ALJDEC decisions subject to certification as final

11F-2011.017-ACY · State Board of Accountancy · 2011-03-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 9, 2011, at 8:00 a.m. APPEARANCES: The Arizona State Board of Accountancy appeared through Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Stephanie J. Miller did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“the Board”) issued Certified Public Accountant Certificate No. 7560-E to Stephanie J. Miller (“Respondent”). This certificate enables Respondent to practice as a certified public accountant (“CPA” or “registrant”) in the State of Arizona. 2. A.R.S. § 32-730(D) requires all registrants to register biennially with the Board and to submit satisfactory proof that they have completed the continuing professional education (“CPE”) that the Board requires. 3. The Board has promulgated A.A.C. R4-1-453(F) to require registrants to maintain documentation of their CPE, including course outlines, proof of attendance or participation, and written proof of completion, for three years and to provide copies to the Board upon request. 4. On or about December 29, 2008, Respondent submitted her biennial registration renewal application (“the 2008 registration renewal”) to the Board. On the 2008 registration renewal, Respondent indicated that she had completed 70 hours of CPE. Respondent signed the application, certifying that the CPE information that she reported was true, that she understood that the CPE was subject to the Board’s approval, and that she would retain all documentation of the CPE for three years following the registration. 5. Every month, the Board randomly selects fifteen CPA registrants for a CPE audit. In April or May 2010, the Board selected Respondent. 6. On May 12, 2010, the Board sent a letter via certified mail to Respondent at her address of record with the Board, notifying her that she had been randomly selected for a CPE audit, and requesting that she submit to the Board, within thirty days, the documentation for the CPE that she claimed on her 2008 registration renewal. The Board’s May 12, 2010 letter requested that Respondent respond in writing to the letter within thirty days pursuant to A.A.C. R4-1- 455.03(F). 7. On or about May 17, 2010, Respondent signed the certified mail receipt to indicate that she had received the Board’s May 12, 2010 certified letter. 8. Respondent failed to respond to the Board’s May 12, 2010 letter or to provide documentation of the CPE that she claimed on her 2008 registration renewal. 9. On or about June 8, 2010, during a conversation with the Board’s deputy director, Jim Dubé, Respondent indicated that she would rather have her license revoked than submit to a CPE audit. 10. At the Board’s September 13, 2010 meeting, it voted to offer Respondent a Decision and Order (by Consent) for Relinquishment of her CPA certificate, and to file a Complaint and Notice of Hearing for revocation if Respondent failed to respond to the offer within thirty days. 11. On September 16, 2010, the Board sent a letter by certified mail to Respondent at her address of record, notifying her of the Board’s offer to resolve the matter by a Decision and Order (by Consent). The Board’s September 16, 2010 letter requested that Respondent respond in writing to the letter within thirty days pursuant to A.A.C. R4-1-455.03(F). 12. On or about October 21, 2010, the United States Postal Service (“USPS”) returned the Board’s September 16, 2010 letter, stamped “Unclaimed” and with a notice of Respondent’s new address on E. Bethany Home Road in Phoenix, Arizona. Respondent had not reported any change of address to the Board. 13. On October 27, 2010, the Board resent via certified mail to Respondent at the E. Bethany Home Road address its offer to resolve the matter by a Decision and Order (by Consent). The Board’s October 27, 2010 letter again requested that Respondent respond in writing to the Board’s offer within thirty days pursuant to A.A.C. R4-1-455.03(F). 14. On November 23, 2010, the Board’s October 27, 2010 letter was returned as unclaimed. Respondent did not respond in writing to Board’s September 16, 2010 or October 27, 2010 letters. 15. At the Board’s December 6, 2010 meeting, it voted to direct its attorney to file a Complaint and Notice of Hearing for revocation of Respondent’s CPA certificate for her failures to respond to the Board’s communications. 16. The Board referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On December 9, 2010, the Board issued a Complaint and Notice of Public Hearing, setting a hearing on February 9, 2011, at 8:00 a.m. 17. The Board mailed a copy of the Complaint and Notice of Public Hearing to Respondent at the address on E. Bethany Home Road. 18. A hearing was held in the OAH on February 9, 2011. The Board presented Mr. Dubé’s testimony and submitted six exhibits to establish the facts set forth above. 19. Although the beginning of the hearing was delayed fifteen minutes to allow Respondent additional travel time, she did not appear, personally or through an attorney, did not request to appear telephonically, and did not contact the OAH to request a continuance or that the start of the hearing be further delayed. Respondent did not present any evidence to defend her CPA certificate. CONCLUSIONS OF LAW The Board has been created and authorized to regulate and control the profession of Certified Public Accountancy in Arizona.[1] This matter lies within its jurisdiction. The Complaint and Notice of Public Hearing that the Board mailed to Respondent at the address that the USPS provided was reasonable and she is deemed to have received notice of the hearing.[2] The Board bears the burden of proof and must establish Respondent’s statutory and regulatory violations by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] Respondent was required to submit to the Board as part of her 2008 registration renewal “satisfactory proof, in a manner prescribed by the [B]oard, that [she] has completed the [CPE] requirements established by the [B]oard.”[5] Although the Board may grant an exemption from this requirement, Respondent never claimed, and the record does not establish, that she had any right to an exemption. Pursuant to its statutory authority, the Board has promulgated an administrative rule that sets forth CPE requirements.[6] The Board’s rules also provide that registrants are deemed to have knowledge of the rules.[7]

Respondent’s failures to maintain documentation of the CPE that she reported on her 2008 registration renewal and to provide the documentation to the Board after request violate A.R.S. §§ 32-730(D),[8] 32-741(A)(3), 32- 741(A)(6), 32-741(A)(14), and 32-741(A)(15).[9] Respondent’s failures to maintain documentation of the CPE that she reported on her 2008 registration renewal and to provide it to the Board upon request violate A.R.S. § 32-741(A)(9),[10] specifically, her failure to comply with the professional standards set forth at A.A.C. R4-1- 453(F).[11] Respondent’s failures to respond to the Board’s May 12, 2010, September 16, 2010, or October 27, 2010 letters constitute multiple violations of A.R.S. §§ 32-741(A)(15) and 32-741(A)(9), specifically A.A.C. R4-1-455.03(F).[12] Respondent’s failure to timely notify the Board of her address change constitutes a violation of A.R.S. § 32-741(A)(9), specifically, A.A.C. R4-1- 346(A).[13] Respondent’s failures to maintain documentation of the CPE that she claimed on her 2008 registration renewal, to respond to the Board’s written communications, or to notify the Board of her address change constitute discreditable acts, as defined by A.A.C. R4-1-455.03(A)(1) and (3).[14] Respondent’s violations of the applicable statutes and regulations that are set forth above provide grounds for the Board to take disciplinary action against her CPA certificate under A.R.S. §§ 32-741(A) and 32- 741(D).[15] Respondent’s repeated failures to respond to the Board’s written communications or to offer any evidence at the hearing to defend her CPA certificate establish that at this time, she cannot be regulated. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Board revoke Respondent Stephanie J. Miller’s Certified Public Accountant Certificate No. 7560-E. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, March 1, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See A.R.S. § 32-701 et seq. [2] See A.R.S. § 41-1092.04; A.R.S. § 41-1061(A). [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] A.R.S. § 32-730(D). [6] See generally A.A.C. R4-1-453. [7] A.A.C. R4-1-102(A). [8] A.R.S. § 32-730(D) provides that “[a]t the time of registration, every certified public accountant and public accountant shall as a prerequisite to biennial registration submit to the board satisfactory proof, in a manner prescribed by the board, that the registrant has completed the continuing education requirements established by the board.” [9] A.R.S. § 32-741(A) provides that after notice and an opportunity for hearing, the board may revoke any certificate previously issued for any of the following causes:

3. Fraud or deceit in obtaining a certificate as a certified public accountant or in obtaining a certificate as a public accountant under this chapter. . . . .

6. Violation of any of the provisions of this chapter . . . .

. . . .

14. Knowingly making a false or misleading statement:

a) To the board or its designated agent.

b) On a form required by the board. . . . .

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.

[10] A.R.S. § 32-741(A)(9) sets forth as grounds for the Board to revoke a previously issued CPA certificate, “[k]nowing violation of any . . . rule . . . adopted by the board.” [11] A.A.C. R4-1-453(F) is entitled “CPE Record Retention” and requires that “[a] registrant shall maintain for three years and provide the Board upon request the following documents: course outlines, proof of attendance or participation, and written proof of completion.” [12] A.A.C. R4-1-455.03(F) provides 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.” [13] A.A.C. R4-1-346 provides that “[w]ithin 30 days of any business, mailing, or residential change of address, a registrant shall notify the Board of the new address in a letter signed by the registrant.” [14] A.A.C. R4-1-455.03(A) defines a “discreditable act” as follows:

Certified public accountants, public accountants, or firms shall not commit any act that reflects adversely on their fitness to engage in the practice of public accounting, including:

(1) Violation of any of the provisions of R4-1-455 through R4- 1-455.04; . . . .

2) Violation of any of the provisions of A.R.S. Title 32, Chapter 6, Article 3, or any rule promulgated under these statutes.

[15] A.R.S. § 32-741(D) provides that “[t]he board shall, after notice and a hearing, suspend the certificate of any certified public accountant or public accountant who fails to show proof, in accordance with section 32- 730, subsection D, of compliance with the continuing professional education requirements established by the board.”

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