A Body Corporate levies money from lot owners to pay for its expenses to maintain the common property and take out the mandatory insurance policies.
Some key information about keeping proper Body Corporate accounting records is below.
Doing an inspection of your Body Corporate's records from time to time can ensure you are aware of any 'red flags' indicating proper accounting records are not being kept.
Body Corporate Bank accounts:
General bank accounts and term deposit bank accounts must be in the Body Corporate’s name.
The Body Corporate can resolve to authorise 2 committee members to jointly operate the bank accounts.
Invoices records and GST compliance:
Invoices paid by the Body Corporate must be in the name of the Body Corporate (not the body corporate manager or building manager), and clearly state if this is a tax invoice that includes GST (Goods and Services Tax) and Australian Business Number (ABN) requirements are met.
The Australian Taxation Office will only allow GST refunds to the Body Corporate if the invoice is made out to the correct entity and includes all relevant details.
The Body Corporate must keep invoice records for 7 years. Invoices can be saved digitally or kept as hard copies.
The ATO can conduct a GST audit of the Body Corporate at any time. Therefore, it is critical for Body Corporate to keep invoices records (7 years).
The Committee can request an audit of the accounts from previous years.
Committee(s)/Owner(s) can request a copy of an invoice for example, for the last 5 years.
Handover when changing managers
When their engagement comes to an end, a Body Corporate Manager must handover all the books and records including all accounting records.
If the Body Corporate resolves to give their financial institution written notice in the approved Form 2 that the body corporate manager’s contract has ended, the financial institution must not allow the manager to operate the account and the person(s) nominated in the notice may operate the account.
The Form 2 notification to financial institutions holding Body Corporate funds can be downloaded here: