Overbudget again | Executive Committees | Flat Chat Forum: Your Questions Answered




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Overbudget again
Billen Ben
Flat(chat)Mate
Members
06/07/2011 - 8:44 pm
Member Since: 05/05/2011
Forum Posts: 233
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Thanks random; some sound recommendations.

The situation was that the 2009/10 admin budget went $5k into deficit and then the 2010/11 AGM approved a budget that was about $15k less than the 2009/10 admin budget with the same expected expenditure. It seemed obvious the admin budget would go well into deficit again.

I just got the auditors report (large SP) and the admin budget went over $18k into deficit in 2010/11.

In a s162 application i included the auditors report for 2009/10 and showed the budget seemed ridiculously small and that a deficit seemed very likely again. Poor financial managment meant nothing to the adjudicator and did not even get a mention.

This is one of those SPs where most people have no idea, AGMs are very hostile environments, as long as there is money in the bank no one really cares what is going on financially and penny pinching at an AGM is an owners duty.

There was enough money in the sinking fund to cover debts but the idea the money was being spent from the other fund and needed replacing as required by the Act is a concept the EC would never accept. OC funds are like a general revenue coffer to the Treasurer, it is all OC money and there is no real distinction between the funds.

The OC is run by a dominant clique whose attitude towards compliance is poor, replacing the EC is not an option; the only real hope was a s162 order but that failed.

What do owners do when they can see it coming and nobody wants to know about it? I think Jimmy T may have answered that one in another topic; time to move out.

Unfortunately anyone who does a strata inspection is likely to be shown the SP has compliance issues that lead to the erosion of equity and so the whole financial issue devalues a units worth if it does not completely dissuade a buyer.

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