Collection agents who do not need a licence have an audit period that runs from 1 July to 30 June the following year with their audit report due by 31 October each year.

Unused trust accounts

If you didn't use your trust accounts throughout the entire audit period, you may lodge a statutory declaration to this effect. This is a legally binding statement that you did not:

operate the trust account during the audit period
receive any funds on behalf of another person or entity.

You won't need to submit an audit report if you lodge a statutory declaration.

Penalties

If you do not lodge your audit report on time:

you can be fined
you can be convicted of an offence
we can cancel or suspend your licence.

Lodge your audit report

OFT is changing the way audit reports and statutory declarations can be lodged. For all future lodgement of audits and statutory declarations, please upload the report through our online portal at Trust Account Audit Report Lodgement (business.gov.au). If this is not possible, the report can be emailed to Financial.OFT@justice.qld.gov.au.

You are ultimately responsible for lodging your audit report, however, your auditor can lodge it on your behalf.

Apply for an extension

You can apply for an extension for lodging your audit report. You must:

notify in writing before the audit period report is due to be lodged
state the reason/s for the extension
tell us the extra time you need.

Lodge your final audit

If you stop trading, you must lodge your final audit. You will have 2 months from the day you stop trading to lodge the final audit report.

You can lodge your final audit report online.

Conducting trust account audits under the Agents Financial Administration Act

This page only applies if you are an auditor who conducts trust account audits under the Agents Financial Administration Act 2014.

This Act refers to audits of trust accounts operated by individuals and corporations who work as:

real estate agents
resident letting agents
auctioneers
chattel auctioneers
motor dealers (who sell used vehicles on consignment)
debt collectors (who collect debts on behalf of someone else).

Debt collectors may be licensed field agents or collection agents (who do not need a licence).

Auditing standards

You are expected to perform the audit of trust accounts in accordance with the standards required by your professional body. You are also expected to provide the completed audit report to your client in a timely manner.

Unannounced examinations

An audit period usually lasts for 12 months. You must conduct 2 unannounced examinations of the trust account/s during this time.

These examinations cannot:

take placewithin 2 months after the last day of the audit period
be less than 2 months apart.

For some reasons, an audit period may be shorter than the usual 12 month period. You must still make at least 1 unannounced examination in an audit period of over 6 months.

Irregularities

If you detect a serious irregularity with a trust account, you must immediately report it to us. Additionally, all irregularities should be detailed in the annual audit report.

Cessation of audit appointment

You and the agent or dealer must each immediately notify us when your auditor appointment ends and explain the reasons why it ended.

Penalties

We can penalise you if you fail to satisfactorily perform your auditor functions, do not immediately report a serious irregularity with a trust account or fail to notify us of the end of your appointment. Penalties may include:

being reported to the Australian Securities and Investments Commission
discipline from your industry body
fines of up to $26,690 or 1 year imprisonment.

The audit report

You must complete the annual audit report in the prescribed format. It needs to include:

your name
your professional body and member number
the name of the agent or entity operating the trust account and their business address
their licence number (unless they are a collection agent)
the audit period
the name and number of each trust account
the financial institution that holds their trust account (or accounts)
the serial numbers of all trust receipts (both unused and used)
the accounting software used (tell us the name and version number)
the registered business name and the name of all business associates
details of all overdrawn trust bank accounts and trust creditor ledger accounts, including:
account name (or names)
date (or dates)
amount (or amounts) involved
explanations given
corrective action taken
a copy of the reconciliation of the trust account cash book and the trust bank account and trust ledgers as at the last day of the audit period.

For a corporation you must also include the licence number of each licensee and agent in charge.

You will also need to make a statement about:

whether the agent has kept each trust account satisfactorily
when each unannounced examination took place
what results came from each unannounced inspection
whether you also audited the agent's general account
whether for each month of the audit period the trust account cash book and the trust bank account and trust ledgers were reconciled
whether an analysis was made of the name and amount owed to each trust creditor
whether any amount was held in the trust account for more than 3 months and the reasons given
anything else that should be reported.

You can lodge a trust account audit report online.

Appointments

The agent and client will negotiate the terms of the agent's appointment at the time the appointment is made. The appointment must be made in writing using the specified appointment form.

The terms of appointment are to specify:

the name and licence number of the agent or dealer
when each party can access and use their share of income
when the agent or dealer can collect management fees and other charges.

Pre-drawn commissions/unauthorised withdrawals

Disbursements from trust accounts to clients usually take place on a monthly basis. They may be more frequent, such as bi-monthly, if agreed.

An agent or dealer must not withdraw their commission and fees from the trust account until after they have made all other payments relevant to the performing of the service earning them commission or fees. They must also only withdraw money for an authorised purpose.

Breaches

An agent or dealer may be in breach if they withdraw trust money from their trust account:

before the authorised time
for an unauthorised purpose.

For example, they must not pay trust money to their general account before finalising all other payments (pre-drawing).

These are serious breaches.

A breach might be against the following sections of the Agents Financial Administration Act 2014:

Section 20 (trust money not available to licensee's creditors)
Section 21 (when payments may be made from trust accounts)
Section 22 (permitted drawings from trust accounts)

Charging more for expenses than actually incurred

An agent or dealer must disclose to their client if they derive a benefit from charging expenses to an owner. Generally, this is when they charge the client more than the actual expense amount.

For example, if the agent or dealer is a resident letting agent this may be for a range of services, such as:

linen
cleaning
pay TV.

Terms

The agent or dealer and their client will negotiate these terms at the time of making the appointment. For all expenses, the agent or dealer must disclose to their client if they receive any:

rebates
discounts
commissions
other benefits from performing a service for their client.

Failing to comply with the terms of their appointment may result in breaches of the following sections:

Section 23 of the Agents Financial Administration Act 2014 (Accounting to clients)
Section 89 of the Property Occupations Act 2014 (Restriction on recovery of reward or expense--no proper authorisation etc)
Section 90 of the Property Occupations Act 2014 (Restriction on recovery of reward or expense above amount allowed)

The completed audit report

Once it's complete, you must:

sign the audit report
give an original copy of the report to the agent or dealer.

If you lodge the audit report online, you can download a copy of the lodgement receipt and save it and/or email it to the licensee.

Lodgement

Although the agent or dealer always remains responsible for lodging the audit report, either you or the agent or dealer may lodge it with us.

Checklist

We have developed a checklist to help you comply with your obligations under the law.

Auditor checklist (PDF, 374 KB)