In a Body Corporate, a new Committee is elected at each Annual General Meeting by the Lot Owners. This Committee is responsible for the administrative and day-to-day running of the community, including making decisions on behalf of Lot Owners, and enforcing lawful decisions of the Body Corporate. Committees are comprised of three executive members – the Chairperson, the Treasurer and the Secretary, and Ordinary Members. Here we take a closer look at some of the duties of the Treasurer.
What is the role of a Treasurer?
The Treasurer has various duties in their role as a member of the Committee. While it might be thought that the Secretary and Chairperson’s roles are more visible in the preparation for meetings, the role of the Treasurer is critical. Among the number of vital roles and responsibilities undertaken by the Treasurer in the day-to-day running of a Body Corporate is authorising payment of invoices, allowances or expenses to Committee Members.
A positive relationship with the Building Manager (if there is one), enables the Treasurer to perform this role effectively.
The Treasurer also reviews a draft of the budget as prepared by the Body Corporate Manager and reviews the financials for a scheme. Another duty is making decisions in relation to the investment of Body Corporate funds.
We asked Ken Baldwin, Treasurer for Pier One, what advice he would give to a new Treasurer. “I really enjoy being on the Committee, it is a very rewarding position. To ensure you fill the role successfully, it is important to ensure you are communicating frequently with the Body Corporate Manager and Building Manager to ask any questions you may have. Part of the role of a Treasurer is to review budgets and financials and to also keep an eye on all invoices to be paid before authorising payment on the invoice hub & so it is important that you are across the financials for your scheme”.
What happens if my Body Corporate does not want to take on the responsibility of a Treasurer?
The Treasurer’s duties and responsibilities can be discharged in part by the appointment of a Body Corporate Manager. If you have a Body Corporate Manager, many of your duties may be undertaken by them and the specific duties will be outlined in your agreement with the Manager. It is important to note the Body Corporate Manager is not in charge, they are engaged by the Body Corporate and work under instruction from the Committee.
The Body Corporate Manager can only do what the Body Corporate asks them to, which means they may either be engaged to assist the Committee, or, as is often the case, to perform many of the duties of Secretary and Treasurer. However, the Body Corporate Manager does not have voting rights over any matter and functions only as an administrator. Smaller Strata communities without a Committee may engage and authorise a Body Corporate Manager to undertake all the functions of a Committee. This can also be done for larger Bodies Corporate but is not commonplace.
Treasurer tips and tricks
We asked Marie, Treasurer from Bayview Towers, what advice she would give to a newly appointed Treasurer. Marie expressed the importance of building relationships, understanding invoices, understanding sinking funds and how funds are spent, and being aware of spending and staying within budget limits.
Marie has put together her top tips below:
*Please note: The points below are not a requirement for Body Corporate Treasurers. They’re tips to assist Treasurers who require assistance in the below areas or for those would like to take on additional responsibilities.
- A Treasurer must have a good understanding of accounts and ensure that the approved AGM budgets are carefully adhered to.
- Have a good relationship with Building Managers
– Ensure that they send you quotes for any major work that is proposed.
– Contact them if you do not know what an invoice is for and ask for the invoice to be explained before approving payment.
– Ask Building Managers to inform you if there is any unusual maintenance scheduled for the scheme.
– I save every invoice that I approve, this allows me to keep an eye on expenses and ensure Suppliers are charging correctly. It also allows me to easily search what we were charged in previous years.
– When approving an invoice on the HUB check to ensure it is being charged to correct account number.
– To keep the other members of the Committee aware of invoices that have been approved for payment I have created a spreadsheet that has the following line items 6 headings:
Invoice No & Date
Description of work
SSKB Account No
The Heading of the Spreadsheet contains our current cash flow = cash in bank less liabilities = available funds to pay invoices. I have also added Arrears contributions. This is emailed to the Committee to keep them up to date of how funds are being spent.
- You must be able to understand what a sinking fund is and how funds are to be spent. Ensure that when a new sinking fund is being complied that there are adequate funds to repair / replace sinking fund items when needed.
- When a Committee wants to do work on items such as upgrade the entertainment area BUT there are NO funds available in sinking fund, this work cannot proceed until the current Sinking Fund is replaced. The Treasurer must inform the Committee that there are no funds for this work.
- BUT if a major infrastructure in the building collapses, it needs to be repaired. Although there is not a line item in the sinking fund, this work must be complete immediately because if left it could result in serious structure issues for the building and Workplace Health and Safety issues for the residents. A note should be added to current sinking fund and an item added when the current sinking fund is being replaced.
- Be very aware of spending and staying within budget limits. Inform the Committee if there are issues.
- Be involved in setting budgets.
- Ensure that you have enough funds in the current account to meet Budget expenses.
- Roll over excess funds to term deposits when they are not required.
If you need assistance with any of the roles of your Committee, contact your SSKB Community Manager. They can advise you on the specific roles of Committee members and the unique challenges which may be associated with your scheme.