How to Set Up Invoice Approval Controls in Your Strata Scheme

A Coffs Harbour strata manager was permanently disqualified from the industry after NSW Fair Trading investigators found she had made 398 transactions across 66 strata plans between February and December 2024, moving over $2 million into her own account without committee authority.

The scale of that case attracted public attention. The mechanism behind it is worth understanding: a strata manager was able to make hundreds of payments from owners corporation accounts, repeatedly over a ten-month period, before the full extent became apparent.

That is the extreme version of what forum discussions are now calling the invoice approval question. The practical version is far more common and far less dramatic. It is the manager who processes an invoice for work that was never discussed at a committee meeting. The contractor who completes a job, invoices the scheme, and gets paid before anyone on the committee was consulted. The monthly management report that lists payments nobody explicitly approved.

What the Law Requires

Section 102 of the Strata Schemes Management Act 2015 (NSW) establishes a spending limit threshold for all NSW strata schemes. For any proposed expenditure above $30,000, the owners corporation must obtain at least two independent quotations before proceeding. This threshold applies to all NSW schemes, following an extension from large schemes only under the Strata Legislation Amendment Act 2023.

Exceptions apply for genuine emergencies. Section 102(5) of the SSMA 2015 provides that the spending limit provisions do not apply to expenditure for emergency purposes. In practice this covers situations such as burst or blocked plumbing, unexpected electrical failures, glass breakage affecting building security, and other circumstances where delay would cause damage or harm. Outside those situations, the two-quotation requirement applies regardless of urgency.

The two-quotation rule is meaningful for major maintenance and capital works. What it does not do is create an approval gate for routine invoices below the threshold. Cleaning contracts, management fees, minor repairs, and regular maintenance can be processed under a manager's delegated authority without individual committee approval of each transaction.

That is not a drafting oversight. Requiring committee approval for every invoice would be impractical for most schemes. The question is where the approval requirement should kick in for unplanned or discretionary spending that falls below the major works threshold.

Where the Controls Actually Live

Under Section 52 of the SSMA 2015, an owners corporation may delegate functions to a strata managing agent by the instrument of appointment or some other written instrument. That delegation can be made subject to conditions and limitations, which the Act specifically contemplates may include controls on how delegated functions are exercised.

This is the management agreement. The delegation an owners corporation gives its manager, and the conditions attached to it, are primarily set out there. A management agreement that specifies a spending threshold, above which the manager must obtain committee approval before committing funds, creates a documented limit on the manager's authority. Without that threshold, the manager's authority to process payments is governed by the general delegation, which can be broader than committees realise.

The pattern that shows up in schemes that have experienced unauthorised payment issues, whether significant fraud or more routine overreach, is that the management agreement was either silent on spending thresholds or contained a threshold that had not been reviewed in some time and no longer reflected how the scheme operated.

Setting a Threshold

Most strata management agreements include a spending threshold clause. The practical questions are whether it still reflects the committee's intentions and whether both the manager and the committee understand it the same way.

The SSMA does not prescribe a specific dollar amount for the threshold in management agreements. Common thresholds for unplanned or non-routine expenditure vary depending on the building's size, the volume of regular invoices, and how actively the committee wants to be involved in approvals. A smaller residential scheme might set a lower threshold for non-routine items. A larger scheme with many recurring suppliers might set separate thresholds for whitelisted recurring invoices versus unplanned work.

What matters more than the specific number is that both the committee and the manager have the same documented understanding of what falls inside and outside the threshold, and what happens when a manager needs to act on a genuinely urgent matter where advance approval is not possible.

What Approval Should Look Like

Forum discussions on this topic often describe informal approval processes: a text message to the chair, an email that says "letting you know we paid this." The problem with informal approval is that it is difficult to evidence later.

A manager who received no response to an email may have genuinely believed silence was consent. A committee member who did not respond may have assumed silence was not approval. Those two understandings are not compatible in a dispute.

Approval that is retrievable and defensible needs to be:

In writing. An email, a portal approval record, or a formal committee resolution all work. A phone call does not, unless it is immediately followed by a written confirmation.

Explicitly granted. Not inferred from absence of objection. The approval should state what it covers and the amount.

Recorded against the specific expenditure. So that if the approval is ever questioned, it can be located.

For significant or unplanned payments, a formal committee resolution at a meeting, or a circular resolution (a resolution signed by the required majority of committee members outside a meeting), is more defensible than an approval email alone. The minutes or the signed resolution create a documentary record that is difficult to dispute later.

Many strata management software platforms include an invoice approval feature that lets committees receive, review, and approve invoices electronically before payment is processed. Enabling this for expenditure above the agreed threshold gives the committee visibility and an automatic approval record without requiring a formal resolution for every item.

When to Review

The most practical moment to address invoice approval controls is before there is a problem.

Management agreements are reviewed and renewed at AGMs. Before the next one, it is worth checking three things. What does the spending threshold clause in the current agreement actually say? Does the manager's software have an invoice approval feature you have not enabled? Is the committee's understanding of what requires approval consistent with what the agreement actually provides?

If the management agreement does not have a threshold clause, or the clause has not been updated since the scheme changed managers, raising it at the AGM as a governance matter is within the committee's scope.

A committee that has a documented record of what expenditure was approved, when, and by whom is in a materially stronger position if a dispute arises later, including at NCAT. Whether that record lives in formal committee minutes, in a portal approval log, or in documented written approvals, the key is that it exists and is retrievable.

Some committees use Matter Tracker to record expenditure decisions alongside the maintenance matters and governance actions that generated them. The value is not the tool; it is the habit of recording what was approved, when, and by whom.

This is informational only. Not financial, legal, or compliance advice. The provisions described apply to NSW strata schemes under the Strata Schemes Management Act 2015. Management agreement terms vary between schemes. For advice specific to your agreement or a current dispute, consult a qualified strata lawyer or licensed strata manager.