STRATA PLANS NEWS ALERT13-Dec-2016
WITH BUDGETED LEVIES OVER $250,000
The Strata Schemes Management Act 2015, which was recently introduced by NSW Fair Trading has issued mandatory audit provisions for all strata plans with budgeted Levies of $250,000.
The old Act defined a large scheme as having 100 lots or more which required mandatory audit. Section 95 of the New Act refers to any strata plan with budgeted Levies of over $ 250,000 must be audited.
From our understanding of section 95 of the Act, the key date of introduction of compulsory strata Plan audits is the AGM date not the functional year of the strata Plan. Any AGM held after 30th November 2016 which has current (or budgeted) levies of over $250,000 must be audited.
What constitutes annual budget to be included for calculating compulsory audit.
The sum of the following items are included in the calculation of the annual budget:
- Budget Levies (including special levies)
- Any other income, such as: interest received, rental income, insurance receipts, legal settlement and disposal of common property.
- Opening balance cash held (including cash at bank and investments)
EXAMPLE: - If strata plan XYZ which has an AGM scheduled for 1st of December 2016 at the start of the financial year had $55,000 cash at the bank and $75,000 in investments (term deposit). The budget Levies is $100,000 (doesn’t have to be paid) insurance claim is $15,000 and legal settlement of $50,000. Therefore the annual budgeted Levies is $295,000 and is required to be audited.
Strata managers need to be aware of the new legislation and ensure their strata plans comply with the latest ACT.
At Simeoni we have developed a streamlined strata plan auditing service, to minimize any disruption to strata managers.
The process will be tailored to each strata agency to ensure we blend into your system.
We offer a fixed price and a guaranteed completion date (subject to complete records being provided).
In summary Simeoni can offer the following:
- Fixed price audits
- Guarantee to complete the audit by the required deadline
- Tailored services to your systems
- Audit by specialized strata plan audit firm with over 20 years of experience.
- Free advice on strata matters during the year
- Additional services specializing in strata plans include: Taxation – Accounting – BAS
For any enquiries about our services please contact us to see how our accounting experts can help.