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  • #72064
    WoodWalker
    Flatchatter

      We are a 10 unit class B Unit Plan in Canberra.

      In the Financial Statement presented at the AGM our current Strata Manager provided a word table with 10 or so rows showing a summary of expenditure in the previous year. Some of these rows were things like: “Management fee – Work out of scope ~$2.4k” with no break down of what work was actually done. This summary table was NOT supported by a ledger showing all transactions (date, who, purpose and the credit or debit amount).

      We put an amended motion to “NOT to accept the Financial Statement until the full ledger was provided.” We quoted part 2.1 section 2.1 of the UT(M)A to no avail:

      2.1 Executive committee must keep minutes, and records and accounts
      (1) The executive committee of an owners corporation must—
      (f) keep proper records and books of account in relation to—
      (i) the corporation’s assets and liabilities (including all amounts owing to and by the corporation); and
      (ii) all amounts received and paid by the corporation; and
      (3) The executive committee must keep the documents, records and books of account for at least 7 years and make copies available for inspection on request by any member of the owners corporation.

      The SM said that in their 14 years of strata management, everyone prefers the high-level summary and no-one wants to see the actual transactions. If we passed the amended motion they would provide the ledger but at a cost. When asked what the cost would be, the reply was words to the effect of “We are not going to be jerked around by you. We will generate the ledger and charge you whatever it costs.”

      * Does anyone have a similar experience of being denied access to the ledger in the Financial Statement?
      * How did you proceed?
      * Is it worth the fight to see where OUR money is actually being spent?

      Feel free to send me a message if you want to discuss this offline.
      Enjoy the new year,
      Woodwalker

      • This topic was modified 1 month, 1 week ago by .
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    • #72065
      Jimmy-T
      Keymaster

        Feel free to send me a message if you want to discuss this offline.

        Only if you feel you have to name a company, please! The whole point of this forum is so that others can benefit from your experience and opinions. That’s why it’s anonymous.

        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.
        #72070
        Sir Humphrey
        Strataguru

          Where I am, a much larger class B strata in Canberra, we also just present the higher level summary of income and expenditure totals against the budget. As treasurer, I write some commentary about the sorts of things covered in categories that might be less obvious and explanations for things that are substantially over or under compared with previous years or expectation. Through the year, I keep track of the individual items ledger because it is not uncommon for our managing agent to put an expense against the wrong budget line.

          At the very least, your executive committee should have access to the detail and should demand it of the managing agent. A function of the treasurer includes keeping track of this stuff and a function of the EC is to supervise the treasurer. The EC cannot perform its function without this information from the managing agent. The EC should politely but firmly remind the managing agent that it works for the Owners Corporation, whose functions are exercised by the EC. The managing agent is not the boss.

          Since your general meeting has directed your EC to provide that detail. If the managing agent obfuscates then the next step might be for the EC to engage an auditor to check the accounts and get that detail out of the managing agent.

          • This reply was modified 3 months, 2 weeks ago by .
          #72075
          WoodWalker
          Flatchatter
          Chat-starter

            Jimmy-T, I totally agree, we can all benefit from the experience and knowledge of others without knowing names and identities.

            BUT I find it a lottle hard to believe that all the committees and treasurers that this manager has worked with over the last 14 years are happy NOT seeing the raw ledger of transactions.

            #72076
            kaindub
            Flatchatter

              On the issue of getting an audit.

              Have the committee appoint its own auditor. The auditor that the strata manager puts forward will be their regular auditor. The auditor provides favourable audits in order to keep the strata managers business.

              Secondly , the auditors appointed by the strata managers are chosen on a price. You’ll find their reports full of qualifications, to the extent that you can’t rely on anything the auditor reports.

              Your own auditor will not only check your accounts, but will check the veracity of the processes used by the strata manager.

              Remember that it’s usual that the accounts of your strata are managed by a person who knows how to drive the software, but has little accounting knowledge.

              #72089
              Jimmy-T
              Keymaster

                I find it a lottle hard to believe that all the committees and treasurers that this manager has worked with over the last 14 years are happy NOT seeing the raw ledger of transactions.

                If you are suggesting that Flatchatters use personal messages to find out if they have been diddled by the same shonks, that’s fine by me.  But you seemed to be inviting people to “discuss this offline” which is what bothered me.

                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.
                #72105
                WoodWalker
                Flatchatter
                Chat-starter

                  Sorry for the ambiguity … only the first option … it seems to me that many service providers can get away with dubious practices in the certain knowledge that their clients are (mostly) isolated and can’t compare notes and share experiences.

                  Wouldn’t it be wonderful if there was some sort of reverse strata lookup wiki … there be dragons there!

                  If you have a Canberra based strata manager who refuses to provide the EC with the full ledger unless a fee is paid and then refuses to say what the fee is, please contact me … we may have much to share (including the same manager).

                  And thanks Jimmy-T for providing this platform,

                  #73255
                  WoodWalker
                  Flatchatter
                  Chat-starter

                    A quick update on our situation:

                    • our Strata Manager presented a Financial Statement to the AGM which did not include a ledger of all transactions and only a summary in a Word table (19 Dec 2023)
                    • we asked questions about some of the totals that did not seem to make sense (to us). We also asked for the underlying ledger and were told that the ledger would be produced at a (unspecified) cost to the OC
                    • the SM did not generate or send the AGM minutes to all members within the required 14 working days
                    • on 20 Feb our strata committee asked (in writing) for the ledger or the reasons why it could not be provided and the AGM minutes
                    • 2 days later we received a termination letter with 7 days notice
                    • our new Strata Manager requested the books on 6 Mar and is still waiting …

                    The end of the relationship was a lottle brutal.  It appears that our relationship with the old SM was not one where they saw that it was the Owners Corporation that employs the Strata Manager to help manage OUR affairs.

                    Of course, this history is from our Strata Committee’s perspective. I am sure our old SM has a different view.

                    I am thankful that this forum provides a place for owners and residents to share their experiences of strata living.
                    Woodwalker

                    #73360
                    fchat56
                    Flatchatter

                      As this forum is for sharing experiences and educating owners, here is some information that will possibly shock some readers.

                      Your experience with not being allowed access to full financials is very frequent. It is a perfect way for strata managers (and committee members if they allow it), to hide financial mismanagement.

                      At least in NSW, strata laws are very weak to enforce proper financial audits for strata complexes. Owners have very poor chances to enforce better financial management UNLESS they have strong and ethical committee members. To rely on Fair Trading and NCAT is a waste of time and resources.

                      Let us back it up with some verifiable facts for one large strata complex in Sydney (218 properties). We will only list recent events, as they go all the way back to 1999.

                      a) Large strata complex was recommended to engage forensic auditors in NSW Fair Trading case 7563482 on 19 May 2015. Strata Manager and committee members ignored it.

                      b) Large strata complex in Sydney was recommended to engage forensic auditors in NSW Fair Trading case 7938059 on 9 October 2015. Strata Manager and committee members ignored it.

                      c) Annual General Meeting on 20 October 2017 did not provide audited accounts to owners. It was published two and half years after due date without any financial details in late April 2020 but backdated to 31 August 2017! It was full of errors and did not have details of what the auditor really signed off.

                      d) An owner offered FREE access forensic audit (would cost owners nothing) but strata manager and committee members prevented it in June 2017.

                      e) Annual General Meeting on 17 October 2018 did not provide audited accounts to owners. It was allegedly signed off on 18 October 2018 (1 day after due date) but not published until late May 2019. It was full of financial errors.

                      f) Annual General Meeting on 22 October 2020 did not provide audited accounts to owners. It was published on 3 November 2020 (13 days after due date). It had financial errors.

                      g) Annual General Meeting on 27 October 2022 did not provide audited accounts to owners. It was published on 7 December 2022 (43 days after due date). It had financial errors.

                      h) Annual General Meeting on 26 October 2023 did not provide audited accounts to owners. It was published on 11 December 2023 (46 days after due date, but only made available on 14 December 2023, 49 days after due date). It had financial errors.

                      i) Two NSW Fair Trading cases were opened for this in 2023 and 2024:

                      In first case 11138875 they confirmed the strata manager was not compliant with Clause 21 of the Strata Schemes Management Regulations 2016 which requires that the accounts and financial statements of the owners corporation with budget above $250,000.00 must be audited before presentation at Annual General Meeting (AGM) in accordance with Section 95 of the Strata Schemes Management Act 2015. Strata manager and committee members refused to share this information with owners.

                      The second case 11204124 is underway.

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