Board Meeting Highlights
North Dakota State Board of Accountancy
Meeting Notes: Feb. 7, 2014
Participants: Nikki Schmaltz, George Kelly, Rick Lee, Faye Miller, Pete Hoistad, Mandy Harlow, Jim Abbott
MINUTES (11-15-13): Approved [motion: Faye ; 2nd: Pete; carried]. Jim mentioned a spelling error.
Jim and George shared comments. Funds will be moved out of checking. The financials were approved [Motion: Pete; 2nd: Rick; carried].
CPE FORM SAMPLE
The group addressed a question which arose with one of the board-reviewed CPE forms – the class taught was quite basic. It is not current practice to ensure that those moving into public practice have taken relevant recent CPE. There is concern with the “lightness” of some of the CPE that is being taken. Also raised were the level of attentiveness in CPE classes, and that perhaps pre-approval should be considered. NASBA has a task force that will be addressing CPE. Pete moved to take no action on the specific case; 2nd: George; carried. We will notify the CPA involved. Jim will suggest a discussion point for the June NASBA meeting: how specific are state CPE requirements (do they check for practice-relevant CPE, use self-study limits? ); he will suggest a related quick poll so that information is on hand.
Reinstatement was approved for David Lakefield, provided the firm permit is also reinstated [Motion: Pete; 2nd: Rick; carried]. Reinstatement fees will be expected for firm and individual; (Jim will seek legal guidance if the regulation is unclear). Another applicant was deferred until a background check is completed [Motion: Pete; 2nd: Faye; carried]. Reinstatement was approved for John Anderson, pending background check [Motion: Pete; 2nd: George; carried].
SPECIAL EDUCATION SITUATIONS
A pending application includes some coursework in pursuit of a foreign credential. It was agreed that professional association education programs will not be considered as college credit [Motion: Rick; 2nd: George; carried]. We will notify the applicant of the denial, due to this policy. Another applicant was seeking college credit for military education that was not approved by a college. The added credit was denied, but internship credits will be offered as a solution for the remaining credits [Motion: Pete; 2nd: Rick; carried].
Case 2013-6. A board member reported to the group, indicating that both parties seemed to be at fault, various concerns were raised, and the CPA believes he acted properly and that the client is trying to punish him; there doesn’t appear to be any substance with which to act against the CPA; in addition it appears that the CPA is leaving the profession. A motion passed to notify both parties that the Board has reviewed the matter, and will not be acting in the case [Motion: Pete; 2nd: Faye; carried].
A company has been noticed using the term “agaccounting”; legal counsel will be asked to contact the entity about the use of this term.
PCAOB review reports of two state-based firms were reviewed by a board member. Rick reported on the Widmer Roel documents, Nikki on the Brady Martz documents. The PCAOB reviews differ from those of the peer review program, in that there is no opportunity for the firm to explain the rationale or professional judgment behind an action. A peer reviewer discusses the findings, so they have a chance to understand the process involved.
ADJOURNED at 1:35 [Motion: George; 2nd: Pete].
North Dakota State Board of Accountancy
Participants: Nikki Schmaltz, George Kelly, Faye Miller, Rick Lee, Pete Hoistad, Jim Abbott
The meeting began at 12:06, with a welcome to the new board member, Peter Hoistad.
George nominated Nikki for president; seconded by Rick, and carried. Rick nominated George for Secretary-Treasurer; seconded by Pete, and carried.
MINUTES (MAY 6 and 23)
Approved by motion from Rick, second from George; carried.
FINANCIALS (June 30)
Jim will correct the payables account to $10,000. He will check into obligations to use the Bank of North Dakota for credit card processing and the related checking account. We will start paying payroll taxes and retirement deposits on the payroll date. George moved approval of disbursements (14482 to 14576), and the financial statements; second by Pete; carried.
The group discussed the idea of changing the payroll agent to NDCPAS, which could reduce retirement and health insurance expenses. The new health insurance exchange plan rates should be available Oct. 1, and we can examine those options. Jim will pursue a PERS response about changing agents, and will check on the impact of leaving the defined benefit plan before retirement.
E.D. PERFORMANCE / COMPENSATION
The group met in executive session, with Jim absent. When he returned, comments were shared:
The pay scale is maxed out, and we can’t really “grow the business”, we just need to keep properly focused and the group concurs with the focus areas Jim had proposed; doing these well is imperative, though won’t affect compensation. The group is comfortable with current compensation, and if savings are achieved in the payroll area (being explored), the group would be inclined to maintain a consistent overall pay package. Travel is a possible benefit not applicable to other staff. The group is happy with performance. One desired change is to not provide a “tentative conclusion” to complaints; Jim will change this approach.
The group will conduct a review of a sample of CPE forms in the future.
The budget was approved, with adding $5K in board expenses and $2K in staff travel [motion: Pete; 2nd: Rick; carried].
FINANCIAL STATEMENT / NON-CPA FIRMS
Jim will notify AgCountry legal counsel that we are awaiting action on a related exposure draft before issuing a decision, and that we plan to alert non-public CPAs about current restrictions on CPAs issuing “plain paper” financials. A message will be issued to all in-state non-public licensees.
REINSTATEMENT: There no objection to reinstatement of Barimore Maring’s CPA certificate.
NEXT MEETING: Sept. 22 and Nov. 15 were set as possible meeting dates.
FIRM OWNERSHIP. A question was received as to whether corporate entities could own part of a CPA firm. We will seek guidance from legal counsel on the issue.
FOREIGN EDUCATION EVALUATION. Approval of the NASBA service will be deferred. We will require all applicants to obtain a NACES.org member evaluation of foreign education.
SYSTEM SECURITY. Jim had notified Board earlier that our computer system is quite secure.
Case 2013-3: closed [Motion: Rick; 2nd: Pete; carried].
Case 2013-1: there was no objection to closing the case.
Case 2013-4: for information (staff handles these “use of accounting” cases, when the party agrees)
ADJOURNED: 3:09 pm [Motion: George; 2nd: Faye; carried]
Conference call participants: Nikki Schmaltz & George Kelly in Fargo, Rick Lee, Ron Johnke, Jim Abbott, Faye Miller. The meeting began at approx. 11:10 am.
The purpose of the meeting was to address the work performance of Jim Abbott, in advance of the Joint meeting, next week. Jim left the meeting.
Meeting Notes: May 6, 2013. 12:00 noon
Participants: Nikki Schmaltz, Rick Lee (by phone), Ron Johnke, Mandy Harlow, Jim Abbott, George Kelly & Faye Miller. The meeting began at 12:02.
MINUTES (1-25-13): Approved [motion: Faye; 2nd: George; carried].
Jim commented on a few balance sheet and income statement items, and reported on the remodeling project. He will check that the Society reimbursed the Board for ½ of the staff dinner costs. He will also check on the -$929 miscellaneous income item and the YTD staff compensation accounts, and report back to the group. The financials and disbursements 14419 to 14481 were approved (contingent on Jim response on the questions raised) [motion: Faye; 2nd: Ron; carried].
Various adjustments were made, the final approval will be in July.
George and Nikki will serve on the Joint Compensation group, and have authority to commit the Board. Nikki will share compensation information with George that Faye collected last year.
The question was asked if there were any special projects the Board would like staff to focus on. It was suggested that more information on national developments be shared with the Board. Jim will start sending the Board a copy of his AICPA meeting notes.
The group discussed the scanning of licensee files. It was agreed that we will change the retention period for various files, such that they will be shredded when the related data is added to the database. We will ask the firm that conducted a recent systems review if their work included access testing; if not, we will ask that they do so. The credit card firm that does testing of our office will be asked whether they include access testing.
PEER REVIEW AND CPE
It is renewal time now, and we will be requesting peer review confirmation of those firms who do not participate in the national Facilitated State Board Access database.
All CPE forms are checked, with question items pursued. In addition a small-sample audit is conducted; results are very good.
There was discussion about the need for an outline for programs; it is a required feature.
REINSTATEMENT & ACCOMMODATIONS
There were 3 reinstatement requests: Rodney Williams, William Sailers, James Knoll. There were no objections. An exam candidate previously granted additional writing time would like a reader, as she has in college; we will pay for this service. Nikki had agreed to an accommodation for another candidate, but it was not used. The Board is fine with the president handling such situations.
For reinstatements, we will continue to charge a current year license fee, even if close to year-end.
Jim explained the Society’s involvement in legislative matters, and that he identified a few issues of possible impact on the Board. He will need to check on the status and requirements of HB 1309.
The group approved an earlier Board decision to support Jim’s nomination for the Sachs Award [motion: George; 2nd: Ron; carried].
One staff member’s time has been reduced 20%, without any replacement hiring. There are no current issues, although it may affect their assistance with special projects and new activities.
Work had been done in the past, examining the various office duties, and whether each area was adequately covered by other staff. There were a few uncovered areas, such as complaints.
NASBA EDUCATION EVALUATION SERVICE
We will revisit the question of approving this service. Jim will poll other states in the region about their experiences with the service.
2013-2: No objection to closing.
2013-3: Questions will be posed of the firm owner.
2013-1: the client is waiting on 2 tax returns; we will close the file when they are received.
Jim reported on an issue he had pursued, though not a formal complaint; it has been resolved.
We will plan to invite Farm Credit and our legal counsel to join us in September. We will discuss the matter in July.
North Dakota State Board of Accountancy
Participants: Nikki Schmaltz, Rick Lee, Ron Johnke, Mandy Harlow, Jim Abbott, George Kelly & Faye Miller. The meeting began at approx. 12.
MINUTES (Dec. 31, 2012): Approved [motion: Faye; 2nd: Rick; carried].
Jim shared some comments on the financials, including a mention that vacation / sick time accrual levels have declined about 10%. There was discussion about why the budget shows a net income of -$1700. Jim will check the investment account; the report balance differs slightly from the bank statement. The FICA and Federal tax payable accounts will be brought to zero at 12/31/12. The Dec. 31 financial statements and disbursements 14368 to 14420 were approved [motion: Rick; 2nd: Ron; carried].
Three reinstatements were approved – U. Sheikh, R. Emerson (after CPE is complete), and J. Bushard [motion: Faye; 2nd: George; carried].
SB 2150 proposes to limit board member per diems. Jim will watch the bill and inform the Board; he may provide legislator names to the board, for contact, if the bill is passed out of the Senate. HB 1309 will eliminate reporting of agency paid dues, etc. If this bill is not passed, we’ll need to check whether reporting is expected of our agency. SB 2232 changes definition related to services, and exempts business-to-business sales.
A letter was received regarding a NASBA position, there were no requests for a copy.
Four cases were reviewed. There was no objection to closing all four (2012-2, 2012-3, 2012-4 [at Feb. 5, after checking the firm’s website], and 2013-1 [at Jan. 31, unless the CPA doesn’t provide returns as they committed to do]).
Jim reviewed the situation of a licensee disciplined by another state, and is now reactivated and has complied with the stipulated terms.
NEXT MEETING: Monday, May 6, 2013, at noon, at the Grand Forks Brady Martz office.
ADJOURNED: at 1:05 [motion: George; 2nd: Rick].
NEXT MEETING: Nov 15, 12 pm, at the Brady Martz office in Grand Forks.
NDSBA, 2701 S. Columbia Rd., Grand Forks ND 58201. 1-800-532-5904 Fax: 775-7430