ALJDEC

02A-02401-ACY · State Board of Accountancy · 2001-11-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 27, 2001 at 9:00 a.m. APPEARANCES: Randy J. Tudor appeared on his own behalf; the Arizona State Board of Accountancy appeared through Patti J. Shelton, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence on the issue of whether Mr. Tudor violated applicable statutes or regulations requiring him to take and to submit satisfactory proof of having taken continuing professional education and, if so, the appropriate penalty. Based on this evidence, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order to the Arizona Board of Accountancy. FINDINGS OF FACT On June 2, 1986, the Arizona Board of Accountancy (“the Board”) issued to Mr. Tudor Certified Public Accountant Certificate No. 5149-E. On January 18, 2000, Mr. Tudor submitted a biennial registration form. On the form, Mr. Tudor certified, under penalty of perjury, that he had obtained credit for having completed 75 hours of continuing professional education (“CPE”) in group and formal correspondence programs, including 68 hours in programs sponsored by Continuing Academics for Accountants, and ten hours of CPE for having served as a lecturer or discussion leader of CPE programs. On August 1, 2001, the Board sent via certified mail the following letter to Mr. Tudor: Your certificate number 5149-E was seleted by a random sample of certificate numbers, therefore, you must submit your CPE files for audit. Please provide copies of the following documentation for at least 80 hours of CPE shown on the enclosed copy of your registration form . . . :

1. A subject outline or agenda issued by the sponsor which identifies the topics covered in the course. . . .

2. A schedule, certificate or brochure that clearly shows the time spent in the course.

3. Evidence of completion of the course, such as, a certificate or letter of verification from the sponsor. A canceled check, registration form, or sign-in sheet is not sufficient.

A certificate of attendance or completion should include your name, title of the seminar, name of sponsor, date of completion, number of recommended credit hours, and the signature of an authorized representative of the sponsor. . . . .

We appreciate your cooperation in this matter. Please return the requested information to the CPE Committee at the above address by September 11, 2001. . . .

Mr. Tudor started compiling the information requested. He could not locate the requested information for the 68 credit hours obtained in courses offered by Continuing Academics for Accountants. The only things he could find were evidence of payment, well in advance of the course dates, and textbooks. The answers to the final tests are marked in the books. Mr. Tudor could not find one large textbook, for the course “Using the Internet,” which he believes he gave to Goodwill after he completed the course. Mr. Tudor credibly testified that he loves to study and take tests and that he took the tests for these 68 credit hours, but did not copy them before mailing them to Continuing Academics for Accountants. Mr. Tudor called personnel at Continuing Academics for Accountants, who told him that its records did not include examinations showing that he had satisfactorily completed the courses. For a class involving retirement, which Mr. Tudor had submitted on the previous biennial registration, personnel at Continuing Education for Accountants told him they had no record of his having taken the course, but that they did have a copy of his corrected examination for that course. When Mr. Tudor realized he might have a problem, he started taking substantial CPE classes and, at the time of the hearing, had completed 64 additional hours. Mr. Tudor believes he will have 160 hours of CPE for the next biennial registration period. Mr. Tudor did not, however, respond to the Board’s request for information because he had heard bad things about its conduct of investigations. His stomach has been tied up in knots since he could not find the documents requested in the Board’s August 1, 2001 letter. Mr. Tudor was hoping for an opportunity to explain things to the Board in person and was surprised that the hearing scheduled in this matter was before an Administrative Law Judge, not the Board. After the Board did not receive the requested materials from Mr. Tudor, on October 18, 2001, it issued via certified mail to Mr. Tudor a Complaint and Notice of Public Hearing. In the cover letter for the Complaint, the Board informed Mr. Tudor that it would consider vacating the hearing if he did the following: 9. Present satisfactory documentation for the total required number of hours of CPE, such as copies of certificates of attendance or certificates of completion;

10. Submit a copy of the subject outline or agenda issued by the sponsor or table of contents of a manual which identifies the topics covered for each continuing professional education course listed, including ASCPA courses; and

11. Agree to pay $150 to the Board for reimbursement of costs incurred.

[Emphasis added.] Mr. Tudor did not present any of the requested documentation to the Board prior to hearing. A hearing was held on November 27, 2001, at which the parties testified consistently with the above Findings of Fact. Mr. Tudor had with him the documents described in Finding of Fact No. 4. He agreed to provide these documents to the CPE Committee by December 5, 2001. Monica Bredeneier, Administrative Assistant III, testified on behalf of the Board that Mr. Tudor had neither applied for an exemption for the CPE requirement nor made a request to be placed on inactive status. CONCLUSIONS OF LAW The Board bears the burden of proof and must establish Mr. Tudor’s statutory and regulatory violations by a preponderance of the evidence.[1] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[2] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[3] The Board has been created and authorized to regulate and control the profession of Certified Public Accountancy in Arizona.[4] Mr. Tudor was required to submit to the Board as part of his biennial registration “satisfactory proof, in a manner prescribed by the [B]oard, that [he] has completed the continuing education requirements established by the [B]oard.”[5] Specifically, Mr. Tudor was required to submit proof of having taken 80 hours of CPE in his 2000 biennial registration.[6] The Board has required that applicants for renewal, such as Mr. Tudor, state, “under penalty of perjury, . . . the CPE programs for which they apply for credit,” including the sponsoring organization, location of the program, title of the program or description of content, and dates attended.[7] It appears that Mr. Tudor complied with this regulation. But the Board also requires that applicants “maintain for 3 years and provide to the Board upon request the following documents: course outline, proof of attendance or participation, and written proof of completion.”[8] It does not appear that Mr. Tudor complied with this regulation. The administrative regulations that the Board has promulgated pursuant to its statutory authority require that, “[w]hen requested, certified public accountants or public accountants shall respond to communications from the Board within 30 days of the mailing of such communications by registered or certified mail.”[9] The regulations also prohibit a certified public accountant from committing any “discreditable acts,” which includes violation of any administrative regulation.[10] The Administrative Law Judge believes that Mr. Tudor completed the credit hours claimed on the 2000 biennial registration. However, Mr. Tudor admitted that he did not maintain for three years records to support completion of 68 hours for he claimed credit on his 2000 biennial registration and did not timely respond to the Board’s requests for documentation in the random audit. These are discreditable acts that prevented the Board from fulfilling its legislatively mandated function. Because Mr. Tudor did not respond to the Board’s inquiries, the CPE Committee was not able to make a recommendation and the Board was not able to make an initial determination of the sufficiency of Mr. Tudor’s documentation. As was discussed at the hearing, the legislature empowered the Board, not the Office of Administrative Hearings, to determine the sufficiency of a certificate holder’s proof of completion of CPE in the first instance. The evidence does not show that Mr. Tudor violated any Arizona statute or any fraud provision of the federal securities laws, committed fraud, deceit, or perjury, or committed any other misconduct that would give cause for disciplinary action.[11] No evidence shows that public needs to be protected from Mr. Tudor. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Board accept the documents that Mr. Tudor submits to the CPE Committee and determine, based on its own experience and the Committee’s recommendation, whether Mr. Tudor needs additional CPE hours for the 2000 biennial registration. If Mr. Tudor disagrees with the Board’s determination, he may file an appeal and request a hearing. It is further recommended that the Board assess an administrative penalty against Mr. Tudor in the amount of $250.00 for his failure to provide requested documentation in a timely manner. If Mr. Tudor pays this amount within two weeks of the date he receives notice of the Board’s final order in this matter, the penalty will not be reported to the public or maintained on Mr. Tudor’s record as a disciplinary action. After the administrative penalty is paid, it is recommended that this complaint be dismissed. Done this day, November 29, 2001.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of November, 2001, to:

State Board of Accountancy Lee Prins, Executive Director ATTN: Wendy Johnson 3877 North 7th Street, Suite 106 Phoenix, AZ 85014

By ___________________________ ----------------------- [1] See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996).

[2] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[3] Black’s Law Dictionary at page 1064 (6th ed. 1990).

[4] See A.R.S. § 32-701 et seq.

[5] A.R.S. § 32-730(D).

[6] See A.A.C. R4-1-401(D)(1). [7] A.A.C. R4-1-453(E).

[8] A.A.C. R4-1-453(F).

[9] A.A.C. R4-1-455.03(F).

[10] See A.A.C. R4-1-455.03(A)(3).

[11] See A.R.S. § 32-741(6).

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826