ALJDEC decisions subject to certification as final

09F-2009.088-ACY · State Board of Accountancy · 2010-07-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 28, 2010 APPEARANCES: The Arizona State Board of Accountancy was represented by Assistant Attorney General Seth T. Hargraves. Darlene M. Watkin did not appear. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“Board”) is the authority for regulating the profession of certified public accountants in the State of Arizona. 2. Darlene M. Watkin, CPA (“Respondent”) is the holder of Certified Public Accountant Certificate No. 6551-E issued by the Board. The certificate enables Respondent to practice as a certified public accountant in the State of Arizona. 3. On April 1, 2010, the Board issued a Complaint and Notice of Public Hearing in File No. 2009.088 alleging acts of unprofessional conduct by Respondent as a certified public accountant. The Complaint and Notice of Public Hearing was sent to Respondent at her address of record with the Board. 4. The Board forwarded File No. 2009.088 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 5. The commencement of the formal hearing was delayed 15 minutes to allow for the late arrival of Respondent or an attorney authorized to represent her. After the delay, the Administrative Law Judge conducted the hearing in Respondent’s absence. 6. A.R.S. § 32-730(D) requires that all registrants biennially register with the Board and submit satisfactory proof that they have completed the continuing professional education (“CPE”) requirements promulgated by the Board. 7. A.A.C. R4-1-453(D) (1) requires that a registrant complete 80 hours of CPE during the two-year period immediately preceding the registrant’s registration renewal. 8. On or about September 30, 2008, Respondent submitted her biennial registration application to the Board, which included a request for medical waiver of CPE requirements. On the registration application, Respondent failed to document that she completed the CPE requirements set forth in A.A.C. R4-1-453(D). 9. On or about October 27, 2008, the Board sent Respondent a letter detailing CPE waiver requirements and requesting that Respondent complete and submit an enclosed disability affidavit along with a current Doctor’s Statement regarding her disability status. 10. On or about March 6, 2009, the Board sent Respondent another letter requesting the necessary documentation required to complete Respondent’s request for CPE waiver. Respondent was directed to provide the requested documentation within 30 days. 11. Respondent failed to timely respond to the Board’s March 6, 2009 request for documentation. 12. On or about April 23, 2009, Respondent submitted the requested disability affidavit but failed to enclose the required Doctor’s Statement. 13. Board staff received a facsimile letter dated April 30, 2009 from Respondent which included a Doctor’s Statement from Respondent’s physician. However, the response was received after the 30-day period required by the Board’s March 6, 2009 letter. 14. On or about May 15, 2009, the Board sent Respondent by certified mail an offer of Decision and Order (By Consent) for Respondent’s review. Respondent was directed to respond within 30 days. 15. Respondent failed to timely respond to the Board’s May 15, 2009 certified letter. 16. On July 13, 2009, the Board voted to have the above matter proceed to hearing for Respondent’s failure to respond. 17. On July 31, 2009, Respondent executed the Consent to Board Decision and Order (“Consent”). 18. In her Consent, Respondent acknowledged the following provision: I understand that a failure to comply with any of the provisions of this Consent Order will be considered noncompliance and will constitute grounds for further disciplinary action. I understand that the Consent Order may be considered in any future disciplinary action against me.

19. On September 18, 2009, the Board issued a Decision and Order (By Consent) (“Consent Order”) in ASBA File No. 2009.088. The Board concluded, and Respondent consented to the conclusions, that Respondent violated the following statutory and regulatory violations: A.R.S. §§ 32-741(A) (15), 32-741(A) (9), specifically A.A.C. R4-1- 453(D), and A.A.C. R4-1-455.03(A) (3). 20. Paragraph IV. Order, General Provisions, paragraph 2 of the Consent Order required Respondent to comply with the following requirements: Respondent shall maintain records which reflect compliance with the terms of this Consent Order, shall cooperate fully with the Board’s administrative staff, investigative reviewers and attorneys in providing relevant documentation of Respondent’s compliance with the terms and conditions of this Consent Order, including executing any and all release of information forms as may be required by the Board or its designee, and in responding promptly to any request from the Board for documents that the Board requires to demonstrate Respondent’s compliance with this Consent Order. 21. The Consent Order imposed an administrative penalty in the amount of $500.00 against Respondent and imposed additional general provisions against her, the terms of which are incorporated herein by reference. 22. Respondent received the approved Consent Order in ASBA File No. 2009.088, as evidenced by a signed but undated Domestic Return Receipt for the mailing. 23. By letter dated October 21, 2009, the Board’s Compliance Manager, Ryan Edmonson, advised Respondent that her CPA certificate was suspended pending her payment of the imposed $500.00 administrative penalty, pursuant to the Consent Order in ASBA File No. 2009.088. 24. On or about January 29, 2010, Board staff sent Respondent by certified mail a Memorandum and Affidavit regarding her compliance with the Consent Order. Board staff requested that Respondent complete and return the Affidavit within 30 days. 25. Respondent received the January 29, 2010 certified mailing from Board staff, as evidenced by the Domestic Return Receipt for the mailing. 26. Respondent failed to timely respond to the Board staff’s January 29, 2010 request. 27. By letter dated March 1, 2010, Board staff informed Respondent that the Board would consider her failure to respond to the Board’s request for the compliance Affidavit at the Board’s next meeting on March 22, 2010. The Board would determine “whether the failure to respond constitutes noncompliance with [Respondent’s] Decision & Order (By Consent); and whether further disciplinary action is warranted.” 28. At its March 22, 2010 meeting, the Board voted “to file a Complaint and a Notice of Public Hearing for revocation of [Respondent’s] CPA certification for failure to respond to the Board.” CONCLUSIONS OF LAW 1. Pursuant to A.R.S. § 32-701 et seq. and A.A.C. R4-1-101 et seq., the Board has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.R.S. § 41-1092.07(G) (2) and A.A.C. R2-19-119(B), the Board has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. Pursuant to A.A.C. R4-1-102(A), Respondent is deemed to have knowledge of the Board’s rules. 4. Respondent violated the provisions of paragraph IV Order, General Provisions, paragraph 2 of the Consent Order by failing to timely respond to the Board’s request for Respondent’s submission of the Affidavit to determine Respondent’s compliance with the terms of the Consent Order. 5. Respondent’s failure to respond to the Board, as described in the above-provided Findings of Fact, constitutes a violation by Respondent of A.R.S. § 32-741(A) (15) (“Failing to respond or furnish information in a timely manner to the board or its designated agent, if the information is legally requested by the board and is in the registrant’s possession or control”). The factual basis for this conclusion is Respondent’s failure to complete and return the Affidavit regarding the status of her compliance with the Decision and Order (By Consent) in ASBA File No. 2009.088. The evidence of record established a pattern of Respondent’s failure to comply with requests from the Board for information, which the Administrative Law Judge concludes is a strong matter in aggravation. Such conduct by Respondent reflects negatively on her ability and/or willingness to comply with the applicable statutes and regulations governing the regulation of certified public accountants in Arizona. 6. Respondent’s failure to respond to the Board by failing to complete and submit the Affidavit regarding her compliance with the Board’s Decision and Order (By Consent) in ASBA File No. 2009.088 constitutes a failure by Respondent to comply with the professional standards set forth in A.A.C. R4-1-455.03(A) (3). 7. The conduct and circumstances described in Conclusions of Law Nos. 4 and 5, as supported by the above-provided Findings of Fact, constitutes grounds for the imposition of additional disciplinary action against Respondent’s Certificate No. 6551-E, pursuant to A.R.S. § 32-741(A) and (D), as defined in A.R.S. § 32-701(6). 8. The Administrative Law Judge concludes that the Board’s allegation of unprofessional conduct by Respondent due to “Respondent’s failure to complete the CPE requirements for registration renewal, as described in the Factual Allegations [of the Complaint and Notice of Public Hearing], constitutes a violation of A.R.S. § 32-741(A) (9)” was addressed within the scope of the Board’s Decision and Order (By Consent) in ASBA File No. 2009.088, and does not constitute a new allegation of violation in the instant Complaint and Notice of Public Hearing. RECOMMENDED ORDER Respondent’s Certified Public Accountant Certificate No. 6551-E shall be revoked on the effective date of the Order entered in this matter.

Done this day, July 7, 2010.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy -----------------------

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