You must realize that an HOA is a self-governing entity. There is no "state agency" to appeal to. Under the HOA law, most people resolve disputes with HOAs themselves internally, or via the Court.
In this case, if the owners feel that the Board/officers/directors are acting (a) without proper authorization, (b) with an aim to defraud or otherwise breach fiduciary duty of the HOA, and/or (c) otherwise unlawfully, then they can pursue this matter in court.
The owners may file suit against the Board, and/or the specific officers/directors.
To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state because they all stem from the same common law. A pleading in Court needs at least one cause of action, although it is not unusual to have more than one.
Herein, the owners can sue for (depending on what happened):
-negligence, if the Board/officers/directors are acting despite steps outlined in bylaws/declarations/covenants, and possibly harming the board
-breach of fiduciary duty, if their actions cause monetary harm and damage to the HOA, and
-the owners can also request a receivership, to ask the Court to appoint a RECEIVER with sweeping powers to control and "reset" the HOA, clean out any issues, and call for elections once the HOA is back on track.
Often, the threat of such a suit itself will help resolve the issues. If not, then there is always the option of actually pursuing relief via the Court.
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