Unauthorised expenditure | The Professionals | Flat Chat Forum: Your Questions Answered




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Unauthorised expenditure
Waterloo
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15/02/2017 - 3:56 pm
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Hi All,

Thank you for this forum, there is lots of great advice on here.

What redress does the Owners Corp have when the Strata Manager has spent monies that were not approved? Is the OC able to reclaim the money?  

Thanks in advance.

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Happy Strata
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15/02/2017 - 5:36 pm
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Hi Waterloo,

This is a very broad question. You will need to be clear with:

  •  what was the money spent on?
  •  how much money?
  •  what authority has been provided to the Strata Manager by the OC to act on it’s behalf?
  •  was the expense an emergency, or a necessity?
  •  was is a recurring expense?
  •  did the Strata Committee or any of the office bearers approve it, or were consulted on it?
  •  do you think they were spending it to gain some benefit for themselves?

In our complex there was a feeling that the previous Strata Manager and Building Manager had spent beyond their authority, and had “wasted” money, but proving what they had done, was for their benefit and not that of the complex is very hard. 

Waterloo
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15/02/2017 - 9:17 pm
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Hi Happy Strata,

Thanks for your reply. I will answer your questions as below.

  • what was the money spent on?
  • The money was spent on a building manager
  •  how much money?
  • approximately $9,000 so far this financial year and approximately $12,000 last financial year 
  •  what authority has been provided to the Strata Manager by the OC to act on it’s behalf?
  • None
  •  was the expense an emergency, or a necessity?
  • Neither. The AGM in 2015 approved the trial of three months for the Building Manager. The appointment was to be reviewed by the EC/SC after that and the appointment was to be brought to the next AGM for approval. This was not approved at the AGM.
  •  was is a recurring expense?
  • See above
  •  did the Strata Committee or any of the office bearers approve it, or were consulted on it?
  • To my understanding, No, in fact the SC verbally instructed the SM after the 2016 AGM, that as the building manager was not approved at the 2016 AGM he could no longer continue in that role and should not be paid.
  •  do you think they were spending it to gain some benefit for themselves?
  • The building manager was their employee.

Thank you for your advice.

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JimmyT
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15/02/2017 - 10:20 pm
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The strata manager needs to be told in writing that the appointment of the building manager was not approved beyond the 2016 AGM and they are therefore liable for any payments thereafter and should refund the owners corporation.

What happens next depends on their response.

Waterloo
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16/02/2017 - 8:51 am
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Thank you Jimmy,

I will advise you on the result.

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