NSW auditing a strata manager versus police investigation

One vote each, so if you vote for yourself thats it... (I did, so that made 3 votes for me zout of 11, being for 5 spots avail).
I was on the committee for the first year, and I got things done.
But as you state, the old "you don't even live here" argument was used against me !
Strata manager likes the current committee, they don't do much (unless it's in their own intrest) and strata manager takes his fee's and schedule 2&3 fee's but just handballs every call to the expensive building manager, you can guess what company gets all the jobs, same company as the building manager.
As it's not all that old a building the shouldn't be any maintenance, but when there was a hot water pump noise reverberating thru the building committee's reply is not our problem.....
There should be a strata law that says a committee member/lot owner can't be on the committee for any more than two consecutive terms *for lots over 10 or more...

I'd sell out if I could, just waiting until I can turn a profit

 

I agree absolutely. It shouldnt have required a special levy , neither should other "special levies" since then which have no detail provided other than "admin charges".

'Admin Charges" were detailed on previous statements.

~ go figure !

 

Me Trolling ?

What is the name of the Strata Management Company you own please ?

Your posts are very aggressively defensive , even for a guy who states he owns a Strata management Company .

 

It is amazing anyone can last in strata management !

I'm not in that area, but mow their lawns and based on my conversations when at a strata you would think it was 1970 !
A, people are outright lazy, too lazy to use Google to find an answer
B, people are outright stupid, thinking strata/landlord should pay for the dishwasher filter to be emptied

I bet over 90% of all calls to a strata manager are BS nuisance calls for the most part, basic things that people should know/remember
No wonder strata managers can be short on patience
I feel sorry for most of them

@Hot8688 there are just too many details missing, but if you have an hour or two spare pop up to the police station, I bet by the time you get home you will have found the answers here BETTER
If you are on the committee you should have access to view quotes and invoices, or wait for the AGM notice and submit the subject to be discussed at the next AGM
Good luck

 

Not at all.

The Secretary provides the approval for the payment of invoice after they are emailed a copy. Assuming you are on the Committee, get them to email a copy and you can have it shortly. If not, then, contact a Committee member.

 

The worst phone call in my 35 years of strata was a man in his 60s who was on hold waiting, when I took the call he told me the building was on fire and it was the unit above him and could I call the fire brigade. I asked if he had already called he said no, it wasn’t his job. I hung up and called 000. I was the first caller and by the time I arrived at the building the fire brigade was putting out the fire. Over $30,000 damage in 2001 and I couldn’t believe that this man was on hold as he didn’t think it was his job as a strata unit owner to call the fire brigade. Of course being blamed for rapes, murder, domestic violence, theft of body corporate funds, toilets not working, unclean premises etc goes with the turf, but to expect an agent (simple meaning: go between) to be the one available to call the fire brigade is beyond belief. quite simply an agent does what the majority instruct. He can’t get into trouble as the majority have instructed him to do that. But of course individuals don’t like what the majority chooses (Take the USA for example) But if all else fails call the Police or Fire Brigade.

 

OMG .... people!!!

 

Did you ask him what the number for 000 was?

In the next breath did you say that you would have to look up the SM Contract and review the terms of engagement as contacting the authorities was specifically excluded from your agreement (but required confirmation)? You would need to get a quote for the variation of the contract, then call an AGM to approve the expenditure?

 

Hi Hot8688,

We see that you already got some responses.

However, we feel an urge to reply to you with some evidence because generic advice would only work in countries/states with strong laws. Based on our experiences, NSW does not seem to be one of them.

Clause 21 of the Strata Schemes Management Regulations 2016 requires that the accounts and financial statements of the owners corporation with budget above $250,000.00 must be audited before presentation at Annual General Meeting (AGM) in accordance with Section 95 of the Strata Schemes Management Act 2015.

NSW Fair Trading will do as little work as possible and try to pass the duty for strata audits to owners, which would be a perfect option IF (AND ONLY IF) owners were allowed to have information about financial problems. When owners are prevented from having full information, NSW Fair Trading and NCAT (previously known as CTTT) did not take any actions in our complex.

Some of evidence:

1) Our large strata complex did not (and still does not) have auditor's report completed and given to all owners before Annual General Meetings in most financial years.

2) In 2014 and 2015, one of major auditing companies was approached multiple times with complaints about their dubious accounting practices for complex, which included invalid expenses, wrong amounts, and even four fraudulent insurance expenses (in 2017, CHU Insurance forced our complex to repay $8,800.00). The auditor never replied or corrected their mistakes.

3) In 2015, two cases were opened with NSW Fair Trading: 7563482 and 7938059 about auditing problems. The did absolutely nothing. Instead, they recommended that we add Motion for general meeting to engage forensic auditors.

We tried to follow their advice, and strata manager (from one of the largest Australian strata agency) disallowed the motion!

4) Affairs now become even more interesting.

4.1) Annual General Meeting (AGM) on 24 October 2017 did not have auditor's report ready and was not sent to any owner at the meeting or at any time after the meeting. It appeared on strata manager's website two and half years later and contained backdated date of audit as 20 October 2017, but the document did not contain any details of balance, income, or expenditure status.

4.2) Annual General Meeting (AGM) on 18 October 2018 did not have auditor's report ready and was not sent to any owner at the meeting or at any time after the meeting. It appeared on strata manager's website about seven months later in May 2019 and contained backdated date of audit as 18 October 2018 (same day as AGM).

We also logged Police Event E65804633 for forged statutory declaration and affidavit by strata manager (CTTT and District Court), fraudulent insurance claims, financial misappropriations, and other problems in 2018. It took Police many months before they started some investigations. Sadly, around May 2018, they lost USB key with all strata records, then hid it from us and owners in the complex, and simply closed the case. The Police officer got promoted and left that Local Area Command. We submitted to the Police another copy of the USB key, and never heard from them again!

When we found serious errors between accounting figures that owners allegedly approved at AGM 2018 and those that the auditor signed, we approached the auditor. They did not reply.

4.3) Annual General Meeting (AGM) on 19 October 2019 had auditor's report ready and was sent to owners. Strata manager allegedly suffered ransomware attack in early February 2019 and lost most of strata files in Azure cloud permanently. They even claimed details of Bitcoin ransom that was paid by a third-party known to strata manager to the threat actor in the equivalent amount of $5,052.03. We ran forensic investigation of the alleged ransomware attack and found no basis for it (even Microsoft stated they were not aware of such act).

We asked the auditor to update their report and inform owners that they could not have checked any invoices or quotes for period between 1 September 2018 (start of new financial year) and 1 February 2019 when the alleged ransomware attacked happened. They did not reply.

4.4) Annual General Meeting (AGM) on 22 October 2020 did not have auditor's report ready and was not sent to any owner at the meeting or at any time after the meeting. It was prepared by the auditor 13 days later.

4.5) Annual General Meeting (AGM) on 28 October 2021 had auditor's report ready and was sent to owners. Admin Fund had positive balance of only $1,019.14, but three days later on 31 October 2021 it showed negative balance of $120,210.65 without disclosure to owners. Non-compliant committee meeting on 23 September 2021 documented shortage of $1,515,541.00 in Capital Works Fund against the forecast in April 2017 but failed to include it at the general meeting. Strata manager failed to notify owners about flaws in 10-Year Capital Works Fund plans, further delaying overdue upgrades and repairs due to lack of funds.

4.6) Annual General Meeting (AGM) on 27 October 2022 did not have auditor's report ready and was not sent to any owner at the meeting or at any time after the meeting. It was prepared by the auditor 43 days later, with number of errors.

Strata manager allowed $146 million dollar complex to have expired insurance policy for five days, creating high risks for uninsured common property.

Auditor signed financial status by hiding $10,000.00 in accounting figures for legal costs of Solicitor in FY 2022.

We approached the auditor. They did not reply.

4.7) In September 2023, we opened another case 11138875 with NSW Fair Trading, asking them to investigate continuous non-compliance with audits.

On 17 October 2023, they simply responded that they had "educated" the strata manager and closed the case without any serious action. Instead, they asked us to lodge a Motion to replace strata manager, which strata manager refused to add at general meeting one week later on 26 October 2023.

Annual General Meeting (AGM) on 26 October 2023 did not have auditor's report ready and was not sent to any owner at the meeting or at any time after the meeting. It was prepared by the auditor 46 days later, with number of errors.

4.8) Extraordinary General Meeting (EGM) was organized urgently on 30 November 2023 (due to missing Motions at AGM 2023), and auditor's report for AGM 2023 was still not available.

4.9) Auditors report finally appeared on strata manager's website on 14 December 2023.

For Admin Fund, allegedly approved balance at AGM on 26 October 2023 differed from one signed by the auditor by 74.04%.

Strata manager could not provide any justification or proofs for expenses in amount of $122,843.87 (GST excl).

Negative balance in Admin Fund, just five days after AGM 2023, was $312,113.03 without disclosure to owners.

Throughout 2022 and 2023, strata manager refused to provide owners with real status of Admin and 10-Year Capital Works Funds. Even at AGM 2023 and EGM 2023, they refused to comply with with Strata Schemes Management Act 2015 (NSW), Schedule 1, Part 10 (1).
They had to provide copies of administrative fund, the capital works fund and any other fund
of the owners corporation (term deposits are one example), which have to be produced to the owner at least two days before the meeting at which the statements are to be presented. Of special interest was evidence of how strata manager paid invoices from Admin Fund which had negative balance almost 100% of the time during FY 2023. If the money was borrowed from Capital Works Fund, strata manager must have complied with Strata Schemes Management Act 2015 Section 76.

We spoke to NSW Fair Trading again, and in early January 2024, they asked us to summarize these events and due to repetitive failures by the strata managers and the auditors, they promised (we will see how worthy their statements are) to take serious actions.

So, to answer the original inquiry in this forum:

Best option for any strata complex is to have full transparency for documents (invoices, quotes, bank statements, tenders, and so on) that all owners can view, and have strong committee (who carry out their volunteering duties with ethics, care, and professionalism). Do not rely on NSW Fair Trading, NCAT, or Police much in this regard.

Sorry for the long summary. We think it is important to educate the public.

If anyone has any doubt about our statements, please contact us.

 

Who is "we"?

 

Police can pick and choose what they investigate, there is no actual statute or legislation that says they must investigate something, hard to believe.

 

Hi Qak,

Family and a group of owners, who after seeing how slow legal system is, are quite disappointed.

For the record, two different NSW Fair Trading Ministers promised to help in the past (one in 2013 and one in 2017), but that was not followed up by their staff.

Even as we write these notes, it is difficult to accept that our statements are factual.

Best wishes,