The funds in this case were likely held in their individual name, and a death, bankruptcy, or other could affect the ability to close out and complete the 1031 exchange.The safety and protection of exchange funds should be of utmost importance, which is why you should always work with a qualified intermediary that has some sort of regulatory oversight; not just an internal audit or something, but real regulatory oversight with an outside, independent regulatory audit. 

Having everything in one place not just finances, but also tracking hours for audit or real estate professional status has been a game changer, especially once things get busy.

Not trying to sell anything, but it’s worth exploring some of those platforms if you ever need backup for audit or just want to stay on top of documentation.

If you are audit for some reason, if you then slap together a spreadsheet to record time, the auditors will know right away.

Submitting all financials to auditors for REITs.

As the IRS is gearing up with additional auditors, the low hanging fruit are depreciation schedules.

We just need to pay the auditors to finalize and release.

Are there independent auditors that perform regular reviews or is there potential SEC oversight and do they go after wrongdoing?

It's all online on the county auditor's website. 

and doing away with a 3rd party auditor?