Forensic Audit Report (Run 3 Final)
Comprehensive forensic review of Pride of Our Footscray Community Bar Pty Ltd covering FY23, FY24, and FY25. Scope: bookkeeping remediation and ITR preparation. Status: All three ITRs are overdue and unlodged.
Report date: 22 March 2026
Data sources: Xero Trial Balances (authoritative), P&L reports, Balance Sheets, Account Transaction Reports, Square POS CSV, Westpac bank statements
Key Findings Summary
The books are substantially better than initially feared. Early audit runs identified hundreds of thousands in apparent errors, but most were GL CSV export artefacts. Using Xero Trial Balances as authoritative source, actual issues are smaller, more specific, and largely correctable.
| # | Finding | Amount | Type | Priority |
|---|---|---|---|---|
| 1 | Square loan phantom balances (SQ-600001 / SQ-800004) | $247,618.39 | Balance sheet cleanup | HIGH |
| 2 | Zeller EFTPOS deposits in wrong clearing account | $65,829.45 | Balance sheet misclassification | HIGH |
| 3 | Amaka duplicate invoices (FY25) | $206,274.34 | Revenue (reversed) | MEDIUM |
| 4 | Novated leasing payroll gap | $6,151.50 | Current asset | MEDIUM |
| 5 | Super payable coding error | $100,124.07 | Current liability | HIGH |
| 6 | GST/BAS position | $19,641.25 | Current liability | LOW |
| 7 | FY25 interest expense not recognised | ~$29,530 | P&L misstatement | HIGH |
| 8 | Other Payment Clearing + revenue double-count | $15,894 + ~$7,674 | Balance sheet + P&L | MEDIUM |
Impact on ITR Figures
| Adjustment | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue — no adjustment needed | $0 | $0 | $0 |
| Interest expense understatement | — | — | ~$29,530 (deduction missed) |
| Super expense reallocation | — | — | ~$35,583 (catch-up to prior years) |
| SGC non-deductible add-back | — | — | $801 confirmed |
| Revenue double-count (bank transfers) | — | — | ~$7,674 (overstated) |
| Net taxable income adjustment | Nil | Nil | ~$63K reduction |
Revenue Summary by Financial Year
Figures from Xero P&L reports (post-voiding state for Amaka duplicates):
| Account | FY23 | FY24 | FY25 |
|---|---|---|---|
| 200 — Sales | $1,283,897.45 | $6,625.66 | $205,539.50 |
| SQ-200000 — Square Sales | $475,339.94 | $1,470,718.81 | $1,106,824.93 |
| SQ-200001 — Discounts | ($14,603.58) | ($47,616.36) | ($19,619.27) |
| SQ-200003 — Service Charges | — | $1,184.45 | $526.87 |
| 260 — Other Revenue | $100,241.44 | $52,316.57 | — |
| 270 — Interest Income | $394.22 | $537.59 | $379.70 |
| MIDSUMTKS — Midsumma Tickets | — | $9,075.55 | $9,494.84 |
| TBCTBD — Trybooking (GST-free) | — | $38,607.14 | $60,154.41 |
| 222 — Donations | — | — | $1,000.00 |
| 111 — Grants (BAS Excluded) | $2,000.00 | — | — |
| Total Revenue | ~$1,847K | ~$1,531K | ~$1,364K |
Note: Shift from account 200 to SQ-200000 reflects Amaka middleware adoption mid-FY23. Pre-Amaka, revenue recorded directly to account 200; from mid-FY23 onward, Amaka routes Square sales to SQ-200000.
Findings Requiring Action
Finding 7 — FY25 Interest Expense (~$29,530 unrecognised)
- Lumi weekly repayments include embedded interest not separated from principal
- Repayment amounts increased from $889.84/week to $1,603.63/week (reflecting larger balance after Apr 2025 extension)
- Without Lumi loan schedule, interest expense entirely unrecognised on P&L
- Action: Obtain Lumi loan schedule to split principal vs interest retrospectively
Finding 5 — Super Payable Coding Error ($100,124.07)
- Superannuation deductions miscoded; requires reallocation for ITR
- ~$35,583 catch-up allocation needed across prior years
- Action: Coding correction needed before ITR lodgement
Finding 4 — Novated Leasing Payroll Gap ($6,151.50)
- Payroll deductions for novated lease not captured
- Action: Board decision required on recovery approach
Data Source Hierarchy
| Priority | Source | Use |
|---|---|---|
| 1 (highest) | Westpac bank statements | External, tamper-resistant |
| 2 | Xero Trial Balances | Authoritative account balances |
| 3 | Xero Account Transaction Reports | Line-level account activity |
| 4 | Square POS CSV | Tender breakdown, settlement amounts |
| 5 | Xero GL CSV | Pattern matching only—NOT for balances |
| 6 (lowest) | Amaka-generated entries | Always verify against Square source |
Key limitation: GL CSV export is structurally incomplete (missing Receivable Payment entries and some INV-ACCREC postings). Must never use GL CSV for balance calculations.
Related Pages
- Loan Accounts Diagnostic — detailed deep dive on phantom loan balances
- GST Treatment — FY23–FY25 GST/BAS position verification
- Interest Expense Recognition — Lumi interest allocation methodology
- Superannuation Coding — super payable reallocation and ITR impact
- Revenue Model — FY23–FY25 revenue by stream
- Tax Lodgement — ITR preparation timeline and action items