ALJDEC decisions subject to certification as final
20A-2021.031-ACY · State Board of Accountancy · 2020-11-16
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
In the Matter of:
Donald M. Edwards
Registration No. 1675-E,
Appellant.
No. 20A-2021.031-ACY
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 24, 2020 and October 26, 2020
APPEARANCES: Bernie Banahan, Esq. appeared on behalf of Appellant Donald M. Edwards. Assistant Attorney General Scott M. Donald appeared on behalf of the Arizona State Board of Accountancy (Board).
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
FINDINGS OF FACT
On or about January 6, 2020, the Board received Respondent’s biennial registration renewal form.
Respondent reported that he was older than fifty-five years and that he had been a CPA for at least 20 years. Respondent requested a Retired Status.
Respondent notified the Board through the renewal form that he worked as a trustee.
On January 21, 2020, Laura Minnick, a Program Specialist for the Board, requested a job description and outline of Respondent’s employment activities.
On January 21, 2020, Respondent responded, as follows:
I am serving as the trustee of a number of trusts, also serve as a manager of several LLC’s for former clients and as a corporate officer and/or board member of several former corporate clients.
Errors in original.
On January 22, 2020, Ms. Minnick requested more information from Respondent regarding his duties as a trustee.
On January 22, 2020, Respondent notified the board that his trust duties included investing and distributing trust assets, preparing tax returns, statements, and records as needed. See Exhibit 1, Bats 009 – 010. Respondent also explained that he communicated with trust beneficiaries. See id.
In February of 2020, the Board denied Respondent’s request for Retired Status. The Board concluded that Respondent summarized financial transactions in his primary employment.
On or about February 24, 2020, the Board received Respondent’s request for an appeal. In his appeal request, Respondent stated that he had no intention of practicing public accounting. Respondent stated that he would not be performing attest/compilation services, and that he would not be holding himself out as a CPA. Respondent further wrote that those services would be performed by his former firm.
The matter was referred to the Office of Administrative Hearings (OAH) and the matter was set for hearing.
In March of 2020, Respondent submitted a request for reconsideration of the denial of his request for Retired Status.
The Board’s representative moved to vacate the hearing and the matter was remanded to the Board.
The information provided by Respondent to the Board in connection with his request for Retired Status is limited to the correspondence provided in Exhibit 1.
On June 8, 2020, the Board held an open session and considered Respondents’ request for reconsideration. The Board denied Respondent’s request.
On or about August 4, 2020, Respondent filed a Motion for Rehearing.
The matter was referred to the OAH for an evidentiary hearing.
On August 12, 2020, the Board issued a Complaint and Notice of Hearing
(Notice) setting the matter for hearing on September 24, 2020 at the OAH in Phoenix Arizona.
The Notice provide that that issue for hearing was, “...whether good cause
exists to modify or vacate the decision appealed for the bases identified in your Motion for Rehearing filed with the Board on August 4, 2020.”
A hearing was held on September 24, 2020 and October 26, 2020.
The Board presented the testimony of Andrea Byrd, the Assistant Director of Registration and Operation at the Board and Lisa B. Lumbard, a Board Member. The Board submitted exhibits 1 through 3.
Respondent testified on his own behalf and presented the testimony of Lisa Osselaer.
Lisa B. Lumbard has been a registered CPA since 1993. Ms. Lumbard owned her own accounting firm for 25 years. Ms. Lumbard explained that the Board did not approve Respondent’s request for Retired Status because Respondent notified the Board that he was performing accounting, consulting and managerial advisory services through his role as a trustee.
Respondent testified on his own behalf. Respondent testified that he does not perform accounting services. Respondent testified that he last performed accounting services on December 31, 2019. Respondent stated that he signed a retirement agreement with his firm, Edwards Largay Mihaylo (ELM). Respondent stated that he is prohibited from performing any accounting or consulting services through the retirement agreement. Respondent stated that when the Board asked him for information about his role as a trustee, he copied a job description from a website. Respondent stated that he hires a firm to perform that work that he included in his job description. Respondent stated that he does not directly invest trust assets. Respondent stated that he reviews trust statements every month. Respondent’s stated that his old firm performs the tax work. Respondent stated that he fills out forms from time to time when requested.
Respondent presented the testimony of Lisa Osselaer. Ms. Osselaer has been a CPA since 1988. Ms. Osslear is a Principal at ELM. Ms. Osslear stated that Respondent’s retirement agreement with the firm prevents Respondent from performing tax or consulting services. Ms. Osselaer states that ELM performs the tax work.
CONCLUSIONS OF LAW
1. The Board bears the burden of persuasion. Ariz. Rev. Stat. § 41-1092.07(G)(2) and (G)(3).
2. The standard of proof on all issues in this matter is that of the preponderance of the evidence. Ariz. Admin. Code § R2-19-119.
3. A preponderance of the evidence is:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
Black’s Law Dictionary 1373 (10th ed. 2014).
4. The evidence presented at hearing shows that Respondent performed accounting, management advisory services, and consulting services as defined under Ariz. Rev. Stat. § 32-701.
5. Respondent has failed to establish by a preponderance of the evidence that the Board’s decision to deny his request for Retired Status was improper.
RECOMMENDED ORDER
IT IS ORDERED that the Board’s decision to deny the request of Donald M. Edwards for Retired Status is affirmed.
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 after the date of that certification.
Done this day, November 16, 2020.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted electronically to:
Monica L. Petersen, Executive Director
Arizona State Board of Accountancy