Question: What options does a body corporate have when seeking accountability for alleged financial mismanagement by a former strata manager?
Over the past 18 months, our committee has been investigating significant financial discrepancies that appear to have arisen during the tenure of our former body corporate management company. We have sought legal advice and have since engaged a new body corporate management company to assist in reviewing the historical records and accounts. While we have a good understanding of the issues involved and that the financial impact is likely to be significant, we have not yet been able to determine a definitive value of the loss.
We are seeking what options are available to the committee before committing owners to potentially substantial further costs. Would be grateful for any general guidance regarding avenues that a body corporate may pursue when seeking accountability for alleged negligence or financial mismanagement by a former body corporate management company. What practical options are available before committing to further legal costs?
Answer: The audit you need depends on whether the case is headed to a tribunal or the courts.
Changing strata managers was a good move. Legal advice is also good. Will the case be going to the commissioner or to the courts? If it’s the courts, you would probably need an auditor to complete a ‘forensic audit’ which is specifically prepared for legal hearings. This will cost approximately $5,000+GST. Otherwise, a standard annual audit could be sufficient for the commissioner if the auditor knows what to target from the beginning. For this, the cost would be around $1,000+GST, without knowing the full scope.
This post appears in the August 2026 edition of The QLD Strata Magazine.
Matthew Faulkner
Matthew Faulkner Accountancy PTY LTD
E: matt@mattfaulkner.accountants
P: 0438 116 374
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