Supervision Guideline – No. 3. Trust account procedures

Supervision guidelineFurther clarification
3.1. A principal licensee who employs a licensee in charge must:   
3.1.1. ensure that each trust account maintained in accordance with Part 7 of the Act by the principal licensee, in connection with their business as a licensee, has only one licensee in charge who is responsible for and able to authorise withdrawal of money from that account, and  One licensee-in-charge allocated per each trust account
Part 7 of the Act:
Part 7 Trust accounts
Summary is as follows:

Section 85 Interpretation
Meaning:  trust money means money received for or on behalf of any person by a licensee in connection with the licensee’s business as a licensee.

Section 86 Trust money to be paid into trust account

Section 87 Approval of authorised deposit-taking institutions

Section 88 Trust money not available to pay licensee’s debts

Section 89   Licensee to notify trust account becoming overdrawn

Section 90   Interest earned on trust accounts to be paid to Statutory Interest Account
For full detail -of Part 7 Trust accounts refer the Act –here    
3.1.2. prepare and maintain a document that clearly identifies each licensee in charge and the trust account/s for which they are responsible.  – Good practice to have this noted in the business organisational chart- who the licensee-in-charge is allocated to which trust account
3.2. A principal licensee must prepare and maintain written procedures for the review of trust accounts and daily or next day banking practices with respect to the receipt of trust money.  – Have written procedures for the daily banking processes
3.3. Without limiting clause 3.2, the written procedures must ensure:  The points below are all self-explanatory.
3.3.1. that each trust account has only one licensee in charge who can authorise the withdrawal of trust money from that account, and details of the relevant licensee in charge and trust account have been recorded for each trust account,  
3.3.2. a review of trust account transactions is conducted at least once per calendar month, 3.3.3. the amounts deposited into and withdrawn from the trust account have been verified using the relevant financial institution’s records as source documents,  
3.3.4. all persons who have access to the trust account system have separate logins, and their passwords are not shared with anyone,  
3.3.5. any adjustments shown in an end of month reconciliation can be explained with evidence,  
3.3.6. there are processes for obtaining and documenting the express authorisation of a licensee in charge to withdraw trust funds in accordance with the Regulation,  
3.3.7. rental and sales money is paid into the appropriate trust accounts, and  
3.3.8. rental money owing to a landlord under a residential tenancy agreement (less any authorised expenses) is paid to the landlord at the end of each calendar month, unless instructed otherwise by the landlord.  
3.4.A licensee in charge must maintain a record of all cash transactions which includes, at a Minimum:  
3.4.1. the cash amount received,  
3.4.2. the name of the person who received the cash from the payer,  
3.4.3. the name of the person who prepared the daily banking of those funds,  
3.4.4. the name of the person who deposited the funds in trust at the financial institution, and  
3.4.5. the trust account details.  

Sources: Property and Stock Agents Act 2002 And Secretary’s Guidelines for the Proper Supervision of the Business of a Licensee