At the most basic level, the operating fund is a vehicle for the monies required to cover operating expenses.
The Strata Property Act (SPA) defines it as the main fund required for managing strata corporation finances or as an operating fund for common expenses that (i) usually occur either once a year or more often than once a year, or (ii) are necessary to obtain a depreciation report.
It is for daily, weekly, monthly, and other scheduled expenses that occur more often than once a year and that are paid for by assessments, fines, fees etc., as defined in the strata corporation’s annual budgets, as part of fiscal-year based total collected strata fees.
Many strata corporations have a ‘Repairs & Maintenance ( R & M)’ budget line item that has been used to pay for less than once-a-year major repairs and even reserve fund expenditures, since only a 50 percent simple majority vote is required to spend money from the operating fund if no depreciation report has been acquired.
If a strata corporation acquires a depreciation report, it also only needs a 50 percent simple majority to spend money from the reserve fund on component inventory items, and it can shift some of the R & M expenses that are actually expenditures into the reserve fund thus re-balancing strata finances in a way that increases the regular contributions to the reserve fund by design, and often without having to increase strata fees.