What each part of a BC strata corporation's financial statement tells the council, and the questions worth asking before the AGM.
Strata council financial statements in British Columbia can look like a wall of numbers, but they answer a small number of questions: how much money the strata had, what came in, what went out, and what is left in each fund. Council members are usually volunteers, not accountants, yet they approve the budget that goes to owners and answer for the strata's finances at the annual general meeting. This guide explains how to read the statement the way an auditor or reviewer would, without the jargon.
Key takeaways
- The Strata Property Act requires two funds: an operating fund and a contingency reserve fund. Read them separately.
- The proposed budget must go out with the AGM notice, accompanied by a financial statement.
- The regulation sets what the statement must show, so ask your manager to confirm the current list.
- Monthly review by council, of bank statements, fees owing and the treasurer's report, catches most problems early.
- An audit or independent review is optional under the Act, but the province encourages stratas to consider one.
The two funds
Section 92 of the Strata Property Act requires every strata corporation to have an operating fund for common expenses that usually occur once a year or more often, and a contingency reserve fund for common expenses that usually occur less often than once a year or do not usually occur. Owners pay into both through their strata fees.
The CRF has its own rules. Section 95 requires it to be accounted for separately, and any interest or income it earns becomes part of the fund. Spending from it needs owner approval at a general meeting, by a 3/4 vote in most cases or a majority vote for specific items such as obtaining a depreciation report or work recommended in the most current one. If your statement blends the two funds into one column, ask the manager to show them separately.
What the statement must contain
Under section 103, the proposed budget must be part of the AGM notice and be accompanied by a financial statement, and both must contain what the regulation requires. The regulation also sets how current the statement must be and when a year-end statement is due; your manager or lawyer can confirm the current periods.
The items below are what a council should expect to find; check the current regulation for the exact required contents:
| Item | What to look for |
|---|---|
| Opening and current balances of each fund | Does the closing balance of the operating fund and the CRF make sense against last year? |
| Income by source | Strata fees, interest, parking or amenity income, insurance recoveries |
| Operating expenditures | Grouped by category, compared with the approved budget |
| CRF expenditures | Each one should match an approval at a general meeting |
| Spending without prior approval | Emergency or small items under section 98, shown separately |
| Special levies | Money raised and spent for each levy's stated purpose |
Reading the operating fund
Start with the budget comparison. A line well over budget is not necessarily wrong, but council should know why. Common reasons are insurance renewals, utility rate changes, or repairs that turned out larger than planned. Section 97 says operating fund spending must be authorized by the budget, approved by a 3/4 vote, or allowed under section 98.
Then look at the year-end result. Under section 105, an operating surplus can go to the CRF, be carried forward or reduce next year's contributions, and a deficit must be eliminated during the following fiscal year. A recurring deficit is a sign the budget is too low.
Reading the CRF
Check three things:
- Contributions match the budget. Since November 1, 2023, the province says the annual CRF contribution must be at least 10% of the total amount budgeted for the operating fund.
- Every expenditure from the CRF ties to an approval: a resolution at a general meeting, or an emergency expenditure under section 98.
- Interest earned on CRF money stays in the CRF.
The CRF balance is also worth reading against your depreciation report. Our guide to BC depreciation report requirements explains how the report connects to the fund.
Spending without prior approval
Section 98 allows a strata to spend without owner approval in two situations: small operating expenses up to a limit set in the bylaws (or, if the bylaws are silent, the lesser of $2,000 and 5% of the year's operating fund contribution), and emergencies where an immediate expenditure is needed to ensure safety or prevent significant loss or damage. Emergency spending must not exceed what is needed, and owners must be told as soon as feasible. These items should be visible on the statement, not buried in general repairs.
What owners owe
Look for the receivables: strata fees, special levies and other charges owing at the statement date. The province's guidance asks councils to monitor every month whether owners are paying their monthly strata fees and any special levies. A rising receivable is an early warning for the operating fund.
A monthly routine for council
The province's financial guidance suggests that each month council review the bank statements, check fee and levy payments, and review the treasurer's report for accuracy and to ensure expenditures were approved before they were made. It also recommends that budgets, financial statements and bank statements be easy for owners to access, and that the strata consider an audit or an independent financial review such as a review engagement. Many councils keep a simple checklist so the routine survives a change of treasurer. At year-end, Condo Audit Pro gives the strata one place to upload the documents its CPA needs, against a checklist, and past audits stay in the corporation's account for the next council.
Common questions
Do we need an accountant to prepare the financial statement?
The Act does not require it. Many stratas have the manager prepare the statement and some engage a CPA to audit or review it, which the province encourages councils to consider.
Why does our statement show the CRF separately?
Because the Act requires the CRF to be accounted for separately from the operating fund, with its own rules for contributions, investment and spending.
What if spending from the CRF was not approved?
Ask the manager and council for the authority. Apart from emergencies under section 98 and the specific items the Act allows, CRF spending needs owner approval at a general meeting.
How long should the strata keep its financial records?
The regulation sets minimum retention periods for many strata records. Check the current rules with your manager before discarding anything, and keep past statements and audit reports where a future council can find them.
Make the next year-end easier
If your strata is audited or reviewed, a shared place for the year's documents saves council and the CPA a lot of back-and-forth. You can share the Condo Audit Pro page for boards and councils with your auditor, or watch a full audit walkthrough to see how the documents are used. This article is general information, not legal or accounting advice.
Written by the Condo Audit Pro team at Yabuh Ltd. The platform is the result of 1,000+ hours of development, and its audit logic is built on Canadian Auditing Standards (CAS), ASNPO and each province’s condominium statute. The firm’s own CPA performs and signs the audit. More about how we built it.
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