Long run accounting drama: School director gives a poor review to the complaints procedures

THE director of a drama school was so dissatisfied with the service he received from his accountants that he complained to the Institute of Chartered Accountants on three separate occasions.

But the way it dealt with his allegations that the company had mishandled a cheque, failed to hand over information to his new accountant promptly, and added extra charges merely compounded his unhappiness.

George Peck, a director and shareholder of the Oxford School of Drama, based in Woodstock, used the Oxford branch of accountants Neville Russell when he bought the school's studio. Neville Russell also looked after all Mr Peck's individual tax affairs, including his submissions to the Inland Revenue.

Last year, Mr Peck decided to switch to another Oxford-based firm, Mercer Lewin, because he was not happy with the service he was receiving.

From the beginning of March 1992, Mr Peck began to receive a series of tax demands from the Inland Revenue, some relating to four years before.

One demand was for pounds 562, which he sent off to Neville Russell in May. However, demands for the money continued to arrive from the Revenue.

Mr Peck confirmed through his bank that the cheque, made out to the Inland Revenue, had been cashed, and he informed the Revenue.

Eventually, six months later, the Revenue found that the cheque had been inadvertently paid into Neville Russell's account, and the firm paid the cheque over in December.

Neville Russell said in a letter: 'Mr Peck failed to notify us that he was informed by the Inland Revenue that the amount was outstanding.' The bank had also made an error in accepting the cheque.

Mr Peck complained about the firm to the accountants' governing body, the Institute of Chartered Accountants in England and Wales, which investigated the complaint and decided that no action was necessary.

Mr Peck continued to receive tax demands from the Revenue for income dating back to 1986, when his affairs were looked after by Neville Russell. He said: 'At one point I was getting six or seven tax demands a week, some going back six years.'

One aspect of Mr Peck's tax affairs concerned an expenses claim of about pounds 8,000, mainly for travel, which was incurred over four years from 1986.

The evidence for the expenses was among the items retained by Neville Russell, along with more information concerning Mr Peck's tax affairs.

Mr Peck's tax position remained unresolved and a date for a hearing to sort out the bill was set for November.

Martin Mercer, a partner in Mercer Lewin, asked Cameron Clark, his counterpart at Neville Russell, to give him all the information on expenses relating to Mr Peck. He was not sent them. Then the hearing was postponed for other reasons.

Mr Peck then made a second complaint to the Institute of Chartered Accountants. An attempt at conciliation was not successful.

At the beginning of this year, Mr Peck paid Neville Russell pounds 125 to sort out his affairs and give details of them to the Revenue.

Six months later, Neville Russell sent Mr Peck a bill for pounds 655 for additional work, and passed over all the information it had on his expenses.

Mr Peck refused to pay the bill and reported Neville Russell to the Institute of Chartered Accountants for the third time, but the institute's remit does not include disputes over fees.

The institute's department of professional conduct declared the case closed in August this year.

Sarah Allington, head of marketing at Neville Russell, said: 'We have dealt with all Mr Peck's affairs adequately at all times.' She added that the additional fee was for extra work it had to carry out.

People who want to complain about their accountants should contact the institute's professional conduct department.

The institute has a two-tier system for dealing with complaints.

The more serious level involves the institute deciding that the complaint needs to be investigated, which could lead to the company being disciplined.

The second tier aims to conciliate the two parties involved in the dispute. A complainant can appeal if he or she is still not satisfied.

Brian Harris, head of the professional conduct department at the institute, said: 'We manage to satisfy the vast majority of complaints.'

He added that most complaints were dealt with by the conciliation function.

The institute handles about 3,000 complaints a year, half of which are solved through conciliation, the other half of which go on to be investigated. From the half that are investigated, about 350 result in disciplinary proceedings, which can mean a fine or withdrawal of membership.

Institute of Chartered Accountants in England and Wales, PO Box 433, Chartered Accountants Hall, Moorgate Place, London EC2P 2BJ.

(Photograph omitted)