Based on all of the documents presented in this thread, the management company appears to have been at fault for at least the two following behaviors:
1. They overspent the agreed upon 2022 budget without informing the BOD or getting their agreement.
2. They issued the BOD unapproved minutes without 'draft' being on the minutes to indicate they had not been approved. (The 'draft' also included information that the BOD had no knowledge of.)
While neither of us are privy to the actual communications, do not presume that what the BOD president said in the letter you quoted is accurate. CA HOA law requires the financials be provided at regular increments to the BOD, and what we can see is that the minutes from the July 2023 meeting of the BOD and the financials reviewed at that meeting is that the details clearly disclose the shortfall. It would be quite unusual for similar info to not have been included within the financials for 2022. Simply because the BOD president perhaps did not personally recognize the operating loss until reading the tax return does not mean that the financials did not identify the ongoing losses. If the info was in the financials, the BOD should have paid attention or sought advice to understand the financials if the members did not upon review. From purely a business practice perspective, for the BOD president to say he did not know until reading the tax returns is not credible. The data for the tax returns comes from the HOA financials.
Moreover, it is unreasonable to assume that there is a breach of the management contract by the simple act of the manager paying the bills as they come due, especially for utilities and casualty insurance. There is no obligation to obtain "approval" to pay the bill for insurance if the premium exceeds the budgeted sum. The management contract requires that the manager maintain the insurance for the property and, to maintain that insurance, the manager must pay the bill. Similarly, the utilities must stay functional. Simply because the cost of utilities exceeds the budget doesn't mean that the manager is not authorized to pay the utility bill. The BOD cannot micromanage the project when it comes to third party providers like insurance companies and utility services. It isn't a breach of contract to maintain the property and pay the bills for keeping the doors open and the lights on.
Finally, as to the minutes, no owner has stated whether or not the minutes provided by management had or did not have a "draft" stamp. While the BOD president states in his most recent missive that the minutes were not accurate, the timeline is missing. Details/facts are missing. Keep in mind that the BOD cannot simply bury their head in the sand and reject minutes because they don't like the reality of the situation. If an owner requests the manager provide the draft minutes at 30 days, even if the BOD has not approved them and notified the manager that it wants to modify the minutes, the manager must still provide the draft copy to the owner. The BOD president's letter is more than 60 days after the meeting. No one has provided a timeline of what happened in the 30 days post meeting. We can speculate that there was discussion over the minutes, or perhaps the BOD simply chose to ignore them. The point is no one in this feed has been able to provide any of the details, so whether or not your item #2 is accurate is unknown.
