Management's previous long-term Auditor, PKF were quite explicit in their annual 'Auditor Reports' opening address to the residents and residents committee, listing 'Respective Responsibilities' as to who is responsible for the end of year statement and if the accounting policies are appropriate to meet the needs of the residents and the residents' committee.
It is Australian Retirement Holdings P/L ("the Operator") who is responsible for the statement and it is ARH that have determined that the accounting policies used, are appropriate to meet the needs of the residents/residents committee.
It is certainly debatable, whether the financial reporting, now or historically, has met the needs of the residents and/or the residents committee. The Operator has never provided a reconciliation of the capital works fund in his end-of-year financial reports.
The Auditor (PKF) goes on to say, "No opinion is expressed as to whether the accounting policies used are appropriate to the needs of the residents and their committee."
As we, the residents pay for the audit service, one would readily assume that the auditor, PKF, would automatically assess whether the accounting policies used by the Operator, are in fact in the best interest of the residents and are appropriate to the needs of the committee.
Secondly, as the 'Capital Works Fund' is one of the larger accounts to be examined and should be front and centre in the auditor's firing line, why has the auditor not reported any activity or movements of large expenses allocated to the Capital Works Fund, specifically during the 2020-21 and 2021-22 financial years.
Expenses such as (BUT NOT LIMITED TO): -
- Upgrade to electricity meters - $77, 684
- Interlinked - Managed access points - $31,665
- Managed 24/7 Tech Solutions - $75,020
Add to this, the issue of the 2021 'Surplus to Budget' amount over $90,000, which again was not shown in the following year's proposed budget, to show residents that the 2021 'surplus to budget' was carried forward correctly, and again was NOT reported to the residents, in PKF's audit reporting. One can only ask the question, "WHY".
The immediate past 'Residents Committee' was puzzled as to why the Auditor PKF, had not noticed, or identified that the '2020-21 Surplus to Budget' amount of $90,194 was not shown to be brought forward in the following years (2021-22) proposed budget so that residents could see that the said surplus has been carried forward and accounted for correctly.
Residents have a right to be concerned
It is inexplicable how the Operator's preferred auditor PKF, employed to watch over the resident's accounts, has failed to report to the residents, very large expenses (hundreds of thousands of dollars), have been allocated to the residents 'Capital Works Fund', without their knowledge or consent. Further, not a mention of the 2021 surplus to budget amount of $90,000, in any of the subsequent PKF audit reports.
To further compound this issue, the Operator failed to provide any information on the expenses that he has allocated to the Capital WorksFund (CWF) in his end-of-year audited financial reports for those years in question. He has failed to provide any reconciliation of the CWF, and refused to provide a copy of the CWF bank statements requested by the residents committee, for those years. Making it as difficult as possible to keep track of the balance of the CWF on behalf of the residents of the village.
In combination, this lack of detailed end-of-financial-year reporting by both the Operator and PKF the auditor, has allowed the allocation of very large expenses to the resident's CWF to go undetected for several years, which in turn makes it very difficult to recover funds that may have been incorrectly allocated to the residents CWF.
