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| From: | SP52948 owner |
|---|---|
| To: | info@hayesknight.com.au (Accountants & Business Advisers) |
| CC: | Mario Raciti Bamfield & Co Accountants & Auditors, Russell Young BCS Strata Management, Bruce Copland, Moses Levitt, John Ward, Stan Pogorelsky, Jeffery Wang, Steve Luxmoore |
| Subject: | HIGH PRIORITY REQUEST Audited accounts for SP52948 incorrect and some even illegal by BCS on 15Nov2014 |
| Date: | 15/11/14, 9:28 pm |
Hello,
To whom it may concern
On 10 October 2014, Raine & Horne Strata (now BCS) sent you a letter confirming the responsibility for Annual Audit 2014. Among the other statements, BCS claimed that there were no instances of non-compliance with laws and regulations that could have a material effect on the financial report and no fraud or suspected fraud affecting the entity involving management and employees.
The facts are quite different.
1. Firstly, apart from numerous emails to BCS and members of the Executive Committee, Bamfield was notified about wrong accounting summary for FY 20013 on the following date:
13 November 2013
In it, I highlighted numerous accounting errors and even expenditures against the By-Laws of Strata Plan 52948 (refer to attachment with original inquiry).
Reply was never received.
I resent another one during this year to Bamfield and again received no response.
Very "professional" attitude.
2. One of the illegal payments were reimbursements for gas to selective townhouse owners.
In fact, water and gas reimbursements to selective townhouse owners were applied (and then hidden in accounting books) for 14 years without Special Resolution or By-Law.
Based on my investigations, Raine & Horne Strata Sydney and EC rushed to "approve" Special By-Law, which was registered in May 2013, but continued to be applied in illegal way until October 2014.
3. In our phone conversation on 30 September 2014 at 14:43 hours, Raine & Horne Strata Sydney confirmed that all townhouse owners would be issued with notices of repayments of excessive and illegal water and gas reimbursements since Special By-Law 13 was registered on 6 May 2013. That was just the starting point for repayments that have been illegal, unauthorised, excessive, and unreported for 15 years to all owners.
4. The audited errors for FY 2013 are still unchanged and incorrect.
But, to make things worse, they are wrong for FY 2014 too.
Three examples:
* Total expenses for gas usage was for the common property $24,598.68 (1 September 2013 to 31 August 2014). To it, add $5,112.01 for gas usage reimbursements paid for private usage to 18 out of 26 townhouses (as per Special By-Law 13), which makes the final figure of $29,710.69. To make things worse, SP52948 claimed seemingly claimed ATO GST tax for paying owners from common funds to which they contribute.
In your audited account, the total gas usage in FY 2014 is listed as $23,404.00, making it the error rate for real expenses in the balance sheet of around 26%. Not only there is an error, more critical is an issue that the reimbursements were applied against the Special By-Law 13, which is confirmed in frantic Motion 18 and 19 for the AGM 2014, in attempt to "ratify" the illegal activities retrospectively, without giving owners information about the nature of the deliberate errors (see attachment with applicable Motions).
I am sure you are smart enough to question why would anyone rush with some urgent Motions if "everything was in order". That now questions your responsibility to act.
* Real electricity usage expenses amounted to $83,730.83 (GST exclusive) but in the audited balance sheet it shows $80,371.69.
* Real water usage expenses were $91,252.70 (GST does not apply). Add to it the water usage reimbursements to selective townhouse owners in amount of $6,922.46 (but number of them were applied illegally - see my document), making it total of $98,175.16. In your audited balance sheet, they show up as $111,951.04. This is er error margin of around 14%.
I am not going to provide you with details of other accounting errors in the balance sheet that were provided to owners for the AGM 2013 and 2014 because it is your job to ensure they are correct (or rather, job of Strata Manager and the EC). I have them ready for the AGM 2014.
5. Raine & Horne Strata Sydney (now BCS) and the EC members engaged in numerous financial and facilities management actions agains the laws. For example, it is a fact that in 2005, without the approval of the owners corporation and the official EC decision, more than $43,000 dollars disappeared from the common funds for alleged building painting. The accounting details and evidence that anybody approved such expense have been declined for 10 years now.
We all have to live with our decisions and, eventually, everybody gets what they deserve.
As an auditor who charged more than $2,000 dollars for the AGM 2014, I expect and request that Hayes Knight urgently takes action before the meeting on 26 November 2014. I also expect a response with details what you intend to do to investigate my claims and recheck all accounts.
Not responding or ignoring my email (like Bamfield did last year) is not an option any longer. I will take actions in accordance with law promptly. Relevant bodies will investigate whether there are any financial mismanagement issues.
I am Cc-ing the Strata Manager and the members of the EC because there is nothing I need to hide.
Sincerely,