Financial statements from Strata

[Wils]

Are there some regulatory requirements for strata managers to keep the financial statements of property their manager in a up-to-date and easy to read state?

At our last annual meeting me and other unit owners spent quite a fair bit of time trying to work out our next year budget.

Only after the meeting was over, we have realised that the financial statements the strata provided to us were not up to date - basically we were trying to match 12 months of expenses vs 9 months of income, which looked like a hole in a budget. To fix the budget the strata manager was pushing to rise the levies.

Two months later one of the owners who is an accountant, is still chasing up with a strata to get use the correct statements (so we can compare "apples to apples"), but with no luck.

So I was wondering - do strata managers are regulated by some government body?

 

[ozsupra]

More importantly they are ruled by the Body Corporate. If you are not happy with the financial records then request an audit (actually a regular audit is common sense) and if the audit brings back a unsatisfactory result (ask for a copy) then dismiss the Management company.
A.

 

[Wils]

More importantly they are ruled by the Body Corporate. If you are not happy with the financial records then request an audit (actually a regular audit is common sense) and if the audit brings back a unsatisfactory result (ask for a copy) then dismiss the Management company.
A.

What will the audit tell us (members of the Body Corporate) we don't know already? The financial records are difficult to read, one of Body Corporate members is an accountant and he confirms that. I am not an accountant, but even I can tell what if the income part of the financials is based on 9 months of data, while spending is based on a 12 months period, these numbers are not directly comparable.

Dismissing the current strata manager is a lengthy process, and we would rather keep them should they start taking the records keeping matter more seriously.

We (the Body Corporate) told it to them (strata management company) several times over last two months, but haven't got updated financials yet.

 

[travelbug]

The audit will make them accountable. Anything that is not up to code will have to be rectified.
When was the last time you had an audit?
Seems like it might be time to get a new strata company.

I can highly recommend Conti Group. Joe Conti helped me with the paperwork to change one of my poorly managed ones. So they manage 2 of mine now. VERY efficient and organised.

 

[Wake]

Yes, strata managers have to comply with the Property Stock & Business Agents Act 2002, and the business has to have an annual audit to ensure compliance for the DFT. This is in relation to trust accounts. This is completely separate from the audit that owners corporations can choose to have each year.

Funnily enough there are no regs that require the records to be easy to read. However, if they are using any computerised accounting software it would be almost impossible to close your record off at the end of the scheme's financial year and only have 9 months worth of income V 12 months of expenses, and certainly a receipts and payments or income and expenditure report would resolve this issue because you would see ALL income and expenditure within the defined period. The only exception to this would be the following example. Levies are due 1st April. Scheme financial year ends 31st March. ALL owners pay their 1st April levy by 31st March. Therefore those levies wont appear on the following years reports even though they were payable in that period. The previous financial year would effectively show 5 quarters of levies due to the pre payment of the April levies.

That is really unlikely though.

With regards to the strata manager supplying the requested financials, they are obliged to provide records in accordance with the Strata Schemes Management Act

STRATA SCHEMES MANAGEMENT ACT 1996 - SECT 37
Procedure for requiring information from strata managing agent
37 Procedure for requiring information from strata managing agent

(1) A requirement for information by an owners corporation under this Division must be made by notice in writing served on the strata managing agent.

(2) The notice must specify a member of the executive committee to whom the information is to be delivered.

(3) The strata managing agent must comply with the notice by providing a written statement, containing the information required, within 7 days after service of the notice.

Maximum penalty: 20 penalty units.

(4) A person is not guilty of failing to comply with a notice under this section if reasonable cause for the failure is shown.

(5) A strata managing agent must not knowingly provide information that is false or misleading in a material particular in a statement delivered in response to a notice under this section.

Wake