19-07-2016 12:01 PM - edited 19-07-2016 12:06 PM
When we apply trust funds in a PEXA matter we need to appropriately identify the recipient of the funds and the purpose of the payment etc. Has anyone had their auditor specify how various trust transactions should be expressed? e.g. we will have a bank statement entry as:
"ELECTRONIC CONVDEYANCING SOURCE FUNDS [CLIENT NAME] -$22,000.00
[MATTER REF NO.] PEXA 12345678910203040"
However, we know that this deduction was part of the deposit on our client's sale, paid into our trust account by the estate agent, and applied to paying out of our client's mortgage as at settlement. The client's bank is not identified, nor is the account into which the funds were paid to effect the settlement.
We don't want have to make assumptions that we can't verify to the auditor, and we don't think that auditor will be satisfied with just the PEXA number as the description of the trust transaction.
on 20-07-2016 06:23 PM
Thanks for your question.
When a signer authorises a source financial line item, a Trust Account Authorisation Record is created. You will have the ability to access the Trust Account Authorisation before and after settlement as documentary evidence of the transaction performed for the relevant trust account source line item. This document records approval provided by the signer(s) for the debit of the amount of funds specified in the source line item from your trust account into your financial institution's nominated internal account for the purposes of the property transaction.
PEXA also allows Subscribers to access a Settlement Completion Record which records all source and destination line items for the transaction. The combination of your client file and instructions, the Trust Account Authorisation Record (where applicable) and the Settlement Completion Record are all components of record keeping for a PEXA transaction.
PEXA has consulted with trust account regulators in all active jurisdictions and has provided information about PEXA financial settlements and the records produced by PEXA. Each regulator has reviewed the records produced by PEXA in the context of the applicable trust account obligations in their jurisdiction.
I trust that answers your query. If you need anything further please let me know.
on 21-07-2016 06:16 AM
Thanks Naomi, I'll use your advice to investigate further and post a follow up. My main concerns are not so much the availability of data, but the ease of extracting same and presenting it in a form acceptable to our auditor so that the task of maintaining our trust account does not become a full time job.
on 26-08-2016 08:09 PM
Hi Peter, how did you go with your further enquiries here?
The Trust Account Authorisation Record should give you the information you need to populate your ledger - including source of funds, destination account details, date of transaction and client reference.
on 29-08-2016 05:33 AM
I don't think we'll really know until we have our next audit.