Body Corporate Audit

[CB40]

I am not sure if this is the right place to post but I am looking for a CA to answer a couple of questions with regard to the Body Corporate where I reside

 

[xodosman123]

ask the questions see if someone has the answers.

 

[etwylite]

ask the questions see if someone has the answers.

I have a CA mate who assisted me in auditing a complex I have a unit in, pm for details.

 

[CB40]

What would the approximate cost be to have the books thoroughly audited for our complex...there are 25 units in total and no managing agents.Everything is done by the trustees which I am not happy about.

 

[sSslik]

What would the approximate cost be to have the books thoroughly audited for our complex...there are 25 units in total and no managing agents.Everything is done by the trustees which I am not happy about.

Hi

I'm not a CA but have quite a bit of experience on Sectional Title finances. If you want to PM me the info and the questions I can try my hand at giving you feedback.

 

[HavocXphere]

The trustees will not not be happy about it as you are essentially calling them into question. And being trustees, they would have to approve the expense.

 

[Venomous]

Everything is done by the trustees which I am not happy about.

That is WRONG!

The books have to be audited, even if self-managed. Income from fines and other extras are taxable income, though there are exceptions.
They are not permitted to ride wild cowboy with complex funds (limit set during AGM)
Audited figures must be sent to all owners at the latest 30days prior to the AGM, along with a notice that an AGM is to be held.


oh so by the way.... Any/All owners are part of a body corporate. The small group of people, elected by the body corporate to assist with general matters etc are the trustees.

And there should be trustees insurance to keep them and BC safe.

 

[brianj74]

Was chairman of a bc for 5 years so know how the finances work. If you want to send me the agm financials I will have a look for you

 

[CB40]

Was chairman of a bc for 5 years so know how the finances work. If you want to send me the agm financials I will have a look for you

I don't have any audited documents only the proposal they sent out

 

[etwylite]

Finance have to be audited, but tbh, that just says that figures presented fairly reflect blah blah...it doesn't show financial mismanagement or skulduggery, or related party transactions (the maintenance co. is someone's relation etc.) I think we paid around R10k for an independant opinion but I would assume some kind of hourly rate would apply?

 

[brianj74]

All bc should have audited financials presented at the agm annually

 

[CB40]

Finance have to be audited, but tbh, that just says that figures presented fairly reflect blah blah...it doesn't show financial mismanagement or skulduggery, or related party transactions (the maintenance co. is someone's relation etc.) I think we paid around R10k for an independant opinion but I would assume some kind of hourly rate would apply?

Well they told us last year that there was thirty grand in the kitty but is not shown anywhere in the proposal for this year ??

 

[brianj74]

You should also be able to request a breakdown of any of the line items in the finances.

 

[EnT@nGleD]

An audit/review is determined by the Sectional Title rules of every body corporate. The unit owners by unanimous resolution can amend these rules or utilise the generic rules. Normally a body corporate of 10 or more units would require an audit however as said earlier this can be amended. A body corporate of less than 10 units can have an audit or it can be compiled by an accounting officer.

The audited financials does not necessarily mean mismanagement has not taken place. It just indicates the auditor's testing did not bring to light any fraud etc. The auditor does not test every transaction the auditor takes a risk based approach and only makes a selection of items to test based on the risk.

Have audited many body corps. Funds cannot just disappear.

What you are requesting is a forensic audit. This will set you back a pretty penny depending on what you want looked at and how thoroughly e.g. wanting every transaction checked is going to be a very costly exercise. Submit your questions for the AGM/to the trustees and see whether or not the answers you receive in return make sense and satisfy you that they have done things correctly.