The Problem
If a property manager provides a set of figures with little or no supporting documentation, it is clearly not possible to "certify" the amount due.
The selection of documents MUST be made independently by the "auditor" [see below], not provided by the client as a typical sample.
The process of certification is one which requires that the amount to be certified is verified - that is the process of audit as would have existed in 1960 when the lease was drawn.
Messrs Kirk Rice failed to certify which strongly suggests to the Author that they had failed to carry out an audit of any nature.
The Author considers that the wording of the typical certificate [included at page 35 of Tech 03] item (b) says it all.
The summary is sufficiently supported by accounts, receipts and other documents which have been produced to me.
If no documents were examined, or if the ones proffered for examination were not chosen by the person issuing the certificate then there is a problem.
It is to be noted that a court may well accept an unsatisfactory certificate: and that can only be said to be a most unsatisfactory state of affairs.
Changes of Managing Agent also result in chages of auditor. This can lead to an unsatisfactory situation.
Results
The ICAEW censured and fined Kirrk Rice.
Update 28th April 2026
The ICAEW have concluded their investigations into Messrs Carter Coley, and Watsons. The latter "undid" a couple of iniquities created by Carter Coley, but have stll made some other [minor] errors - due to the data that they were provided with on Insurance in particular the renewal date.
It must be stressed that in all cases the data provided by Kersfiled Maantenance Ltd was at fault.
The conditions of the lease require as follows:
The account taken in pursuance of the last preceding Clause shall be prepared and audited by a competent chartered or incorporated accountant who shall certify the total amount of the said costs charges and expenses.
The word audited has been downgraded from meaning what might be described as "a sensible and reasonable check" to something much lesser. This allows improper accounting to be certified.
That is what is wholly unacceptable.
Sadly the ONLY remedy [apart from proceeding to a Tribunal at considerable expense, and time] is to complain to the ICAEW. After all it is their rules and regulations [viz Tech 03] which are inadequate. Accounts should be required to state if there any disputes have been raised, and whether they have been resolved.
It is worth reporting that the ICAEW are fully aware of the dilemma which the accountants of many leasehold estates face. Advice should be provided in Tech 03's successor document as it is a matter of the conduct of the profession.