NSW: Q&A Duties of Strata Treasurer. Is there a job description?

A newly nominated Treasurer from NSW is wondering exactly what the role entails and asks for specifics about the duties of the Strata Treasurer. Leanne Habib, Premium Strata provides the following response.

Table of contents:

• QUESTION: How many members of a strata committee are needed to approve payment of an owners corporation invoice?
• QUESTION: I can’t seem to find any information on how to set up the trust account at the bank. What should we be aware of?
• QUESTION: Our Strata Treasurer holds a Petty Cash amount which we understand has been spent. We have asked for receipts but he has declined to table a reconciliation. What action can we take?
• QUESTION: What are the specific duties of the strata treasurer and is there a mandatory job description of same that I am able to access?

Question: How many members of a strata committee are needed to approve payment of an owners corporation invoice?

Answer: It depends on the setup for your particular scheme.

It depends on the setup for your particular scheme. Often, the treasurer alone approves payment. The strata committee sometimes arranges for the strata management company to pay invoices only once the strata committee, by majority, approves payment. Further, the strata committee may be limited to a maximum expenditure that may be incurred without referral to a general meeting of the owners corporation.

But in saying the above, incurring the expenditure requires a resolution of the owners corporation or strata committee, depending on the subject item. The above refers to processing payment of an invoice for expenditure already approved by the owners corporation or strata committee as required.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the November 2023 edition of The NSW Strata Magazine.

Question: I can’t seem to find any information on how to set up the trust account at the bank. What should we be aware of?

I am a lot owner (block of 3) and we are looking at managing the strata ourselves.

I can’t seem to find any information on how to set up the trust account at the bank and what we should be aware of – requirements etc.

Answer: Generally speaking, the role of opening the trust account would be the Treasurer’s responsibility

Generally speaking, the role of opening the trust account would be the Treasurer’s responsibility – please see extract of the strata legislation below (emphasis added on 1b):

44 Functions of treasurer of owners corporation

1. General functions The functions of a treasurer of an owners corporation include the following:
   
   2. to receive, acknowledge, bank and account for any money paid to the owners corporation,

The rules for operating and maintaining the trust account for you being self-managed would be different from licenced managing agents as they have obligations under the Property Stock & Business Agents Act and regulations.

Bank account requirements can vary from bank to bank and branch to branch but they are usually very helpful in providing their specific requirements.

We recommend that you have 2 joint signatories (for additional protection and transparency) on the account and pass a resolution authorising such persons to be the signatories (one of whom should be the Treasurer) – the bank will likely want evidence of minutes of meeting in this regard. Alternatively, you could make contact with your preferred bank first and then once they list their requirements, you could prepare motions/resolutions/authorise signatories based on such list.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #470.

Question: Our Strata Treasurer holds a Petty Cash amount which we understand has been spent. We have asked for receipts but he has declined to table a reconciliation. What action can we take?

I have a question relation to NSW Strata Schemes Management Act 2015 Section 93

3. The financial statements for any other fund must specify the following–
   
   1. the fund, and the reporting period, for which it is prepared,
   2. the balance carried forward in the fund from the previous period,
   3. the particulars and amount of each item of income of the fund received during the current period,
   4. the particulars and amount of each item of expenditure from the fund during the current period,
   5. the cash in the fund at the end of the current period,
   6. the balance of the fund,
   7. the extent to which, at the end of the current period, the fund is in debit or credit.

Our Treasurer holds a Petty Cash amount which we understand has been spent. We have asked for receipts but he has declined to table a reconciliation. What action can we take?

Does the NSW SSMA 2015 Sec 93 Part 3 come into play? Does the Strata Manager have any responsibility to ensure the Strata Treasurer provides a reconciliation under NSW SSMA 2015 Sec 93 Part?

Answer: We refer you to relevant sections of the Act.

The role of the Treasurer is set out below:

Section 44 Functions of treasurer of owners corporation

1. General functions The functions of a treasurer of an owners corporation include the following–
   
   1. to notify owners of any contributions levied in accordance with this Act,
   2. to receive, acknowledge, bank and account for any money paid to the owners corporation,
   3. to prepare any strata information certificate,
   4. 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–
   
   1. the delegation is specifically approved by the strata committee, and
   2. the strata committee specifically approves of the function being delegated to that member, and
   3. 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.

The following sections are also relevant, in particular the highlighted areas –

Section 96: Accounting records must be kept by owners corporation

1. An owners corporation must keep accounting records in accordance with this Division. Maximum penalty: 5 penalty units.
2. The accounting records may be made and stored in the form determined by the owners corporation.
3. Separate accounting records must be kept for the administrative fund, the capital works fund and any other fund kept by the owners corporation.
4. The regulations may prescribe accounting records that are required to be kept by an owners corporation.

Section 97 Receipts

1. The treasurer of an owners corporation must, if requested to do so, issue a receipt for each payment received by the treasurer for the owners corporation and must cause a record to be kept of the details of such receipts.
2. Each receipt must contain the information prescribed by the regulations for the purposes of this section.

Section 98 Transaction records

1. The treasurer of an owners corporation must record particulars of money received or money disbursed by the owners corporation as soon as practicable after each transaction occurs.
2. The treasurer must balance the records of transactions and carry the balance forward at the end of each prescribed period.
3. At the end of each prescribed period, the treasurer must compare the entries in the records of transactions with the banking records for the account of the owners corporation and enter in the records of transactions:
   
   1. the amounts credited to the account and appearing in the banking records for which no receipt had been given, and
   2. the amounts debited to the account and appearing in the banking records for which no cheque had been drawn.

 

4. Any necessary reconciliation (showing the balance in the account of the owners corporation as indicated in the banking records, and adding any money received but not banked and deducting any cheques drawn but not presented for payment) must be entered by the treasurer in the record of transactions at the end of the entries for the relevant prescribed period.
5. In this section: “prescribed period” means 12 months or, if an annual general meeting of the owners corporation determines a shorter period, that shorter period.

You will need to check if your strata managing agent has the delegated functions of Treasurer.

If you are unhappy with the Treasurer’s performance, you may wish to consider removing him from his role as Treasurer or from the committee entirely. Obviously, you will need support from the strata committee to reassign office bearers position and owners corporation if you are removing this member from the committee.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #341.

Question: What are the specific duties of the strata treasurer and is there a mandatory job description of same that I am able to access?

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 a 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, as part of the duties as the strata treasurer, 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.

However, before the full extent of your role and duties as the strata treasurer 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.

NSW Fair Trading’s Strata committee page lists the powers and duties of the strata treasurer as:

• give owners notice of any levies
• give receipts, do the banking and account for any money paid to the owners corporation
• prepare any certificates under section 184
• keep all accounting records and prepare the financial statements.

Duties of the Strata Treasurer: 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 part of your Strata Treasurer duties, 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 state that the annual budget is the sum/total of all the following:

1. the amount of contributions levied for the year concerned (whether or not they have been paid),
2. any income of the owners corporation from any other source,
3. 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.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

This post appears in Strata News #154.

Have a question about the duties of the strata treasurer or something to add to the article? Leave a comment below.

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Read next:

• NSW: Q&A Owners Corporation Meetings – Times and Frequency
• NSW: Q&A How long can member hold positions in executive committee?

Are you interested in more about the duties of strata treasurer or other information particular to NSW legislation? Visit Strata Committee Concerns OR NSW Strata Legislation.

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