Business Support Fund
The committee of management, which is made up of lot owners or their proxies, is represented by the Body Corporate manager. The committee directs the Body Corporate manager to carry out the decisions it makes on a range of financial issues relating to the management of the common property via decisions made at committee meetings. The Body Corporate manager subsequently follows the committee’s instructions and completes the responsibilities assigned through the meeting minutes, the body corporate audit examines the financial elements and choices taken during these sessions.
The management of the Body Corporate is governed by a contract of appointment of the manager and the services are provided by the various contractors who in turn hold contracts with the body corporate for services like upkeep and cleaning of the shared assets. As part of the body corporate audit we shall run tests to determine if the management fee has been charged in accordance with the appointment agreement as well as Payments to contractors are made strictly in line with agreements.
Sometimes mixed-use buildings may have multiple Body Corporates and this might give rise to the requirement to run multiple body Corporate audits. Any body corporate audit engagement comes with a substantial focus on cost allocations and record keeping.
The body corporate’s responsibilities include managing the common property, repairs and maintenance. They must also maintain accurate financial records and prepare the financial statements.
Every year, prescribed body corporations are required to conduct a body corporate audit of their financial records. Prescribed Body Corporates are those that have more than 100 lots. This covers parking lots, storage facilities, townhomes, apartments, and retail and commercial properties.
An audit of the financial statements gives the owners and management of the owner’s corporation assurance on the financial statements, even if your body corporate is not a specified body corporate. Managers can present the audited financial statements at the AGM’s.
The committee may decide to undertake a voluntary audit, even though it is not required by the Body Corporate, in order to guarantee trust in the administration of the Body Corporate’s business to report to the other non-participating lot owners at AGMs.
THE BENEFITS OF A BODY CORPORATE AUDIT ARE AS FOLLOWS:
- Getting an unbiased, professional assessment on the accuracy and justice of the financial statements
- Detection of any errors
- Ensuring compliance with accounting principles & standards
- Detection & prevention of any fraudulent activity
AFTER ALL, THE FOLLOWING MAY BE NEEDED TO COMPLETE AN EFFECTIVE AND EFFICIENT BODY CORPORATE AUDIT:
- Access to accounting software or the general ledger
- Income and Expenditure Statement
- Balance Sheet
- Copy of the prior year’s audit report
- Trial Balance
- Invoices and receipts for money received during the audited financial year
- A copy of the plan of subdivision
- Members Register
- Invoices paid during the financial year
- Bank statements obtained over the audited financial year
- Statement of insurance for the asset under audit
- Minutes of every meeting held over the audited financial year
- Approved budgets for the financial year being audited
- Contract of appointment of the manage
- Copy of Business Activity Statements (if applicable)
ONLINE BODY CORPORATE AUDITS:
The process to audit the fund of a Body Corporate can be carried out completely via correspondence. The advent of cloud-based reporting and accounting makes the process far simpler than earlier when an auditor would spend hours in person with the manager of the OC. One of our auditor’s shall be in touch with you requesting preliminary information to prepare an audit plan and based on this audit plan further documents shall be requested. These could be copies of invoices, contracts and minutes of meetings and using these supporting evidences we can complete the audit of Body Corporate completely via correspondence.
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