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I am looking for a bit of guidance on how to interpret the budget proposed by our Strata managers as I think I have a basic misunderstanding of what I am looking at.
My main confusion is that the administrative fund revenue forecast has increased from 900k last year to 1.2m. The actual revenue last year was 910k, while the actual administrative spend fund was 1.07m. I assume the increase to 1.2m is to address the deficit in the administrative fund from last year.
This makes sense, however the deficit seems to be due to the expense for item “Building Management Committee Levies” coming in at 510k actual last year on a forecast of 290k. So my question is what exactly the item is and how could it end up 220k over budget? When I look at the detailed expense line items it is levy payments for the admin fund and capital works being made to a specific lot (perhaps the building management company?).
FTR, I am asking here as it would on face value mean a big jump in fees (already around 1.3% of the property value with no facilitates outside lifts) and I have asked the Strata managers for clarification. They have said that as I am not on the owners committee and its just a proposed budget they won’t provide any clarification outside of the Committee meeting and also cannot provide me with a contact in the owners corporation to raise it with.
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They should be able to tell you the name of the treasurer (if you have one) or at least the chair. If you get nowhere, submit a motion to the AGM that the accounts for the last three years be audited by an independent auditor.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
When I was treasurer where I live, every proposed budget for an AGM was accompanied by a plain english explanation of what the various line items were about, how some came to be a bit over or under budget and drawing attention to any that were proposed to differ significantly from the previous year with reasons given. If the committee or treasurer has not done that, you should find them and ask why not. Furthermore, the managing agent is the servant of the whole Owners Corporation, not just the committee, and they should be able to answer questions of the sort you have asked. Alternatively, the manager should refer to the question to the committee to answer for you.
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