Dakota State Board of Accountancy
North Dakota State Board of Accountancy
MEETING NOTES: July 25, 2016
The meeting began at 12:05.
OFFICER SELECTION. Mike was selected as president [Motion: Pete; 2nd: Nikki; carried]. Pete was selected to continue as Secretary [Motion: Nikki; 2nd: Patrick; carried].
FINANCIAL. Nikki moved to change account signers to Mike and Pete; 2nd: Peter; carried. Jim will remove the $3 April retirement balance. A travel expense accrual will be booked. Reserves are now at 60% of expenses (the target level). Jim will check on the variance in current & prior year fixed asset values. Check 15476 was not in the transaction register. We will start cutting off the signature area of voided checks. The financials were accepted [Motion: Pete; 2nd: Nikki; carried]. Pete provided a review of his oversight. Overmoe Nelson will conduct the audit [Motion: Pete; 2nd: Faye; carried].
APPLICATIONS. Reinstatement was approved for Gregory Saylor [Motion: Nikki; 2nd: Patrick; carried]. It was noticed that a licensee had been holding out; she has agreed to stop the related activity.
CPE REVIEW. CPE forms is each reviewed as they come in. Mandy does an audit of 10, plus 10 "other state" exemptions. Board members will receive 10 each, for their review, approximately October.
MINUTES (MAY 4). Approved [motion: Faye; 2nd: Nikki; carried].
RULES REVIEW. Jim reviewed the various rule changes agreed to, and
those not yet settled. The group discussed the proposed change in
the late fee due date. It was agreed that licenses would be made valid
July 1 through July 31 (13 months), with the late fee due August 1;
CPE period will still end June 30. Jim will revise the rules where
EDUCATION. Unaccredited college credits are acceptable, if accepted for transfer credit by an accredited school.
RECIPROCITY. Jim had provided a draft response, which will be submitted [Motion: Nikki; 2nd: Pete; carried].
WEBSITE. We will continue as is, hiring assistance with the annual renewal form. There was some sentiment that we should not invest much in the design aspects of the site.
VACATION LEAVE. The Board was agreeable with providing a 5th week of vacation at 20 years of service. Excess at Dec. 31 will be lost, but subsequent accruals of vacation do not stop.
DISCIPLINE REPORTING. The group was agreeable with providing discipline information to the NASBA system, but limited to 7 years of history, and only true discipline action, not relinquishment for lack of payment, etc.
INSURANCE COVERAGE. There was some preference for obtaining a quote from a different vendor. We will check on the coverage provided in the Risk Fund, and whether we are required to participate. If we purchase D&O coverage, it should pay after other coverage is used up.
NEXT MEETING: Nov. 11, Fargo, at 11:30 am. Eide Bailly.
OTHER. A report had been received, regarding multiple Exam attempts.
COMPLAINTS. 2016-2. Mandy and Pete provided background information.
There were no engagement letters. The accountant was working for both
sides of the transaction. The CPA thought he would drop the collection
effort. There has been no further action. Business practice was less
than preferred; but nothing unethical was found. The accountant may
not have disclosed the potential conflict. The matter will be closed
[Motion: Nikki; 2nd: Patrick; carried; Pete abstaining].
PERFORMANCE & COMP. Mandy left at about 3:07. E.D. compensation will remain at its current level. The group provided input on performance. An executive summary of complaints is preferred, and added attention to the financials; perhaps a board member could review them in advance. Jim represents us well, and is involved. He has done well with the rules review process, and is a good communicator. The group discussed a staffing matter, and talked about pre-retirement notice (2 years seemed fine). Jim will work on a transition issues list.
ADJOURNED: 3:53 pm.
North Dakota State Board of Accountancy
MEETING NOTES: May 4, 2016
The meeting began at approx. 12; in attendance were: Faye Miller, Rick Lee, Mike Schmitz, Pete Hoistad, Nikki Schmaltz, Mandy Harlow, Jim Abbott
MINUTES (2-12-16): Accepted [Motion: Pete; 2nd: Mike; carried]
BUDGET: approved as proposed [Motion: Pete; 2nd: Mike; carried].
We will accept all scores earned during a valid testing timeframe as designated by NASBA etc. (ie. when they are extended for some reason) [Motion: Pete; 2nd by Mike; carried].
Nikki and Faye are authorized to act for the Board re. salaries, in the joint process [Motion: Rick; 2nd: Pete; carried].
NEXT MEETING: July 25 at 12 noon, at Brady Martz, Grand Forks
A plaque was presented to Rick Lee, whose 10 year board term is ending.
E.D. goals were passed out.
Jim suggested not eliminating the notary signing of applications; the requirement doesn't seem much of a burden.
2014-4 closed. Various allegations were made, but no fraud appears to be involved, and there is insufficient evidence provided for Board action.
Jim briefed the group about several unwritten "complaint" matters that had come to the office's attention.
Staff left the meeting at approx. 3:15. The Board visited about staffing matters, adjourning at approx. 3:30.
North Dakota State Board of Accountancy
The meeting began at 9:02; in attendance were: Faye Miller, Nikki Schmaltz, Rick Lee, Mike Schmitz, Peter Hoistad, Jim Abbott. Tracee Buethner and Mandy Harlow were present during part of the meeting.
MINUTES (11/20/15). A motion was missing the second [Nikki]; the minutes were approved [Motion: Pete; 2nd: Nikki; carried].
Jim will change the rounding setting, so the net income numbers match. The financial statements were accepted [Motion: Mike: 2nd: Rick; carried]. Pete reported on financial oversight. A deferred comp. withholding issue was mentioned. The Board has latitude with how it invests excess funds, but no changes will be made in its approach.
POSSIBLE CPE CHANGES
Tracee introduced 2 possible rule changes. ND is one of three states with less than 120 credits required. Pete moved to pursue the proposed ethics rule change (3-03-01-01) and removal of a 2003 transition paragraph, but not the proposed temporary practice changes; 2nd: Rick; withdrawn. Mike moved to amend (use an 8 credit requirement over 3 years); 2nd: Faye; withdrawn.
Peter moved to appoint a 3-organization committee to work on rule changes, with Faye & Mike representing the Board; 2nd: Nikki; carried. This group will look at the whole set of rules, including the 60 credit CPE level for non-public, the items not agreed by the CPE committee, retired provisions, etc.
Reinstatement was approved for Jeffrey Johnson, Goldie Roberts, Brett Ehrhardt, Shane Monda and Sandra Daby [Motion: Peter; 2nd: Mike; carried]. Added writing time was approved for Ashley Freitas [Motion: Nikki 2nd: Rick; carried]. No action will be taken on securities-related information obtained about a licensee [Motion: Pete; 2nd: Mike; carried]. An exam applicant, with a misconduct allegation, will be allowed to write, but will be reminded of the licensing conditions, including the character provision [Motion: Nikki; 2nd: Pete; carried].
We will not proceed with this project, due to insufficient CPA interest [Motion: Mike; 2nd: Pete; carried].
NEXT MEETING: May 4, at 12, at BMA – Grand Forks.
ANNUAL JOINT MEETING
Faye and Nikki will be the board representatives to this meeting, which will also address expanded vacation time.
The group also addressed time out of the office, and other staff matters.
Pete reported on a Jan. 27 application review. Files were complete, other than a file without scanned references.
Credit card data will no longer be accepted by paper. Eliminating the application notary was discussed and will be addressed again in May. Jim will visit with NASBA testing personnel about the practice.
Various other items were briefly addressed, such as future expansion of test windows (for which Jim will prepare a motion), a score release delay, elimination of the $100 reinstatement fee for retired accountants, etc.
Two matters were addressed: one was “unwritten” and no action was initiated. The second is an older matter, for which we will make another attempt in about 60 days to obtain information on any possible malpractice.
ADJOURNED at 11:33 am
N.D. State Board of Accountancy
Meeting highlights Nov. 20, 2015
FINANCIAL. Jim will check whether Board funds can be invested in other vehicles, such as a Bank of ND fund. July to September expenses were approved (Motion: Peter; 2nd: Nikki; carried). The June 30, 2015 audit report was approved (Motion: Nikki; 2nd: Rick; carried). A capitalization policy was approved (expensing expenses under $500 (Motion: Rick; 2nd: Nikki; carried).
VACATION POLICY. Faye will visit with Society leadership about adding another vacation step.
RESIDENCE. Legal council is negative about trying to obtain a residence requirement, and Jim recommended it not be pursued. The board’s issue is requiring residence for licensure, not for writing the CPA exam. Jim mentioned that the interpretations file is up to date. He will visit with NASBA about foreign applicant licensing and ability to protect the public.
EXPERIENCE VERIFICATION. Beginning April 1, 2016, experience is to be verified by a CPA (or an accountant holding one of the IQAB-recognized credentials). Verification could be from a CPA who investigates and certifies the work. Changes were suggested in the experience form: bold type to emphasize the required work areas, adding a perjury reference, and including the credentials that qualify as verifiers.
RETIRED STATUS. “No longer employed” is not considered to limit volunteer work, only paid work. The term “may not practice” will be construed as not providing work involving A & A skill, etc., as the law’s definition of practice indicates.
CGMA. A disclaimer will be expected of non-CPAs who use the CGMA title in a public venue.
FINES. Jim reported on his inquiry of legal counsel. The Board has fining authority up to $1000; legal counsel suggested that fines be in the $250 - $500 area. There is interest in increasing the current authority.
REINSTATEMENTS / SPECIAL SITUATIONS
Reinstatement was approved for six people. Exam credit (REG) was extended 1 year, for a candidate, due to a health matter. Four classes with a non-accounting rubric were approved. An applicant was denied writing approval. Counsel is to prepare a letter for the president to sign. A licensee with legal issues is to be contacted and given opportunity to explain the situation. Another licensee will be fined $1000, and revoked (until CPE is complete and home certificate reinstated. Legal counsel is to send the correspondence. The Board was informed about a previous applicant who continues to write, and has requested board email addresses and the Governor’s name. A “closure” message has been sent, indicating the required steps and that there will not be further response until those steps are taken.
CPE AUDIT. Questions were addressed. A late fee is applied when the form is filed late; no added fee applies if one is short on CPE. Perhaps when a person is lacking CPE, all their listings should be verified. There was discussion about AICPA having raised the CPE requirement for non-public CPAs, from 60 to 120 hours, and their members may be paying their dues (which include tacit verification they’ve met the CPE rule) without having done so. If we know that’s the case, it could be an ethics issue. Jim made the case that many may not be aware of that higher CPE expectation. No action was initiated.
CPA EXAM EXPOSURE DRAFT. Discussion.
PEER REVIEW. Letters will be sent to firms receiving a fail rating, notifying that we are aware of the status and will monitor the next review status. Peter provided information on the “pass” and “pass with deficiencies” ratings.
NEXT MEETING: Feb. 12, 2016 @ 9 am; 2 locations: Eide Bailly-Bismarck, Brady Martz-Grand Forks.
E.D. GOALS. Faye circulated possible goals that Jim had drafted.
COMPLAINTS. Briefing on 2014-4.
N.D. State Board of Accountancy
Meeting highlights: 7-22-15 12 pm
OFFICERS. Faye Miller continues as president, Pete Hoistad as Secretary.
FOREIGN EVALUATION. A special request, to accept an evaluation from a non-approved vendor, was granted.
AUDITOR SELECTION. Overmoe Nelson was approved as the Board auditor.
UNUSED EXAM FEES. Unused fees will be requested from NASBA, as soon as possible; it will be policy to not refund any examination fees.
FOREIGN EVALUATIONS. 5 requests, to allow a foreign education evaluation from a non-approved vendor, were denied. A request to accept additional business credits was denied, as was an Exam waiver request.
NDCPAS PEER REVIEW. Mary Jo Richard reported on the Society’s peer review administration. There was one ND firm that didn’t report all of their work areas; they underwent a new review.
A list of non-pass firms will be prepared for the next meeting; for those with failed reviews, more immediate information will be obtained. There was sentiment that there should be a stronger impact when a firm fails peer review. Perhaps verification should be obtained to ensure a firm has actually discontinued those areas of work it had committed to.
EDUCATION CHANGES. Various changes were made in how concentration credits are evaluated.
We will obtain guidance on whether an SSN / resident alien card / ITIN requirement could be enacted. We will also seek information on the experiences of other states making such changes.
INTERNATIONAL MOBILITY. No further action will be taken.
We will ask that a diversity letter not be sent by NASBA, to the Governor, as it is not considered necessary.
EXPERIENCE. The group discussed the requirements of law and rule. This subject will be filed as a potential future rule change area. There was sentiment that the full 2000 hours involve actual accounting & similar work, rather than the “majority”.
PUBLIC MEMBERS. Nikki raised the question of having public representation on the Board. There was some disagreement about whether this is a good idea.
No action will be taken with case 2014-4 at this point.
Case 2015-3 will be closed, with no action against the firm.
Another matter was addressed, and the party has applied for a firm permit, and reciprocal certificate.
N. D. State Board of Accountancy
Meeting Notes: 5-22-15 10 am (conference call)
Participants: Faye Miller, Peter Hoistad, Nikki Schmaltz, Rick Lee, Jim Abbott
Jim shared his approach to determining proposed compensation for the staff, and also provided information about the benefits program. He left the meeting at about 10:20. The board meeting continued, and the group made two changes to the proposals, and discussion the E.D. compensation
Meeting Notes: 4-24-15
The meeting began at 11:58 am. Participants: Faye Miller, Pete Hoistad, Nikki Schmaltz, Mandy Harlow, Jim Abbott, by phone: Rick Lee, Mike Schmitz.
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 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.
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.
N. D. STATE BOARD of ACCOUNTANCY
Meeting Notes: Jan. 23, 2015
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