The Board needs to set a firm policy resolution outling procedures for procuring bids, award of work, etc. From what you desccribe, this board member has acted outside the scope of their fiduciary responsibilities and she should be sent, along with contractor, a cease and desist notice ASAP.  
 
Board also should consider adopting a Board Code of Ethics Policy which elevates each board members responsibilities to the association and community members. Where is your managing agent during all this activity?

Usually you will find words on "contracting" in your bylaws.

Our property manager was not here on this particular day so I am not sure he is aware. Not only is he new to this building he is also a very quiet, passive, non-confrentaional person.

As always, begin with the Bylaws. Under Officers description may be found President - authorized to sign contracts.  
 
Remind board first and then send a letter to contractor stating that the board has not finalized approval of this contract and the insurance D&O insurance requires contracts be approved in an open meeting of the board. (This at least temporarily shields the offending director from personal embarrassment.) The manager may need to contact the vendor to clarify that a contract, along with vendor proof of insurance, must be submitted for board action.  
 
The entire board and the new manager may benefit from a session on proper procedures, etc. Approval for the expenditure of funds should always be a resolution of the board in an open meeting and should designate either that the funds are for a Reserve Fund expense or from the Operating Budget. A reminder too that this is a business and must operate in a business-like manner to ensure protection from any insurance claim or litigation being filed by the vendor at a later date. These steps, including the suggestion above, about a procedure for contracts should be helpful.  
 
Good luck.  
 

It seems logical that in light you do have a board, which should consist of an uneven number of members, that it takes a vote before work can be approved. That vote should also be in the minutes which are recorded for meetings. It should also be the duty of the board to have competing bids, and should compel the board to check the credentials of those bidding, to include, insurance, quality of work, and references. Finally, your board President must take the bull by the horns and insist that awarding contracts be done properly.

Very good post. Most of the time people don't understand what HOA's do and how they run. If you would like to learn more about HOA and how they work. I made a video: http://www.youtube.com/watch?v=WjV00Mtm0bU

I am in a stressful situation with Trustees at my condo. association. I am having new windows installed and because there is brick, repointing might need to be done. I have hired a contractor and the Board is insisting that someone they use inspect the brick. In fact, one Trustee suggested I have the windows pulled out before my contractor arrives to do the work. I was told that, "It's no big deal", which is a bunch of baloney. This Trustee/spokesperson went from telling me that my contract could bid on it to hers would have to do it because "We can't just have someone off of the street, we don't know the their work, etc." This is funny as her contract subs out all his work. It would seem she has promised her contractor something as she is insisting he do some work. This contractor has submitted 2 bids. One was off by $6K and the other is still unclear. I cannot imagine the quality of his work. She insists he is coming and claims I have no say in the matter. It is much more detailed than this. I feel the Board is acting inappropriately and unethically. Do you have an opinon on this and what recourse to I have, if any?