do you have in place for those
>    expenditures?
>    1a-  Who is authorized to use your community credit card or debit card?
>    1b-  What policies or authorization procedures are in place for use of
>         these cards?
>    1c-  Are your books audited and if so by whom and how frequently?
> 
> 
> 2) What budgeting controls do you have in place for operating expenditures?
> 
>    2a-  Is every operating expenditure checked to see that it is within
>         budget? If so, who does that?
>    2b-  If an expenditure would exceed budget but is deemed legitimate or
> necessary, what override or
>         exception procedures are used?
>    2c-  If a requested expenditure would exceed budget but is deemed not 
>         essential, what denial or refusal procedure is used? Who issues the
> refusal?
> 
> 
> Please limit your responses to only operating budget and operating
> expenditures and not to Replacement Reserve spending. 
> 
> 
> 
> Douglas Larson,
> Songaia Cohousing,
> Bothell, Washington
> 
> 
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