No Code Website BuilderDesigned for Property Managers, Accountants and Trustees as a tool to Automate an accurate financial analysis and levies for the current accounting period.
The innovative Body Corporate Financial Framework is an advanced Quantum Management Accounting System that utilises AI Smart-Bots. Each Smart-Bot is programmed with all pertinent legislation and governance regulations, allowing for accurate calculations of the required funds to cover operational costs.
It automatically reconciles all ledgers and bank accounts while generating levies, contingency funds, and reserve funds. The BCAP framework leverages principles of ethical stewardship and trustworthy governance to accurately allocate funds necessary for operational costs.
Initially, the framework conducts a thorough financial analysis of the entire system, setting its own objectives to enhance performance. It then resets the performance ledger and bank accounts, ultimately ensuring that the whole system is balanced. Any discrepancies are automatically allocated to their appropriate ledgers.
In the event of emergencies that necessitate substantial funding beyond the available levies, our framework can assess the reserve fund and contingency funds. It will provide recommendations on how to finance repairs to the building while ensuring that these funds are replenished in subsequent periods. This replenishment process could extend over a three-year timeframe to maintain reasonable levy collections.
The BCAP system operates autonomously, managing the entire body corporate without requiring human intervention. However, it includes a component for human input, allowing users to enter special levies or long-term maintenance projects. Once this information is provided, the system automatically calculates and adjusts the necessary levies and funding accordingly.
Fraud, theft, and mismanagement of funds can be readily identified through the system, which produces a detailed 12-month report at the beginning of the current period that allows for direct comparison with the monthly financial reports generated by the Property Managers. Minor discrepancies can be quickly spotted, while significant discrepancies may indicate mismanagement or the improper use of municipal utilities, which can accumulate to as much as R1 million if not properly monitored.
Can this smart audit system be sustained as a long-term solution?
Once our system has completed an audit, we can confidently say that all potential errors and deficiencies have been remedied, allowing us to generate audited projections for the next 5 to 10 years. We will factor in human input for any emergencies that may occur, during the 10 year period ensuring that levies are established only for those specific instances, thereby minimising any disruption to other projections. AI is smart each current period will be re-audited over the 10-year period, only a few elements are needed for an updated re-calc. and create a fully re-audit of a current period. Our projections are not static, they are programmed to detect each current period and re-audit itself while accepting any adjustment figures, bank balances and maintenance, which will force a final re-audit.
In a nutshell:
Our approach will involve clearing the fiscal performance ledger, creating the required funds across the three bank accounts, and reconciling the calculated amounts with the actual funds. Further adjustments will then be implemented to establish the exact levies needed for the entire current period.
This means that there will be no surplus or shortfall in the financial performance ledger including the three bank accounts.
It's important to understand that when we review the financials of a body corporate, we are essentially merging two sets of financial accounts into a single audit. However, if the funds between the reserve fund and the body corporate accounts are not properly allocated, it creates complications that can be challenging to resolve.
According to governance guidelines, they should be audited separately. With the new BCAP platform, we can conduct audits across both ledgers seamlessly. AAI recognises the discrepancies between the accounts and is equipped to accurately adjust the balances with precision, effectively distinguishing between operational expenses and funding for reserve projects.
The BCAP Smart-Bot streamlines this process by accurately adjusting the fund balances across all three bank accounts. Members contribute a single payment into the current account, and the Smart-Bot ensures that this amount is properly distributed among all accounts.
Is it possible to generate all these audit procedures within a few minutes?
Can this smart audit system be sustained as a long-term solution? It includes a feature for entering Special Levies and maintenance projects. BCAP will automatically generate levies only when the Contingency and Reserve Funds fall short of the project costs. Additionally, the system can be configured to utilise only 50% of these funds before initiating any new levies. Any use of reserve funds will automatically be replenished over a determined period.
Once an audit is performed using the BCAP framework it only requires minimal adjustments for every new period to reaudit, balance the financials and generate all the levies.
Our financial framework is designed to be highly interconnected, where every action triggers a series of reactions that can cascade up to 50 different elements. This intricate web of relationships is aimed at achieving perfection in automation. In stark contrast to previous examples, our system is now in balance and will remain so in every new period, thanks to its sophisticated design and capabilities.
Managing collections for maintenance, long-term projects, and special levies can be a complex and challenging task. It is crucial to determine when to cease collecting levies to avoid excessive fund reserves that can burden members.
Our Solution
To address these challenges, we have developed a comprehensive component designed to streamline the management of these financial aspects. This system incorporates several key features:
1. Expiring Terms: The component is governed by predefined expiration terms that regulate funding. Once a term expires, funding collections will automatically cease, preventing unnecessary accumulation of reserves.
2. Financial Monitoring: The system continuously compares current bank reserves and investment accounts against established funding goals. If collections exceed the desired thresholds, the component will halt contributions across all categories.
3. Project Evaluation: Funds collected for projects that are no longer necessary or have not been executed will be carefully assessed. This ensures that resources are allocated efficiently and effectively.
Need for a Robust Financial Framework
Before implementing any AI solutions, it is crucial to establish a comprehensive financial framework. This framework encompasses several key components:
• Focused Auditing for the Current Period:
• We are conducting an audit exclusively for the first day of the current fiscal period. This approach is necessary due to the absence of thorough auditing in previous periods, which has resulted in unbalanced bank accounts and inaccuracies in the debtor report, particularly regarding advanced payments and other unaudited components. By concentrating solely on the current audit, we aim to prevent cross period adjustments that could disrupt the balance of the entire system for this period. The framework totally eliminates unbalanced audits for the current period.
Challenges Faced by Boards of Trustees
Typically, sectional title schemes operate under standardised auditing rules, which can complicate management. Many boards of trustees lack the necessary education and training to effectively fund the running costs of their schemes. This often leads to severe financial distress, with some schemes facing bankruptcy due to mismanagement or non-compliance with municipal bylaws.
When dealing with a fiscal audit that reveals numerous errors and deficiencies in the financial records, making amendments for the new period can be highly challenging.
Auditors often recommend adjustments to the opening balances to correct these issues. However, if these instructions are not implemented, the deficiencies carry over into the current period. Over time, when reviewing financials spanning five to ten years without any corrections, these errors can compound into significant discrepancies.
In the BCAP financial framework, which does not rely on retained earnings to address deficiencies, the income statement must be balanced. Levies are calculated to support this balancing process, as it is impossible to reconcile the other ledgers and bank accounts if the income ledger is out of balance. This underscores the importance of ensuring that all the current financials are accurately balanced. Once this is achieved, maintaining a balanced system for all future accounting periods becomes straightforward and sustainable.
In essence, a balanced financial foundation is critical for long-term accuracy and efficiency. By addressing errors promptly and ensuring the income statement is in balance, the BCAP framework simplifies the process of maintaining financial integrity across all future periods.
To enable trustees to effectively address discrepancies in the Maintenance and Municipal components, we are developing a Management Portal. This portal will facilitate advanced adjustments to be made two weeks before the start of the current period. By implementing these adjustments ahead of time, the financial framework will seamlessly import the updates, ensuring the current audit is accurately revised for the new period.
This proactive approach eliminates the need to wait for the new period to begin before making adjustments, streamlining the process and ensuring a smoother transition into the new accounting cycle. The portal will empower trustees to maintain financial accuracy and efficiency while reducing the risk of errors or delays.
SMART-BOTS IS EXTREMELY ACCURATE - ERROR FREE - DEFICIENCY FREE & FAIL PROOF.
No Code Website Builder