QLD: Should bank reconciliations show separate admin and sinking fund balances?

Question: Should a bank reconciliation correctly show the balances of the administrative and sinking funds, even if the scheme uses one bank account?

We have one bank account that holds both administrative and sinking fund money. Each month, we receive a bank reconciliation showing the total funds in the bank account, and the total balance is correct.

However, the bank reconciliation reports the administrative fund and sinking fund balances incorrectly. About $140,000 of sinking fund money was withdrawn and invested, but the reconciliation shows this withdrawal as coming from the administrative fund, resulting in incorrect balances for both accounts.

I asked our body corporate manager to fix this. The manager agrees that the bank reconciliation misreports the balances, but says it is not a problem and that we should not rely on it to understand the cash at the bank. They say we should only look at the equity accounts.

Should the bank reconciliation correctly identify the administrative fund and sinking fund cash balances, and if it does not, what record should owners rely on to confirm which fund the cash and investments belong to?

Answer: The equity accounts represent the overall financial picture.

An agent is only supposed to have one reconciliation per bank account. It can appear there are two bank accounts on a balance sheet, split between admin and sinking/capital/maintenance funds.

A term deposit would count as a bank account, but obviously would not need reconciling monthly.

In your situation, the bank reconciliation would be reconciling to the bank statement balance, which would not include the investment. The admin/sinking split is not required.

I agree with the body corporate manager. The equity accounts are what to look at as they represent the overall financial picture.

I’ll end with an example of why the split doesn’t matter. A BAS payment could be coded against GST admin or GST sinking, and it wouldn’t matter. The cash at the bank admin or sinking is the other side of the transaction, and the equity is unaffected. I hope that makes sense.

This post appears in the May 2026 edition of The QLD Strata Magazine.

Matthew Faulkner
Matthew Faulkner Accountancy PTY LTD
E: matt@mattfaulkner.accountants
P: 0438 116 374