Investigative Journalism and Learning Hub - BCS Strata Management ignored request to explain discrepancies in six-monthly balance sheet on 14 April 201

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From: SP52948 owner
To: Peter Bone BCS Strata Management
Subject: OFFICAL REQUEST: Secretary of the EC to explain six-monthly balance sheet for FY 2013 and another discrepancy in Insurance costs
Date: 14/4/13, 4:04 pm

Hello,
I need three pieces of information from the Secretary of the EC:

a) In accordance with:

NSW Strata Schemes Management Act 1996

Division 2 – Members and office holders of the executive committee

22 What are the functions of the secretary of an owners corporation?

(a) to prepare and distribute minutes of meetings of the owners corporation and submit a motion for confirmation of the minutes of any meeting of the owners corporation at the next such meeting,

(c) to enable the inspection of documents on behalf of the owners corporation in accordance with section 108,

(d) to answer communications addressed to the owners corporation

...

a) In the six-monthly balance sheet for FY 2013 that was published recently, it states that the insurance cost was $77,345.85, which was actually 58.77% higher than what we had paid in FY 2012 ($48,409.75).

The agenda for the AGM 2012 told owners that the increase was 57%, which was misleading and misconstrued. It is close to 3% higher that stated.

But, there is even worse discrepancy. In the web document, here is what is listed for the insurance. We paid $84,414.77 on 21 September 2012, a month before the AGM 2012. The owners were declined rights to know the full figure for the insurance.

If this difference between what was listed in the balance sheet was just the GST component (10%), then we should have paid $85,080.43 ($77,345.85 + 10%). The difference is not 9% either. It is actually a little bit above 9% and the Strata Manager and the EC have refused to provide any explanation in the past.

So, where are these figures coming from and how can they be justified?

And why were owners told the incorrect percentage for rise in these costs when they were known one month before the AGM 2012?

The other questions in regards to our insurance are still outstanding for five months too (proof that no other insurer wanted to insure our complex, details of any possible fees paid to the broker, some items disappearing from the insurance in 2012, and so on).

INSURANCE DETAIL
Insurer Name:  QBE INSURANCE GROUP LTD Policy Number:  836665
Expiry Date:  22/09/2013 Start Date:  21/09/2012
Premium:  84,414.77 Premium Paid Date:  21/09/2012
Broker Name:  GALLAGHER BROKING SERVICES    
       
 
Risk Code
 Description
Coverage Amount
 Coverage Text
BLDG  Building  $99,815,352.00   
CATAS  Catastrophe Insurance  $29,944,606.00   
CONTS  Contents  $998,154.00   
ESCAL  Escalation cost of temp accom  $1,497,230.00   
EXTEN  EXTENDED COVER - RENT/TEMP  $4,491,691.00   
FIDG  Fidelity Guarantee  $100,000.00   
GOVAU  Government Audit Costs  $25,000.00   
LEGEX  Legal Expenses  $50,000.00   
LOR  Loss of Rent  $14,972,303.00   
LOTOW  Lot Owners fixture/improvement  $250,000.00   
OBL  Office Bearers Liability  $2,000,000.00   
PAVW  Voluntary Workers Lump/Weekly  $0.00  200000/2000 
PLIAB  Public Liability  $20,000,000.00   
STORA  Cost of storage & evacuation  $1,497,230.00   
WH&S  Workplace, Health & Safety Bre  $100,000.00   

b)  So far, $19,640.52 was spent for the Solicitor and the owners have absolutely no idea about it (not many owners have web accounts yet).

Not only the solicitor's engagement is illegal, but it is even hidden in the balance sheet for the six months in FY 2013.

I, therefore, request that the Secretary and the EC confirm that they have reviewed the balance sheet and approved the accounting for the first half of FY 2013.

I also request that the Secretary provides an explanation where in the balance sheet (enclosed herewith) are details for $13,986.12 that was paid to the Solicitor on 27 November 2012?

In the Admin Fund the "Legal and Debt recovery Fees" amount to $200.00 only.

These fees certainly cannot get paid from the Sinking Fund, so the "Consultant Fees" of $11,040.00 must have been paid for something else (we need to find out if this was for a payment for the building and construction report that I officially requested in a separate email last week).