Misallocation of Funds on Financial Reports

Last year I took a break from my role of Treasurer in a 38 unit Central Coast complex. This year I'm back and some things are concerning me about the events of last year.

Our EC committed to a Garden Makeover last year. It was approved on the basis of a verbal estimate of “about $10k” from our regular gardening contractor. No other quotes were initially considered.

The job total came to $17k, and there was a lot of controversy among many owners because:

a) committee had breached their $10k general limit imposed the owners at every AGM;

b) this garden makeover was not in our budget nor had it been approved by owners at any AGM or EGM;

To complicate things further, one member obtained an independent quote that was significantly cheaper and more comprehensive, and the overwhelming opinion of owners is the gardener did a very bad job. We no longer use this contractor's services and are now in the process of taking this contractor through the CTTT but we're not hopeful of getting much back.

Now the crux of my question: when our financial reports were distributed earlier this year with the AGM papers, I noticed the Garden Makeover sinking fund expense was significantly less (about half) than what I knew to be the total actual cost, making it appear to be under the $10k limit.

I questioned this at the AGM. Our strata manager's response was “Oops, that's my mistake. The balance of the cost is under the 'Driveway Repairs' expense.” and she became very uncomfortable when I questioned her about this.  I voted for an audit to be conducted on the accounts, but this motion was defeated – by people, I believe, were either not interested or did not understand how serious this was. An updated sinking fund expense report was mailed to the OC along with the AGM minutes.

I later learned from one EC member that our Strata Manager offered this as a “workaround” at a discussion at a meeting prior to the AGM “to lessen concerns about the EC breaching their spending limits”. This discussion is not minuted anywhere, and the Strata Manager denies making this offer.

To me it all seems very strange and convenient, so I can only come to the conclusion they tried to hide the real cost of this job from the Owners Corporation by misallocating it as 'Driveway Repairs' on the reports, effectively misleading the Owners Corporation.

How 'serious' is it to misrepresent spending on a financial report?

Do you think this sort of thing is serious enough to be pursued through the CTTT or is it just not a big deal and just get on with life? We're in the process of arranging an EGM to change strata managers, perhaps I should use this EGM as an opportunity to highlight this as an EGM motion and ask again that an audit be undertaken in light of the misallocated spending?

Thanks.