Guide 5 of 5 · NSW strata
Strata scheme audits in NSW: when the accounts must be audited
In NSW, the owners corporation of a large strata scheme, one with more than 100 lots not counting utility and parking lots, or of a scheme whose annual budget exceeds $250,000, must have its accounts and financial statements audited before they are presented to the annual general meeting. Any other scheme may decide to have them audited, and every audit under s 95 of the Strata Schemes Management Act 2015 follows the Australian Auditing Standards.
General information, not legal or accounting advice. The official place to check is the Strata Schemes Management Act 2015 on the NSW legislation website.
The section, whole
“95 Auditing of accounts and financial statements
(1) The owners corporation for a large strata scheme, or a strata scheme for which the annual budget exceeds $250,000 (or another amount prescribed for the purposes of this section by the regulations), must ensure that the accounts and financial statements of the owners corporation are audited before presentation to the annual general meeting.
(2) The owners corporation for any other strata scheme may determine that the accounts and financial statements of the owners corporation are to be audited.
(3) An audit of the accounts and financial statements of an owners corporation under this section must be carried out in accordance with the Australian Auditing Standards.
(4) The regulations may specify the manner in which the annual budget of a strata scheme is to be determined for the purposes of this section.”
Strata Schemes Management Act 2015 (NSW), version current from 26 August 2026
Two tests, either of which is enough: the size of the scheme in lots, and the size of its budget. The duty is the owners corporation’s.
Test one: more than 100 lots
“(1) In this Act, large strata scheme means a strata scheme comprising more than 100 lots or another number of lots prescribed by the regulations for the purposes of this section.
(2) When calculating the number of lots in a strata scheme for the purposes of this section, utility lots and lots used for the purposes of parking are not to be included in the calculation.”
Strata Schemes Management Act 2015 (NSW), s 6
“More than 100” means a scheme of exactly 100 counted lots is not a large strata scheme on this test. The Strata Schemes Management Regulation 2016, as read on 9 October 2026, prescribes no other number of lots for s 6 and no other amount for s 95, so the figures in the Act are the ones in force.
Test two: a budget that exceeds $250,000
The Regulation says how the budget is worked out, under s 95(4):
“For the purposes of section 95(4) of the Act, the amount of the annual budget is to be the sum of the following
(a) the amount of contributions levied for the year concerned (whether or not they have been paid),
(b) any income of the owners corporation from any other source,
(c) any other amounts held by the owners corporation for the purposes of the owners corporation.”
Strata Schemes Management Regulation 2016 (NSW), cl 21
Levies count when they are levied, paid or not, and amounts the owners corporation already holds are added in. The word is “exceeds”, so a budget of exactly $250,000 does not meet this test.
An illustration, written for this guide
| Scheme | Lots | Annual budget under cl 21 | Audit before the AGM? |
|---|---|---|---|
| A | 140 lots, 45 of them parking lots: 95 counted | $230,000 levied + $12,000 other income + $20,000 held = $262,000 | Required: the budget exceeds $250,000 |
| B | 104 residential lots | $190,000 | Required: a large strata scheme |
| C | 30 lots | $140,000 | Not required; the owners corporation may decide to have one (s 95(2)) |
Who may carry out the audit
Neither the Act nor the Regulation, as read for this guide, names a qualification for the person who audits an owners corporation’s accounts. The one standard they set is s 95(3): the audit must follow the Australian Auditing Standards. That is different from an incorporated association or a charity, where the law lists who may sign; those lists are in the guides to incorporated associations by tier and charities, review or audit.
What is audited
The audit covers “the accounts and financial statements of the owners corporation”. The Act asks the owners corporation to prepare financial statements, and a statement of key financial information, for every reporting period and for each fund it keeps: the administrative fund, the capital works fund and any other (s 92(1)). The statements are prepared on a cash or accrual basis and consist only of a statement of income and expenditure for each of those funds (s 93(1)). A reporting period ends on a date not earlier than 2 months before the next annual general meeting (s 92(2)).
Behind the statements sit the accounting records. The owners corporation must keep them, separately for each fund, with a maximum penalty of 5 penalty units (s 96(1), (3)), and the Regulation lists them, in full: “(a) receipts consecutively numbered, (b) a statement of deposits and withdrawals for the account of the owners corporation, (c) a cash record, (d) a levy register” (cl 22).
At the meeting
The Act also puts the auditor on the AGM agenda: the first annual general meeting decides whether to appoint one (s 15(2)(o)), and every AGM notice carries “any relevant auditor’s report” (Schedule 1, cl 9(a)).
Where there are tenants for at least half the lots in a scheme, they may nominate a tenant representative to the strata committee, and the committee may decide that the representative is not to be present while “financial statements and auditor’s reports” are discussed or decided (s 33). The audit itself is about the owners corporation’s own books; whether a NSW body of another kind needs an audit is a question for its own Act, as the five duties side by side show.