Question: What happens when figures presented by the Strata Manager do not balance/reconcile?
At our AGM, the Statement of Financial Position (Balance sheet) did not balance. The Chairperson stated there was no requirement in the STA for it to be adopted and tabled. Sect 101 says the Strata Company must keep proper records. What happens when figures presented by the Strata Manager do not balance/reconcile?
Answer: Whilst the Act does not specifically state that the financials should balance, it would not be considered a proper record of accounts without it balancing.
There is a requirement under section 101 of the Strata Titles Act for the Strata Company to prepare a statement of accounts for each financial year showing the assets, liabilities income and expenditure. This same section requires that the strata company keep a proper record of accounts.
Section 127 requires the statement be presented to the annual general meeting for consideration.
Whilst the Act does not specifically state that the financials should balance, it would not be considered a proper record of accounts without it balancing.
My recommendation to any annual general meeting that is not completely satisfied by the financial reports being presented is not to accept them. Perhaps a counter motion that the council of owners be authorised to accept the financial statement once all concerns have been satisfied and they are confident that the statement represents a true and correct record of the Strata Companies financials.
101. Accounting records and statement of accounts
- A strata company must keep proper accounting records of its income and expenditure.
- A strata company must prepare a statement of accounts for each financial year showing —
- the assets and liabilities of the strata company at the end of the financial year; and
- the income and expenditure of the strata company for the financial year.
Luke Downie
Realmark
E: ldownie@realmark.com.au
P: 08 9328 0999
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