Board Meeting Notes
North Dakota State Board of Accountancy
The meeting began at 11:58 am. Participants: Faye Miller, Pete Hoistad, Nikki Schmaltz, Mandy Harlow, Jim Abbott, by phone: Rick Lee, Mike Schmitz.
MINUTES (1-23-15). Approved [motion: Nikki; 2nd: Pete; carried].
FINANCIAL REPORT (1/1/15 – 3-31-15; checks 15061 - 15136). Jim will check that a replacement bonus check was handled properly. Mike moved approval; 2nd: Nikki; carried.
2013-8. The group discussed handling the upcoming visit; time will be limited, unless new information is provided.
All reinstatement applications (Khalil Muhammad, DeeAnn Thompson, Kenneth Viall, Eric Fugleberg, Michael DeWall, Anwar Aziz) [Motion: Pete; 2nd: Mike; carried].
The Justin Kill application was approved [motion: Peter; 2nd: Nikki; carried]. Omar Graham had requested a class be counted in the accounting concentration; the Board did not grant the exception.
Attorney Jack McDonald joined the meeting and was briefed.
2013-8. The complainant joined the call, and was invited to share non-litigated issues, and the desired outcome. Three concerns were cited and discussed: fraudulent invoices, false claims about ownership, and dissipating company reserves in use as loan collateral. Rick left the call during this segment of the meeting. Faye indicated the board understands the harm, and does not take CPA error lightly, and will address the matter. The complainant left the meeting.
Jack stated that nothing had been raised that wasn’t part of the trial to some extent. Why some things were not addressed is a legal issue, and both parties had good legal counsel. An appeal was the opportunity to bring up other issues. Other comments among the group included: the transactions at issue are not obvious fraud; in private business things aren’t always well documented; the parties could have had differing understanding about what “5%: meant, and when it became obvious, future filings were changed.
No further action will be taken against the CPA [motion: Mike; 2nd: Nikki; carried].
Jack will issue a letter to the complainant; Jim will send meeting minutes to Jack this weekend.
Jim reviewed the mobility survey results. A law change seems necessary, in order to implement international mobility. The definition of “state” could be broadened to other countries, and the recognition process could be made more locally-controlled. Jim will add these matters to the agenda file, for consideration in Spring 2016.
Removing the IQEX requirement would facilitate reciprocity, but this will not be pursued.
Faye and Mike will serve on the Joint Compensation Committee. The group discussed the process.
The Board will discuss the issues in advance of the joint meeting, without staff present.
Group discussed the make up of the board..We want the tax, audit and accounting disciplines covered among the board, as well as the non-public sector, and we would want to avoid concentration in a single firm.
We will share input with the Nominations group, in connection with the joint meeting.
NASBA U. Mandy reviewed the meeting, and mentioned using just two international education evaluators -– FACS and NASBA [approved on motion by Pete; 2nd: Mike 2nd; carried]. This will be effective for initial applications received after June 1.
Jim will include the Application Audit report in the next board meeting packet.
Jim reviewed proposed changes that would simplify the educational interpretations in use. The issue was deferred to the next meeting. Further work will be done, such as learning how other states address the matter, and considering the “rubric-only” and a “rubric + title” approach.
Faye indicated she had submitted her name for a NASBA at-large board role.
NEXT MEETING: May 22, 10 am by phone.
The joint meeting team will then have authority to make commitments on behalf of the board.
SUBSEQUENT MEETING: July 22, 12 pm, in Grand Forks.
The group discussed the question of board responsibility when aware of an issue of concern. An affected party may submit an anonymous complaint, and there is one currently in process. No concerns or questions were raised with the files closed by staff, or those that remain open.
UNUSED CANDIDATE FEES
Jim notified the board that unused exam fees could be requested paid to the board. We will ask for these funds going forward, and the last 2 years, and also inquire about how far back those fees could be refunded.
ADJOURNED: 3:12 pm.
N. D. STATE BOARD of ACCOUNTANCY
The meeting began at approx. 12 pm. Participants were Faye Miller, Mike Schmitz, Pete Hoistad, Nikki Schmaltz, Rick Lee, Jim Abbott, Mandy Harlow.
MINUTES (Oct. 24, 2014) were approved [Motion: Rick; 2nd: Mike & Nikki; carried].
FINANCIAL REPORT (12-31-14) – were approved [Motion: Mike; 2nd: Pete; carried].
Pete reported on his oversight role, indicating he receives bank statements, received a full GL report and had noticed a coding error to be fixed.
The Khalil Muhammad application involves a foreign background evaluation and extra fee; the candidate will be asked to cover the fee (after checking with legal counsel), though we will cover one report already initiated). We will use this applicant-pay policy with future applicants. Reinstatement was approved for Arlene Erdahl, Karmen Freemen, Evelyn Nagel and Joel Scheving [Motion: Pete; 2nd: Nikki; carried].
SPECIAL APPLICATION SITUATIONS
A request had been received and approved (with consultation with 2 board members) for added break time due to being a nursing mother [H. Brink]. Staff will have discretion to approve such cases in the future [Motion: Mike; 2nd: Pete; carried].
An application [J. Stevens] had an omitted item, but the applicant provided an explanation; the application was approved [Motion: Pete; 2nd: Mike; carried].
Another application [J. Kill] had omitted items; we will hold on approving this application, pending receipt of more information.
An application [S. Gujjar] had been denied by staff based on a foreign evaluation. Allowing 3 Econ. credits for a commercial banking class (after consulting with Dr. H. Wilde), the applicant was short 3 credits. He wanted to be allowed 6 credits; the Board did not approve.
An applicant’s evaluation [M. Devan] indicated that 7.5 accounting hours were entry level and therefore not counted; the applicant disagreed; the application was denied [Motion: Nikki; 2nd: Pete; carried].
MN School of Business credits are allowable by the MN Board of Accountancy, but are not accepted for transfer by UND or UM - St. Paul. We will not allow the credits. We allow Northland Tech. College credits in general education, but not the concentration; in this case UND accepts the credits in transfer.
We have notified NASBA that we want them to take the lead on this project. However, we will prepare a survey of firms, circulate the questions among the board, and conduct an online survey of firms, to assess interest in having the mobility prospect pursued. It was mentioned to include a caution about work being taken on only when there is adequate training. Jim will check legal counsel re. gathering Board input by mail, about the survey wording.
PEER REVIEW CHANGES
Jim explained the administration of the current system – Society management, Board staff collects documents through the FSBA or the firm. The PR chair has met with the Board in the past. Concern was expressed about the future – the potential of PR becoming more punitive and regulatory, and there being fewer reviewers.
NEXT MEETING: April 24, at noon, in GF.
2014-4. We will await the results of an inquiry in process through another agency.
2014-5. This case was considered to not be outside the purview of the Board.
2013-8. The complainant will be asked to supply documentation of his 3 claims, which will be circulated to the Board. He will be offered time during the 4/24 meeting, and will be asked about the outcome he is seeking (if financial, the Board does not have such authority).
2014-2. The accountant’s certificate has been revoked.
2014-3. The website now includes disclaimers, and the “CPA Solutions” name is not included.
2014-1. The website now includes a disclaimer; they indicate intent to use one in future advertising.
2014-6. The individual has obtained ND licensure.
2014-7. The individual has signed indicating intent to not provide services until licensed in ND or MN. We will notify the MN Board.
Jim reported that he had directed a party writing about California firms to the CA board. He reported also on lists received from NASBA (PTIN holders claiming to be CPAs, and EBP audits of ND clients], and the related staff work.
2014-8. We will write to the individual, indicating we saw them associated with “CPA”, inquire about services he is providing, and recommend adding the term “former” to the term “CPA” in his online bio.
Jim commented on his legislation review for the Society, which also identifies bills that relate to the Board. He will check with NASBA about related service they provide.
Jim commented on the PCAOB materials available for review, including 4 not listed in the agenda.
ADJOURNED at 2:10 pm.
N.D. STATE BOARD of ACCOUNTANCY
The meeting began at 8:50 am. Participants were: Faye Miller, Pete Hoistad, Mike Schmitz, Rick Lee, Nikki Schmaltz, Ken Bishop, Dan Dustin, Mandy Harlow and Jim Abbott
Ken Bishop and Dan Dustin shared addressed various NASBA and accounting matters, including:
§ NASBA U provides an orientation for board staff
§ NASBA provides a foreign education evaluation service
§ Whenever the Board faces a challenge, it can call on NASBA for assistance
§ Florida has found itself having to accept “life credit” education, due to it being offered by an entity that is accredited by an accepted agency
§ A couple of states had removed their educational requirement, in one case by accident
§ A few states have passed provisions allowing for “nano-learning” (10” units); NASBA has concern about enacting such changes before the UAA has been revised.
§ Current issues include firm and North American mobility. North Dakota could be a pilot in this arena. There is a fair amount of Canada-U.S. business activity, but serviced through Manitoba CA connections. With mobility, clients could be served by the same accountant, and it would remove the risk of violating laws of the other jurisdiction.
The repair regulations were raised, and the possibility of our having future complaints about accountants not filing as needed (declaring an intent to follow the law).
NASBA will opine on the audit quality paper; they have some concern, but there is much positive in the paper. Editing has already been done.
Some candidates who do not speak English have taken a review course and been able to pass the Exam. [However, this may be a matter of limited verbal skills, yet adequate English reading ability].
A point was made about the paper test format involving characteristics not present in the computer format.
Also mentioned was the argument that “entry level skills” needed in a large firm would be different than those in a smaller firm or as a sole practitioner. Dan and Ken departed at about 10:10 am.
MINUTES (7/23/14; 8/7/14)
These were approved [ending time of 8/7 minutes should be 3:17], on motion by Pete; 2nd: Mike; carried.
The income statement and balance sheet will be reprinted and sent to the members.
Disbursements and the financial statements were approved [Motion: Nikki; 2nd: Rick; carried]. The audit report (6/30/14) was accepted [Motion: Pete; 2nd: Mike; carried]. The Board share of any unfunded pension liability will need to be disclosed and booked next year.
A motion was made to authorize updating of all signature cards (listing the Treasurer and E.D.), and to authorize all related resolutions (they are to be ratified by the Board); [Motion: Pete; 2nd: Mike; carried].
The following reinstatements were approved: John Testa, Carter Broton, Twylah Blotsky, Timothy Taylor, Catherine Lundberg, and LuAnn Milner [Motion: Nikki; 2nd: Pete; discussion; carried]. There are two in-state firms among those licensees not renewing, which is an issue for peer review, and will be public record.
An Exam candidate had requested an extension of conditioning time, in light of a medical matter. The candidate will be asked to let the Board know where things are in mid-2015; considerable time is still remaining on her current conditioning.
There are documents open for comment, relating to CPA Exam changes, and Audit Quality measures. We will not be commenting as a Board. Issues that have arisen with the DOL and GAO are felt to be tarnishing peer review and self-regulation, but in some cases, the issues cited are very immaterial. There is potential for agencies to take over the firm review process.
NEXT MEETING: Jan. 23, 2015 (11:30 lunch; 12 pm meeting). Pete offered the firm’s video conferencing.
Jim reported that the idea of changing payroll agents was not favored by the other staff members.
2013-8. Background was shared. The complainant will be offered a 45” block in the next meeting. Legal counsel will be asked to connect remotely.
2014-2. Revocation will be pursued.
2014-1. One company website has a disclaimer; the other does not. This case will be further worked.
Cases involving advertising issues and holding out without a state certificate will be handled by staff, and shared with the Board.
2014-3. This case is not completed. The reference to CPA (website hosting or platform) is not desirable, but may not be curable, but a disclaimer could be used to clarify.
A licensee had raised concerns with the handling of complaint, but has since withdrawn the matter.
The group discussed this issue which had been raised earlier by Mr. Bishop. Comments included:
- learning another country’s tax law doesn’t make sense, although compilations could be done in the U.S.
- such a system would remove the risk of a CPA inadvertently breaking a law
- is this a step toward one North American credential?
- it may help with recruiting
- it’s unclear how much activity we have within the state
- for ND licensees, what are the upsides and downsides?
- we could ask what being a pilot state would mean to us
- we could meet with Canadian regulators; but we want to have NASBA involved.
We will notify NASBA we are interested in exploring the issue, with NASBA leading the effort. We first need to know about the process and the “end game” (what problems is this solving?).
Jim will explore what occurred with WA, who had explored this same issue.
Adjourned at 12:30 [Motion: Pete; 2nd: Mike].
N.D. STATE BOARD of ACCOUNTANCY
In attendance were Faye Miller, Nikki Schmaltz, Rick Lee, Peter Hoistad, Mike Schmitz and Jim Abbott.
The Board’s action is open to the public, but it was the sentiment of the group to not publish the discipline – either locally, or on the website or NASBA Accountant Licensing Database.
The meeting ended at approx. 2:17.
N.D. STATE BOARD of ACCOUNTANCY
Meeting Notes: July 23, 2014
The meeting began at about 1:30. In attendance: Nikki Schmaltz, Rick Lee, Mike Schmitz, Faye Miller, Peter Hoistad, Mandy Harlow, Jim Abbott, Len Splichal, Patrick Kautzman
PAYROLL AGENT CHANGE
Jim reviewed the staff discussion guide included in the agenda packet. The guide will be revised and shared with Patrick and Pete for review. Jim will then visit with staff.
An additional 1% COLA was proposed by the Society; the group was agreeable with the change. Patrick and Len left the meeting.
Faye Miller was selected president [Motion by Pete; 2nd: Rick; carried]. Pete was selected Secretary [Motion: Nikki; 2nd: Mike; carried].
Jack McDonald joined around 2 pm. He mentioned that the group is not obligated to follow the judge’s action.
The subject of the complaint joined the meeting, and provided history and explanation about the matter, including that he was trying to avoid any client confidentiality issues that might have arisen. The complainant had tried to run the firm, and eventually the CPA removed him from the accounts, moved money out of the firm, and filed for separation. The CPA didn’t want the complainant to have access to SSNs and names, but did regularly provide financials and check registers.
There were no Board questions, other than about whether the ethics CPE was completed yet; it has not.
The CPA left the meeting. Jack McDonald stated that the Judge cited other cases, because of the duty to fellow shareholders; it was not a CPA issue.
The appeal process is available to contest a decision considered incorrect. The CPA did act unilaterally, and isolate the other shareholder, though perhaps he prevented a problem from occurring.
The Board agreed to amend CPE completion and fine payment as due 9/30 [Motion: Pete; 2nd: Nikki; carried]. Pete will check into an appropriate ethics CPE option. Jack left the meeting.
Jim briefly reviewed the budget, and it was approved [Motion: Rick; 2nd: Pete; carried].
LEGAL ISSUES / BACKGROUND CHECKS
Jim reported on information gathered on other states’ practices and 3 recommendations –
1. Conduct a criminal background check of reinstatement applicants, when it has been at least one year since they were licensed with this Board. For all other applicants, conduct a cursory web screening for legal issues.
2. Amend the self-disclosure sections on each application form, to focus the reporting of legal issues (Exam, Exam re-app., Reinstatement, Reciprocal & Grade Transfer).
3. The Board will address all infractions disclosed – i.e. felonies or any crime involving theft, dishonesty or fraud.
There were no objections to using these practices.
REINSTATEMENTS & APPEAL
Four reinstatements were approved (John Mareck, Barbara Hoffman, Michael Tobiason, Valerie Ndje-Nlend) [Motion: Mike; 2nd: Pete; carried]. An appeal was shared, to allow professional credential coursework to count toward the education requirements. This applicant has been accepted into a graduate program (perhaps on the basis of the credential coursework). Also, UND is willing to accept such credits if evaluated by a service. However we don’t know what, if any, guidance UND gives evaluators. No change was proposed to our policy.
The group discussed the idea of producing a newsletter, which NASBA would design. We now have access to the NDCPAS newsletter, and have a full website. There was some reluctance, and no action was taken. .
MINUTES. The June 2, 2014 minutes were approved (Motion: Nikki; 2nd: Pete; carried].
NEXT MEETING: Oct. 24, noon, at Brady Martz, in Grand Forks. [The start time has since been changed to 9am, and a dinner session has been added for 6pm on October, 23, 2014.]
NASBA VOLUNTEER SERVICE
We will no longer fund NASBA volunteer activity [Motion: Pete; 2nd: Rick; carried] (applies to Board & staff).
2014-2. The group agreed to revoke the CPA’s certificate in light of thefts [Motion: Mike; 2nd: Pete; carried].
2013-10. There doesn’t appear to be an infraction; no further action will be taken, other than notify the CPA.
Mandy left the meeting.
2013-7. The CPA indicated that their certificate was lost in a fire; there was no objection to a fee refund.
Meeting with the Governor was mentioned, but this will not be pursued until we have an issue to address.
Jim will notify the group before registering for NASBA meetings. The meeting ended at 3:47
North Dakota State Board
FINANCIAL REPORT (April 2014)
The financial statements and disbursements were approved. Pete and Nikki will represent the Board at the June 2 Joint Meeting (Motion: Rick; 2nd: George; carried).
PERFORMANCE / COMP.
The group discussed staff comp. matters, including E.D. performance and comp. The group is comfortable with the current comp. package; they also discussed staff performance and is happy with the staff.
The group felt that the 2015 board position should be a smaller firm practitioner, perhaps with audit & tax experience, perhaps a newer professional. It will be Faye’s 1st term that is ending, and she is eligible for reappointment. Pete and Nikki will share input with the NDCPAS Nominations Chair.
BUDGET (2014-15). Jim presented the budget; approval will await the next meeting.
Reynaldo Correa was approved. A second applicant will await a background check. Staff should conduct background checks on all reinstatements.
There were four applications involving such infractions as DUI, and reckless driving.
The group discussed how to handle various infractions, and the possibility of background checks of all applicants. Jim will inquire how other states deal with this matter, and bring details and a proposal to the next meeting. The four applicants were approved.
We will continue monitoring repetitive test writing situations. A plaque was presented to George Kelly, in recognition of his board service.
COMPLAINTS / DISCIPLINE
The Debra Jean Brown certificate will be revoked, and 2013-14 license fee refunded on receipt of the certificate. A civil case was discussed; the Board will invite the CPA to supply information.
North Dakota State Board of
CPE FORM SAMPLE
SPECIAL EDUCATION SITUATIONS
A company has been noticed using the term “agaccounting”; legal counsel will be asked to contact the entity about the use of this term.
ADJOURNED at 1:35 [Motion: George; 2nd: Pete].