32. Ariel is the executive director of the Coalition for Women’s Survival, a ten-year-old 501(c)(3) nonprofit, tax-exempt organization dedicated to educating young men about the scourge of sexual violence against women. Each year, as part of her job description, she prepares a detailed, balanced budget consisting of income expected and expenses. After much wrangling and give and take compromise, her board of directors approves the budget after making modifications. Once the budget is approved, Ariel perfunctorily files it and ignores it. She feels that the business operations of her organization are too turbulent to be tied to a spending plan that was devised as much as 18 months before spending is required, and that it makes much more sense to see the board-approved budget as a useful guide, but certainly not as a directive. So, she spends as she thinks necessary to achieve the stated mission of the organization, and usually gets close to the income and revenue projects, even though she tends to have little memory of the individual line-items that comprise her annual budgets. So far, no one on the board has caught on to this, and she certainly isn’t going to volunteer anything.
a. Is Ariel acting ethically by ignoring her board’s approved budget?
b. How much flexibility should an executive director have over line item spending before it is ethical to ask the board to approve changes?