Trust account handbook - Department of Commerce - wa.gov.au

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3.5 How should an agent respond to an auditor’s recommendations? An agent must promptly implement any recommendations made by the auditor where the recommendations arise from a breach of the Act. The Commissioner looks upon any breaches of the trust account provisions seriously. If an agent considers the recommendations to be unfair or unreasonable, the agent may make a request in writing to the Commissioner to reconsider the recommendations in light of the objections. 3.6 What are an agent’s duties in changing an auditor? Under section 54(3) of the Act, an agent must continue to employ the statutory appointed auditor unless the Commissioner approves a change in the appointment. Agents seeking to change their statutory appointed auditor must lodge an application with Consumer Protection no later than one month after the end of the year of being audited. Applications for a change of auditor will not be accepted after this time due to the proximity with the due date for provision of the annual audit. For example, where the audit period expires on 30 June 2013, an application must be received by 31 July 2013. All agents seeking to change their statutory appointed auditor must complete a Change of Auditor request form (www.commerce.wa.gov.au/CP/Auditors) and return this to Consumer Protection. The Commissioner does not consider delays caused by a change in the appointment of an auditor as an acceptable reason for granting an extension of time for the submission of the audit report. Further details on these points can be found on the Consumer Protection’s website, www.commerce.wa.gov.au/CP/Auditors 24 3.7 What is a quarterly audit? Section 51(8)(a) of the Act provides for an interim quarterly audit to be conducted on the settlement agent’s trust account for the first three months they conducted business. The auditor is required to deliver the audit report to the Commissioner within two months after the end of the first three months of trading. In some circumstances, the Commissioner may approve combining the interim audit with the annual audit. Section 51(9) of the Act provides for the Commissioner to waive the requirement of an interim audit where appropriate. 3.8 What if a settlement agency closes? The closing of a settlement agency can be a complex matter. Some guidelines are provided on page 25 but it is recommended the agent seek legal and accounting advice to address all of the issues involved. If the business is licensed as a partnership or body corporate, written notification of the date of closure and surrender of the licence and triennial certificate of the business must be given to the Commissioner. If the business is being conducted by a sole trader, written notification of the cessation of use of the business name must be given to the Commissioner and the Australian Securities and Investments Commission (www.asic.gov.au), who now has the responsibility for the registration of business names. The agent’s triennial certificate should also be returned to the Commissioner. SETTLEMENT AGENTS’ TRUST ACCOUNT HANDBOOK
As well as advising Consumer Protection, the appointed trust account auditor must be advised of the closure of the business. All current clients of the business should also be notified. In addition: • Where there is a change of the entity which owns the business, and transfer or closure of a business, a termination audit must be carried out within three months of the change occurring (ie when the triennial certificate ceases to have effect) and the auditor must deliver a termination audit report to the Commissioner within two months after the end of the three-month period. • If funds held in the trust account cannot be disbursed within three months following the closure of the agency, they may be disbursed to another agent or solicitor’s trust account provided there is written agreement from the parties who own the funds, which authorises the agent to deal with the money as instructed. • If funds are still held in the trust account after a termination audit report has been delivered to Consumer Protection, the auditor is required to deliver a final clearance letter to the Commissioner when the trust account has reached a nil balance. • If unclaimed money remains in the trust account, they may be disbursed in accordance with the provisions of the Unclaimed Monies Act 1990 (see 3:9 Unclaimed trust money). • All accounting records must be kept for not less than six years from the date on which the money was received. Refer: section 51(8)(b) of the Act 3.9 Unclaimed trust money An agent must notify the Western Australian State Treasurer (the Treasurer) of any unclaimed money held in a trust account for six years or more as at 31 December each year. Under section 8 of the Unclaimed Money Act 1990, this notification should be provided to the Treasurer no later than 31 January in the succeeding year. The Unclaimed Money Act 1990 provides for voluntary payments to be made where the money has been held for a period of not less than two years. Where an agent ceases to operate and the trust account is being finalised, the Department of Treasury (Treasury) will accept unclaimed money that has been deposited for less than two years. Treasury requests agents note the following points when making a payment: 25 • one transfer to be made in the middle of June; • all money in that transfer must have been held, unclaimed, for at least two years (exceptional cases may apply, such as when an agent ceases to operate); and • Treasury must be provided with a covering letter, a cheque for the amount being transferred and the following payment information: ❍ ❍ name of the owner of the money (Treasury may not accept money where ownership is in dispute or unclear, eg the agent should not list both a seller and a buyer as the owner); ❍ ❍ owner’s last known address (street name, suburb/city); ❍ ❍ amount payable; ❍ ❍ date cheque issued; and ❍ ❍ description of the payment. SETTLEMENT AGENTS’ TRUST ACCOUNT HANDBOOK
Page 1 and 2: Government of Western Australia Dep
Page 3 and 4: Table of Contents Introduction.....
Page 5 and 6: Introduction The Settlement Agents
Page 7 and 8: 1.5 Types of trust accounts General
Page 9 and 10: 1.10 What trust documents and recor
Page 11 and 12: The following calculation can be us
Page 13 and 14: PART 2 TRUST DOCUMENTS AND RECORDS
Page 15 and 16: cross-referenced against the interi
Page 17 and 18: • amount received; and • the to
Page 19 and 20: 2.8 Buffer account Agents sometimes
Page 21 and 22: Regular monitoring of trust account
Page 23 and 24: Example: Trust account reconciliati
Page 25: 3.3 What are an agent’s responsib
Page 29 and 30: PART 4. PREVENTING THEFT AND FRAUD
Page 31 and 32: everse the transaction. Agents shou
Page 33 and 34: GLOSSARY Act (The) The Settlement A
Page 35: Department of Commerce Consumer Pro

Trust account handbook - Department of Commerce - wa.gov.au

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