A newly nominated Treasurer from NSW is wondering exactly what the role entails and asks for specifics about the duties of Strata Treasurer. Leanne Habib, Premium Strata provides the following response.
Question: What are the specific duties of strata treasurer and is there a mandatory job description of same that I am able to access?
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I have just been nominated Treasurer of a Strata Plan Owners Corporation registered in NSW. I have been in similar roles in the past but not managing the financial affairs of a residential body corporation. The Owners Corporation I belong to does employ the services of a Strata Manager.
My question is, what is the specific duties of strata treasurer in this instance and is there a mandatory job description of same that I am able to access?
Also, whilst the required yearly, financial statements are received by the Owners Corporation from the strata manager, I have noticed that in the past, bank statements/investments certificates etc. have never been received or asked for by past committees. The reason for this appears to be unclear. However, I should point out that because the corporation’s bank accounts/deposits total under $200,000, discretionary audits have always been waived by the Owners Corporation, to save on costs. In this instance, would it be prudent to request regular bank statements etc. from the strata manager in order to satisfy reconciliatory requirements and complete the checks and balances processes?
Answer: Before the full extent of your role can be ascertained you must review the strata management agency agreement.
Generally, please see Section 44 of the Act:
44 Functions of treasurer of owners corporation
(1) General functions The functions of a treasurer of an owners corporation include the following:
(a) to notify owners of any contributions levied in accordance with this Act,
(b) to receive, acknowledge, bank and account for any money paid to the owners corporation,
(c) to prepare any strata information certificate,
(d) to keep the accounting records and prepare the financial statements.
(2) Delegation by treasurer of functions The treasurer of an owners corporation may delegate the exercise of any of the treasurer’s functions (other than this power of delegation) to another member of the strata committee of the owners corporation if:
(a) the delegation is specifically approved by the strata committee, and
(b) the strata committee specifically approves of the function being delegated to that member, and
(c) the delegation is subject to any limitations as to time or otherwise that the strata committee requires.
(3) While a delegate is acting in accordance with the terms of the delegation, the delegate is taken to be the treasurer of the owners corporation.
(4) Strata committee may require treasurer to exercise functions jointly The strata committee of an owners corporation may, by a written notice given to the treasurer of the owners corporation, order the treasurer not to exercise any of the treasurer’s functions that are specified in the notice unless the treasurer does so jointly with another person so specified.
However, before the full extent of your role can be ascertained you must review the strata management agency agreement. Your role will be limited (if not redundant) if the strata management agency agreement applicable to your scheme delegates full authority to your strata managing agent. In case of a limited delegation, check the agreement as you will be responsible for the non-delegated tasks.
Monitoring Banking Records
It is a matter for the Owners Corporation to what extent they wish to monitor their banking records. Generally, if an audit is conducted, all such banking information will be reviewed on an annual basis. In the absence of an audit, you may, as Treasurer request these documents on a monthly, quarterly or annual basis for review on behalf of the Owners Corporation as appointed treasurer.
Under the new legislation, the budget would need to exceed $250,000 or the scheme would need to be a large one, for an audit to be mandatory:
95 Auditing of accounts and financial statements
(1) The owners corporation for a large strata scheme, or a strata scheme for which the annual budget exceeds $250,000 (or another amount prescribed for the purposes of this section by the regulations), must ensure that the accounts and financial statements of the owners corporation are audited before presentation to the annual general meeting.
(2) The owners corporation for any other strata scheme may determine that the accounts and financial statements of the owners corporation are to be audited.
(3) An audit of the accounts and financial statements of an owners corporation under this section must be carried out in accordance with the Australian Auditing Standards.
(4) The regulations may specify the manner in which the annual budget of a strata scheme is to be determined for the purposes of this section.
The 2016 strata regulations states that the annual budget is the sum/total of all the following:
(a) the amount of contributions levied for the year concerned (whether or not they have been paid),
(b) any income of the owners corporation from any other source,
(c) any other amounts held by the owners corporation for the purposes of the owners corporation.
The below may assist in determining if you need an audit:
- If your plan has substantial savings ($250,000 or more), you need an audit
- Where your budget exceeds $250,000, you need an audit
- Where your plan receives substantial income from other sources for things like rental of common property, you need an audit.
This post appears in Strata News #154.
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
Are you interested in more about the duties of strata treasurer or other information particular to NSW legislation? Visit our FactSheet: Strata Committee Concerns OR FactSheet: Strata Legislation NSW.