There are many who are turning towards SMSF because of the high fees and charges from super funds. This is both a good thing and a bad thing. Here is an issue that has been identified where payment of fund expenses are sometime paid out of personal accounts. This then becomes an issue when the SMSF is audited, because these personal payments have to be rectified. The following article identifies this issue:
Auditor flags issues with incorrect expense payments
– Thursday, 29 December 2016
Some SMSF trustees are exposing themselves to potential compliance risks by paying fund expenses from their personal bank account.
SuperAuditors director Shelley Banton told SMSF Adviser she is seeing a lot of cases of this happening and said there are serious consequences where these payments are not rectified before the fund is audited.
“These payments may only be small amounts, but when it gets to audit time and they’ve totalled up to quite a reasonable sum and they’ve got to be paid out of the fund within a reasonable timeframe, that’s where it’s going to be an issue,” she said.
“Sometimes it’s just an honest mistake by the trustee and obviously if you’ve got all your accounts with the same financial institution it’s easy to click on the wrong account in the drop down box when you’re banking online. If it continues to be an issue though then it can then become a compliance issue for the client as well.”