strata manager claims financial control over EC

At our AGM late in 2011, our friendly new strata manager transformed from being fairly cooperative to strangely (& almost aggressively) bureaucratic. This surprised and disappointed quite a few owners.

Out of this new attitude emerged some pronouncements that simply don't make sense. So, please, can anyone help with some advice?

My biggest worry was the SM's assertion that the SM can override any spending decision the EC makes. 

I'm not talking about massive spending – like the $100,000 or so that an EGM will have to approve for essential repairs and maintenance neglected by the OC and our previous SM over many years. Since this will require a loan or special levy, it's proper that all owners get a say. Owners did all the work – with engineers and other specialist advice – to sort out what must be done. The SM simply pays the bills.

When we contracted the new SM – less than a year ago – we agreed the SM could spend up to $800 without EC approval on basic maintenance requests. In fact, so far, the SM keeps seeking our approval for many such expenses.

When we had to approve $12,000 to $15,000 for some urgent/overdue maintenance to a particular unit, we were told (after calling an EC meeting – SM had the agenda in advance) that the EC has no power to approve such a large amount. So that went to an EGM, which we would have called earlier, if only we'd known.

But now the SM asserts that they can override any EC decision about spending money that they like. The SM refused to be specific about numbers and dismissed any arguments that the SM is contracted to work FOR the OC, not to stymie our efforts to fix a complex neglected for many years by its former SM and the one unit owner who once dominated all EC decision making. (It was a novelty a few years ago when we introduced the concept of the EC actually holding meetings.)

So who is really responsible for what when it comes to finances? I thought I'd established the basics of our EC responsibility ages ago. But now we're informed that our role is simply to review quotes, rather than to set policy/goals/etc.

The bizarre thing is that our EC does a lot more communicating with unit owners and residents than ever occurred in the past. We are very consultative and have been building a friendly neighbourhood in our strata plan. The SM knew what we wanted when bidding for our contract. But in a few stupid acts of poor communication (this issue included) has now undermined the confidence that many owners previously had in the new SM. At least one owner is already talking about sacking them.

Please feel free to direct me to legislation or regulations that specify the financial roles and responsibilities in strataland… or even just tell me about lessons learned in your own strata scheme.