MINUTES. Texas State Board of Public Accountancy November 20, 2014
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1 MINUTES Texas State Board of Public Accountancy The Texas State Board of Public Accountancy met from 10:00 a.m. until 11:14 a.m. on, at 333 Guadalupe, Tower 3, Suite 900, Austin, Texas A notice of this meeting containing all items on the agenda was filed with the Office of the Secretary of State at 9:41 a.m. on November 6, (TRD # ) (ATTACHMENT 1) Board Assistant Presiding Officer John R. Broaddus, CPA Rocky L. Duckworth, CPA Member-at-Large Everett R. Ferguson, CPA Treasurer James C. Flagg, PhD, CPA Susan Fletcher Robert M. McAdams, CPA Secretary Steve D. Peña, CPA Presiding Officer Phillip W. Worley Board Member Absent Donna J. Hugly, CPA Jon R. Keeney, Member-at-Large William Lawrence Others Present Frank McElroy, Esq. Gary McIntosh, CPA Chini Lee Streitwieser, CPA Paulette Beiter, Esq. Ismael Castillo Karen Davis Alan Hermanson, CPA Donna Hiller Joseph Jaffe Marissa Mahoney Virginia Moher, Esq., CPA Michelle Moreno Julie Prien April Serrano Daniel L. Weaver I. Mr. Prothro, Presiding Officer, called the meeting to order at 10:00 a.m. Mr. Treacy called roll and declared a quorum. Mr. Peña moved to excuse Mr. Cluck s, Ms. Hugly s, Mr. Keeney s and Mr. Lawrence s absence from the Board meeting. Ms. Fletcher seconded the motion and it passed unanimously. Also at this time, Mr. Prothro presented J. Randel Hill with a service plaque for 15 years of service. II. III. Ms. Fletcher moved to approve the September 18, 2014 Board meeting minutes as presented. Mr. Worley seconded the motion and it passed unanimously. Mr. Prothro, Executive Committee Chair, reported on the November 19, 2014, committee meeting. Rocky L. Duckworth, CPA Everett R. Ferguson, CPA Member Absent Jon R. Keeney Others Present Bob Owen, CPA Chini Lee Streitwieser, CPA Alan Hermanson, CPA A. Mr. Ferguson moved to approve the Board s Annual Financial Report and end-of-year overview as presented. Dr. Flagg seconded the motion and it passed unanimously.
2 B. Mr. Baker reported on the Board s Sunset Staff Study on Self-Directed Semi-Independent Status of State Agencies dated October C. Dr. Flagg moved to approve the Committee and Board meeting dates for calendar year Mr. Peña seconded the motion and it passed. D. Mr. Prothro reported on NASBA s 107 th Annual Meeting held November 2-5, 2014 in Washington, D.C. He also reported that the committee held a discussion concerning preparation services as they relate to peer reviews. E. Mr. Ferguson moved to approve the following professional service contract as presented. Mr. Peña seconded the motion and it passed unanimously. FY 2015: Behavioral Enforcement Committee consultant: Love & Aaron W. Grimes, PLLC 10/1/14 8/31/15 $25,000 F. Mr. Prothro reported on a thank you note from the public for: 1. Donna Hiller 2. Michelle Moreno 3. G. Ms. Miller reported on plans for the Board s centennial anniversary activities. IV. Dr. Flagg, Qualifications Committee Chair, reported on the November 19, 2014 committee meeting. James C. Flagg, PhD, CPA J. William Kamas, CPA Robert M. McAdams, CPA Roselyn Morris, PhD, CPA ex officio Melanie G. Thompson, CPA Member Absent Karen Davis Gilbert Gutierrez Donna Hiller Daniel L. Weaver Dr. Flagg reported that the committee considered the AICPA s Invitation to Comment on changes to the CPA Examination. The members decided that the committee members would offer individual opinions on the issues raised in the AICPA s survey and provide those to the staff by November 24, 2014 and a consolidated response letter will be prepared and sent to the AICPA. V. Dr. Flagg, Licensing Committee Chair, reported on the plans for the Board s December 6, 2014 swearing-in ceremony. VI. Ms. Miller, Behavioral Enforcement Committee Chair, reported on the October 22, 2014 committee meeting. John R. Broaddus, CPA Donald W. Harcum, CPA Donna J. Hugly, CPA James D. Ingram IV, CPA Ben Peña, CPA, CFE Paulette Beiter, Esq. A. Mr. Peña moved to dismiss the following investigations based on insufficient evidence of a violation of the Act or Rules of Professional Conduct. Dr. Flagg seconded the motion and it passed. 1. Investigation Nos L 1 and L 1 2. Investigation Nos L 1 and L 1 3. Investigation Nos L 1 and L 1 4. Investigation No L 1 2
3 B. Mr. Peña moved to dismiss the following investigations due to voluntary compliance. Dr. Flagg seconded the motion and it passed. 1. Investigation Nos L 1 and L 1 2. Investigation No L 1 3. Investigation No L 1 C. Mr. Peña moved to dismiss the following investigation based on the pending results in another proceeding. Dr. Flagg seconded the motion and it passed. Investigation No L 1 D. Mr. Peña moved to approve a request for the reinstatement of Jason Sparks, a former licensee whose certificate was revoked by the Board as the result of Investigation No L 1. Dr. Flagg seconded the motion and it passed. E. Other The committee considered two other investigations which require no Board action at this time. F. The next committee meeting was scheduled for January 8, 2015 at 9:15 a.m. VII. VIII. IX. Ms. Moher, Staff Attorney, reported on the status of the Enforcement Division s probation monitoring docket. Mr. Hill, General Counsel, reported on the status of investigations into alleged violations of Subchapter J of the Public Accountancy Act, regarding the unauthorized practice of public accountancy. The Board took the following actions on Agreed Consent Orders, Proposals for Decisions, and Agreed Cease and Desist Orders: A. Agreed Consent Orders Behavioral Enforcement Committee Mr. McAdams moved to approve the following Agreed Consent Orders (ACOs) as presented. Mr. Ferguson seconded the motion and it passed. 1. Investigation No.: L Hometown: Oak Ridge North, TX Respondent: Barton R. Payne Certificate No.: Rule Violation: (5) Act Violations: (6), (11) Respondent entered into an ACO with the Board whereby Respondent s certificate was revoked from the effective date of the Board Order for a period of three years; however, the revocation was stayed and Respondent was placed on probation for three years. Respondent was convicted of Misdemeanor DWI and sentenced to two years community supervision and ordered to pay $3, in fines, court costs, and restitution and to complete 100 hours of community service Investigation Nos.: L & L Hometown: Dallas, TX Respondents: Kenneth Aston Meaders Certificate No.: & Kenneth A. Meaders, P. C. Firm License No.: C04252 Rule Violations: , , Act Violations: , (6), (11) Respondent entered into an ACO with the Board whereby Respondent and Respondent firm were reprimanded. In addition, Respondent was revoked for a period of five years from the effective date of this order and ordered to pay an administrative penalty of $10,000; however, the revocation and administrative penalty were stayed and Respondent was placed on probation for five years. In addition, Respondent must pay an administrative penalty of $1,000 within 30 days of the date of the Board order and must take eight hours of live continuing professional education (CPE) in compilations and reviews. Respondent s license has been suspended since November 22, 2010 for failure to accrue sufficient CPE and Respondent s firm license has been expired since Respondent practiced public accountancy and used his CPA designation while his license was suspended. 1 3
4 3. Investigation Nos.: L & L Hometown: Houston, TX Respondents: Daniel Wallace Vornsand Certificate No.: & Daniel W. Vornsand (Firm) Firm License No.: S05432 Rule Violation: Act Violations: (6), (11) Respondent entered into an ACO with the Board whereby Respondent and Respondent firm agreed to the involuntary surrender of their certificate and firm license, in lieu of further disciplinary action. Respondent failed to notify the Board of his change of address and failed to respond to Board communications. 1 B. Mass Hearings Mr. Worley moved to approve the following Proposals for Decision as presented. Ms. Fletcher seconded the motion and it passed unanimously. 1. Respondents: In The Matter of Disciplinary Action Against Certain Licensees for Nonpayment of Professional Fees for Three Consecutive License Periods The respondents failed to pay their licensing fees for three consecutive license periods. Following the public hearing, an Administrative Law Judge (ALJ) of the State Office of Administrative Hearings recommended that the certificate of each respondent still not in compliance be revoked without prejudice. Each respondent may regain his or her certificate by paying all license fees and penalties and by otherwise coming into compliance with the Act. The ALJ found that the respondents violated Section (4) (failure to pay license fees for three consecutive years) of the Act. The respondents, although properly notified, failed to appear, and were not represented at the hearing. No Board Committee considered these actions. (ATTACHMENT 2) through July 29, through August 26, Respondents: In the Matter of Disciplinary Action Against Certain License Holders for CPE Delinquencies The respondents failed to comply with CPE reporting requirements found in Chapter 523 of the Rules and Section of the Act. Following the scheduled public hearing, an Administrative Law Judge (ALJ) of the State Office of Administrative Hearings recommended that the license of each respondent still not in compliance be suspended for a period of three years, or until he or she complies with the licensing requirements of the Act, whichever is sooner. Additionally, the ALJ recommended a $100 penalty be imposed for each year a respondent is not in compliance with the Board's CPE requirements. The ALJ found that the respondents violated Sections (mandatory CPE) and (mandatory CPE reporting) of the Board's Rules, and (CPE) of the Act. The respondents, although properly notified, failed to appear, and were not represented at the hearing. No Board Committee considered these actions. (ATTACHMENT 3) through July 29, through August 26, Respondents: In The Matter of Disciplinary Action Against Certain Certificate Holders for Failure to Complete License Notice The respondents failed to complete their license renewal notices in accordance with Section of the Board s Rules. Following a public hearing, an Administrative Law Judge (ALJ) of the State Office of Administrative Hearings recommended that the certificate of each respondent not in compliance be revoked without prejudice until such time as the respondent complies with the requirements of the Rules and the Act. The ALJ found that the respondents violated Section (12) of the Act (regarding violations of Board Rules). Although properly notified, the respondents failed to appear in person or by authorized representative. No Board Committee considered these actions. (ATTACHMENT 4) through July 29, through August 26,
5 C. Agreed Cease and Desist Orders Mr. Baker moved to approve the following Agreed Cease and Desist Orders (ACDOs) as presented. Dr. Flagg seconded the motion and it passed unanimously. 1. Investigation No.: N Hometown: Houston, TX Respondent: Jerome Charles Griese Act Violation: Respondent entered into an ACDO with the Board whereby Respondent will cease and desist from providing attest services and using reserved terms until or unless Respondent complies with the registration and licensing provisions of the Act, and until or unless Respondent has obtained a license to practice public accountancy. Respondent used the CPA designation although he does not hold a license in Texas. 2. Investigation No.: N Hometown: Austin, TX Respondent: Kevin Stockwell d/b/a Akin Business Service Act Violation: Respondent entered into an ACDO with the Board whereby Respondent will cease and desist from providing attest services and using reserved terms until or unless Respondent complies with the registration and licensing provisions of the Act, and until or unless Respondent has obtained a license to practice public accountancy. Respondent used the CPA designation although he does not hold a license in Texas. X. Mr. Prothro reviewed the schedule of future Board meetings. XI. Mr. Prothro adjourned the meeting at 11:14 a.m. ATTEST:, Presiding Officer, Secretary 1 Mr. Baker, Mr. Broaddus, and Ms. Miller recused themselves from participating in this matter. 5
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