Auditing a Project Trust Account
Do Project Trust Accounts have to be externally audited?
It is mandatory for every Project Trust Account to be audited by a registered company auditor that is independent of the head contractor and has not been excluded by the Queensland Building and Construction Commissioner (max penalty: 200 PU ($27,570) or 1 year’s imprisonment). However, the Building Industry Fairness (Security of Payment) Regulation 2018 does not yet prescribe a time for when the Project Trust Account must be audited i.e. at this time, there is no requirement for the head contractor to have the Project Trust Account audited by an independent company auditor.
Having said that, the Queensland Building and Construction Commission has commenced random audits of current Project Trust Accounts itself so it is important that head contractors are prepared for an audit at any time as only a short period of time is being given to head contractors to provide the Trust Records to the QBCC or its appointed auditor.
The requirements of an independent audit (when it is prescribed by regulation to be required) are the same as the requirements that currently apply to the mandatory audit of a Retention Trust Account. Details of the requirements for an audit of the Retention Trust Account can be found here.
An independent company auditor is:
- a person who is a registered company auditor; and
- is not an employee of the head contractor;
- is not an executive officer, investor or shareholder of the company if the head contractor is a company;
- is not a partner in the partnership if the head contractor is a partnership; and
- is not a related entity for the head contractor.
This page considers the situation where Project Trusts apply to head contracts. Unless noted otherwise, all references to a ‘subcontractor’ in relation to a head contract Project Trust refers to a subcontractor that is a beneficiary of the Project Trust.
If a subcontract also requires a Project Trust, the rules set out on this page are the same but the subcontractor is the ‘trustee’ and its subcontractors are ‘subcontractor beneficiaries’.
Last updated: 1 January 2022