Management and Auditor Reports
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This topic discusses a few "key" reports within the Aspect Property Manager which I think managers should use for "oversight" purposes and which auditors will require. There are also many additional detailed reports which can be called for if circumstances require. You may like to print this topic and pass it to your auditors to assist them.
The reports produced for the auditor should all be printed at month end after all other processing has been completed and immediately before running the End of Period processing.
A few points to make here are:-
The Aspect Property Manager is a period based system. New transactions can only be made in the current period irrespective of the date on the transaction. A period may be any length of time but is typically one calendar month.
Because most Property Managers are not skilled accountancy practitioners journal entries are not available. Our long experience shows that the management fees and GST invariably gets messed up in systems where journals are available. Instead any incorrect transaction needs to be reversed, by entering the same type of transaction with an opposite signed value, then re-entering it correctly. We recommend that you use exactly the same transaction details, (date, reference etc), on the reversing and re-entered transactions as those on the original transaction to make finding such transactions easier. Incorrect Bond Disbursements are one exception which must be treated differently, but still no journals. XXXX Cross reference reqd
Money is primarily received via a tenant account but may also be received directly into a landlord account.
Payments can be made from landlord accounts, supplier accounts, tenant accounts, bond disbursement from the Bond control account, and finally payment from the management fees, letting fees and GST control accounts which is usually a combined payment.
Reconciling the system to the bank statement is a relatively easy process but in an ideal world should not be done by the person collecting and banking the cash. In many situations that is simply not feasible nor is it necessary providing some supervision of this is done on a spot check basis.
There are numerous reports available and I think the following ones will provide you with the overall picture quickly. You may need more detailed reports on individual account which may be, in general, selected by individual landlord, tenant or supplier, for any period or range of periods.
The Cash Book shows every receipt and payment made in the period. Receipts are shown as Cash, Cheque, or Transfer which includes A/Ps, DDs and EFTPOS. Look for negative value transactions. From time to time as a spot check compare the "Cash" and "Cheque" columns to the Receipt book entries to track "over the counter" money. The auditor will want this report.
Check the printed Banking List against the Receipt book entries. I don't think this would necessarily need to be a daily occurrence but a spot check now and again wouldn't hurt. Even if you're not using the Banking List to do your banking it can still be printed for comparison purposes; an alternative is to compare the Cash Book "Cash" and "Cheque" columns to the Receipt book entries.
The Landlords Held and Overdrawn report shows only landlords whose accounts are overdrawn or who have a Hold set on their account. Look into any overdrawn landlord account.
The Landlord Balances report shows the opening and closing balances, income, payments and charges, in summary form, of all accounts which have balances, or which have had transactions during the period. Examine the Balances column, once again looking into any overdrawn landlord account. Print this report for the auditor after making the end of month payouts at which time most accounts will have zero balances.
The Supplier Balances report shows the opening and closing balances, invoices and payments of all accounts which have balances, or which have had transactions during the period. Examine the Balances column, once again looking into any overdrawn supplier account. Print this report for the auditor after making the end of month payouts at which time most accounts will have zero balances.
The Tenant Held report lists tenants where overpaid money is being held in the tenant account.
The next two reports are associated with reconciling the system bank to the bank statement balance and will normally only be required when tracking something unusual or for spot checking.
The Bank Statement Details Report has the system transactions which should match those on the bank statement being reconciled. Note that there may be additional transactions present which occur when corrections are made such as when a receipt is credited to the wrong account and needs to be reversed and credited to the correct account. In this case there must be equal and opposite value transactions and if not questions should be asked.
On a day to day basis the Bank Reconciliation Report is intended more as a working report used to find mistakes when the system does not reconcile to the bank statement and is not one I would expect to be printed on a daily basis. Having achieved a reconciliation it does show any remaining unpresented items. It is a "dynamic" report and because its contents continually change as new transactions are entered it can not be repeated.
The Audit Return gives an overall summary of the trust account as it provides the opening and closing period balances, a total of the money in and out of the account and the unpresented items. It can be used by any Aspect Property Manager providing the internal bank reconciliation process is being used. This report should be printed at the end of the month, just before the End of Period processing but may be printed at any time and provides up to the minute information.
The report is available in two forms, a summary "one page" form suitable for returning to the REINZ, and a detailed form which prints each of the Control account balances and details each unpresented item. This is the version you and your auditor will want. Under normal circumstances I would expect to see a few recently issued cheques, all the landlord and supplier payments just made, (both cheque and DC), at the end of the period. There may also be one or two "over the counter" receipts received which have not yet been presented to the bank. Any "old" transactions should be examined.
The Bonds Held report is mentioned here, not so much as being a required report but rather because it breaks down the bonds being held in the Bond Control account and its total should be compared to Bond total on the Audit Return or the End of Period report and discrepancies followed up. Note this is a "dynamic" report which indicates the situation "now" and can not be repeated once further bond transactions have taken place.
When the End of Period processing is run a one page End of Period report is offered for printing. It may not be of much use for auditing the system as all its financial content is on other reports but it does summarise the various control account balances as well as supplying some statistics. Internal checks are also performed on the database to ensure that its financial integrity is intact and error messages printed if errors are found.
I believe these few reports will provide managers and auditors with details which accurately summarise the state of the trust account without having to print a huge volume of paper. When it is necessary to trace a transaction right through the system virtually all reports, such as individual account ledgers, can be re-printed if they should be required.
When producing the "end of month" reports for auditors remember to print them all just before running the End of Period processing so they all reflect the same point in time.