When it comes to the time for sectional title schemes to hold their Annual General Meetings, there are certain documents that must be prepared beforehand by the trustees. These are usually compiled with the help of the managing agent and they must be 100% accurate, says Johann le Roux, executive director of Propell.
The documents needed will usually include a budget of the income and expenses for the next financial year, the audited financial statements showing the financial position for the previous financial year and a trustee report which is signed by the chairman of the scheme.
The income statements should include material and non-material expenditure. It is very often that the material expenses will be noted, but the non-physical might be missed, said le Roux.
The material expenses should be broken down and described in detail so as to improve on the budgeting accuracy, he said.
In the financial statements, monthly management accounts must be drawn up. If there are any variances between the actual expense and the budgeted amount, this should be analysed item for item.
All the financial statements should be prepared in the generally accepted accounting principle format, as prescribed by SARS and the Sectional Titles Act and it is also important for the trustees to have comparative statements to spot any anomalies, said le Roux.
“If all this is done properly, there is very little chance of funds “going missing” or not being handled correctly, as any discrepancies will be picked up almost immediately, which safeguards the body corporate’s funds,” he said. “This also gives a clear idea of where the scheme stands financially, whether there are any urgent pressing financial matters that need to be addressed.”