CPPSCM5004 — Perform strategic financial management of a strata community

Elements & performance criteria

Performance evidence

• undertaking a strengths, weaknesses, opportunities and threats (SWOT) analysis to determine funding methods for one type of major works related to strata community property selected from the list below:  concreting remediation  installation of solar panels or other energy efficiency initiative  installation or removal of an embedded network related to an existing building  replacement of flammable cladding on a building  replacement of utilities, including water pipes, conduits or cabling  road and street lighting replacement  roof replacement on a building  waterproofing remediation  weather tightness remediation (roof, balconies and walls)
• investigating the strata community’s capacity to fund the above works and the risks and challenges associated with sale of lots over the project life of the major works
• documenting the findings within a long-term financial management plan for the strata community.

Knowledge evidence

• cash flow requirements with regard to levy issue dates
• common discrepancies and non-compliances associated with handling strata community funds held in trust
• compliance requirements of legislation and regulations relevant to strategic financial management of a strata community in the jurisdiction of operation:  civil liability  environmental protection (sustainability)  fair trading and consumer protection  financial probity  privacy  provisions of legislation and funding body requirements that affect how finances and assets can be used by strata communities  records management
• concept of and procedures for financial contingency planning
• concept of strata community control and how it applies to budgetary decision making
• differences between mutual and non-mutual income and requirements for lot owners and strata companies to declare income in tax returns
• distinction between funds information that may be provided to strata community committee members, lot owners and members of the general public
• insurances required to be maintained to mitigate strata community risk
• operation of split budgets relative to strata schemes, including layered schemes
• potential financial management implications relating to the sale or title exchange of strata community property where long-term levies or loans are in place
• reporting intervals and types of strata community financial reports:  balance sheets  income and expenditure statements  detailed expenditure reports  levy position statements
• risks and risk management strategies related to strata community financial management where payment default has occurred
• role and responsibilities of senior strata managers/principals in the strategic financial management of a strata community
• situations in which strata community funds are held in trust:  contractor payments  direct debit payments  discrepancy in strata community account  long-term maintenance works  payment of loans  payment of wages  receipt of interest on investment account  receipt of lot owner’s contribution  receipt of other income to the strata community
• sources of strata community expenditure:  administrative  building  grounds  long-term maintenance planning  utilities
• sources of strata community income:  contribution levies  embedded network  interest: bank and investments  penalty interest  recovered fees or costs  rental income  sale or lease of common property
• thresholds for goods and services tax (GST) related to strata community management:  impact of registration and de-registration on stakeholders  registration requirements and periods
• types of strata community assets and liabilities
• types and typical components of annual budgets for a strata community
• types of strata schemes and requirements for retrospective strata by-law approval
• workplace requirements for performing strategic financial management of a strata community:  systems for storing and retrieving information and documentation.

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Questions about assessing CPPSCM5004