Question: Can a committee secretary approve reimbursements to themself and a spouse, or does the committee need to approve these payments?
Our committee secretary and their spouse pay for and carry out maintenance in common areas. The body corporate reimburses them. As a committee member, I have not seen any reimbursement requests or supporting records.
The chairperson says the committee does not need to approve these reimbursements as a whole, and that approval is only required from the secretary and the treasurer.
Can the secretary approve reimbursements to themself and their spouse, or does this create a conflict of interest? Is there any limit on what can be paid or reimbursed to committee members, given they have received almost $10,000 over the past four years with no transparency?
Answer: When a committee member submits a reimbursement claim, they include the entire committee in the correspondence.
It’s fairly common for committee members to incur expenses on behalf of a body corporate and then be reimbursed afterwards. However, if the reimbursement is not agreed transparently, there will be questions about the probity of the process. By denying basic transparency, the secretary and treasurer shouldn’t be surprised if the inquiry becomes more intense.
As a baseline for transparency, you’d think that the invoices submitted by the secretary should be available to the committee. As a start, I recommend that when a committee member submits a reimbursement claim, they include the entire committee in the correspondence.
Can you access the body corporate records to see what’s in the invoices? It’s not stated, but if you have a managing agency assisting you, they should assist by maintaining records, providing advice and access to this type of issue. If you don’t have a professional manager, it may be a sign that your scheme needs one.
Otherwise, you can go through the dispute process. Perhaps you could submit a BCCM Form 12 to the body corporate, requiring them to provide you with the scheme documentation. Alternatively, arrange to inspect the books and records. You could submit an owners motion to the committee to have the issue voted on. Take the matter to the commissioner’s office, if necessary. Run to replace the treasurer or chair at the next election.
Is there a reason why the treasurer and secretary are being obstructive? Maybe the secretary feels a source of income is under threat. Maybe they find any kind of question hostile, even if it is legitimate. Consider if there is a different way the issue could be approached that would help them to open up. Would the request be more amenable if it came from a different member of the body corporate? It could be that there is no issue with what’s happening, and they are just providing a bit of an odd response.
If and when you can get hold of the invoices, there may well be some follow up questions. Does the appointment of the secretary fit with the legislation? Are you getting value for money, or should you use an alternative contractor?
The immediate thought is that generally, committee members cannot be paid for work they are doing at the site – there is a general prohibition against service contractors being on the committee, so it could be that this compromises the secretary’s position on the committee. Is the committee member being paid for labour or just materials? If it is just materials, that may be fine, but if it is for labour, are they doing so as a registered business? Are they paying tax, or is the body corporate deducting tax? Do they have insurance? You are within your rights to access the invoices, so keep pushing for this, and when you have them, see where that leads.
This post appears in Strata News #785.
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
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