the texas state board of accountancy is holding its …...2020/05/14 · the texas state board of...

The Texas State Board of Accountancy is holding its meeting by online video conference pursuant to the executive order issued by Governor Gregg Abbott on March 16, 2020, suspending certain provisions of the Texas Open Meetings Act and permitting fully-virtual governing body meetings if they meet certain requirements identified by the Office of the Governor and the Office of the Attorney General. The public may join the meeting with the following meeting link: Topic: Board Meeting Time: May 14, 2020 10:00 AM Central Time (US and Canada) Join from PC, Mac, Linux, iOS or Android: https://atttrials.zoom.us/j/96017634716

Or Telephone: Dial: USA 312 777 1449 USA 8883316293 (US Toll Free) Conference code: 489234 Find local AT&T Numbers: https://www.teleconference.att.com/servlet/glbAccess?process=1&accessNumber=8883316293&accessCode=489234 Or an H.323/SIP room system: H.323: 162.255.37.11 (US West) 162.255.36.11 (US East) 115.114.131.7 (India Mumbai) 115.114.115.7 (India Hyderabad) 213.19.144.110 (EMEA) 103.122.166.55 (Australia) 209.9.211.110 (Hong Kong China) 64.211.144.160 (Brazil) 69.174.57.160 (Canada) 207.226.132.110 (Japan) Meeting ID: 960 1763 4716 SIP: [email protected] Or Skype for Business (Lync): https://atttrials.zoom.us/skype/96017634716

May 13, 2020 May 14, 2020

GRANT1

FRIEL1

MORRIS1

LAFREY1

KOCH1

TIME

SEEFELD1

WILKERSON1

SHARP1

COMMITTEE Executive

2:00 PM

TREACY/HERMANSONLIAISON

VIRTUALPLACE

TREACY

VIRTUAL

1 Board Member2 Advisory Member

JOHNSON1

YANNUZZI1

INGRAM1

PEÑA1

Board

(chair)

10:00 AM

SMITH1

Texas State Board of Public Accountancy

Meeting Schedule

AIMONE1

(chair)CAVAZOS1


~ndrU Mae'firr~ ~,~err~d May 14,2020

I. Call to order and roll call- 10:00 a.m., May 14, 2020 ........................................................ 1-1

II. Approval of the March 12, 2020 Board meeting minutes ................................................. 11-1

Ill. Public comment ................................................................................................................... lll-1

IV. Consideration of report and recommendations of the Executive Committee ............. IV-1

A. Review and possible action on the Board's financial statements .................................. IV-3

B. Budget Plan for FY 2021 .............................................................................................. IV-19

C. Discussion, consideration, and possible action on compensatory per diem for Board members ............................................................................................................ IV-23

D. Update on office relocation ........................................................................................... IV-29

E. Review of NASBA/AICPA matters: .............................................................................. IV-31

1. NASBA dates of interest:

a. 38th Executive Directors Conference - March 16-18, 2020 - Canceled b. 25th Annual Conference for Board of Accountancy Legal Counsel

March 16-18, 2020- Canceled c. Western Regional Meeting -June 3-4, 2020 - Virtual d. 113th Annual Meeting- November 1-4,2020

F. Review of general correspondence .............................................................................. IV-35

G. Proposed Annual Evaluation of the Executive Director ......... ; ..................................... IV-41

V. Consideration of report and recommendations of the Rules Committee ..................... V-1

• Discussion, consideration and possible action on a proposed revision to Board Rule 511.57 (Qualified Accounting Courses) to eliminate the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA exam and to extend the emergency rulemaking for an additional 60 days which eliminated the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA Exam ................................ V-3

VI. Report on Licensing Department Programs .................................................................... Vl-1

A. Update on fingerprinting process ................................................................................... Vl-3

B. Report on the Unauthorized Practice of Public Accountancy ........................................ Vl-5 1

VII. Discussion, consideration, and possible action on the report of the Behavioral Enforcement Committee meetings .............................................................. Vll-1

April 23, 2019

Dismissals -Voluntary Compliance

1. Investigation No.18-12-05L .................................................................................... VII-1

2. Investigation Nos. 18-11-09L and 18-11-10L ......................................................... Vll-1

April 22, 2020

A. Dismissals- Insufficient Evidence:



3. Investigation Nos. 20-03-01 L and 20-03-02L ......................................................... Vll-3


5. Investigation Nos. 20-01-07L, 20-01-0SL and 20-01-09L ....................................... Vll-3

B. Dismissals -Voluntary Compliance:

1. Investigation No. 20-01-24L .................................................................................... Vll-4



C. Other- status report ..................................................................................................... Vll-4

D. Next meeting- August 5, 2020 at 9:15 a.m .................................................................. Vll-4

VIII. Discussion, consideration, and possible action on the report of the Peer Assistance Committee ............................................................................................ Vlll-1

IX. Report on the Enforcement Division's Probation Monitoring System ......................... IX-1

X. Discussion, consideration, and possible action on Agreed Consent Orders and Administrative Disciplinary Actions ............................................................. X-1

A. AGREED CONSENT ORDERS

Behavioral Enforcement Committee

1. Investigation No. 19-1 0-05L ...................................................................................... X-3 2. Investigation No.19-11-06L ...................................................................................... X-3

Technical Standards Review Committee

1. Investigation No.19-11-03L ...................................................................................... X-4 2. Investigation Nos. 19-09-20L and 19-09-21L ........................................................... X-4 3. Investigation No. 19-08-11L ...................................................................................... X-5

2

B. ADMINISTRATIVE DISCIPLINARY ACTIONS

1. Investigation Nos. 19-12-10001 -19-12-10055 .................................................... X-5 2. Investigation Nos. 20-01-10001- 20-01-10052 .................................................... X-5 3. Investigation Nos. 19-12-10056 -19-12-10227 .................................................... X-6 4. Investigation Nos. 20-01-10053- 20-01-10202 .................................................... X-6 5. Investigation Nos. 19-12-10228 - 19-12-10251 .................................................... X-6 6. Investigation Nos. 20-01-10203- 20-01-10234 .................................................... X-6

C. PROPOSAL FOR DECISION

Investigation Nos. 19-07-08L, 19-07-12L, 19-07-13L, 19-07-14L, 19-08-07L and 19-08-08L ......................................................................................... X-7

XI. Adoption of Board Rules ................................................................................................... Xl-1

1. Rule 501.51 Preamble and General Principles 2. Rule 501.52 Definitions 3. Rule 501.73 Integrity and Objectivity 4. Rule 501. 75 Confidential Client Communications 5. Rule 501. 76 Records and Work Papers 6. Rule 501.77 Acting through Others 7. Rule 501. 78 Withdrawal or Resignation B. Rule 501.80 Practice of Public Accountancy 9. Rule 501.81 Firm License Requirements 10. Rule 501.82 Advertising 11. Rule 501.83 Firm Names 12. Rule 501.85 Complaint Notice 13. Rule 501.90 Discreditable Acts

XII. Review of future meetings/hearing schedules .................. ~ ............................................ Xll-1

XIII. Adjournment. ..................................................................................................................... Xlll-1

3

Agenda Item I

Call to Order and Roll Call

May 14, 2020

I. DISCUSSION: The meeting will be called to order, en bane, by video conference, at 10:00 a.m., May 14, 2020 in the Board's office, at which time the roll will be called.

II. RECOMMENDATION: None required

Ill. SUGGESTED MOTION: None required

1-1

Agenda Item II

Approval of the March 12, 2020 Minutes

March 12, 2020

I. DISCUSSION: The enclosed minutes of the March 12, 2020 Board meeting were kept in accordance with established procedures and reflect the business conducted.

II. RECOMMENDATION: The staff recommends that the minutes of the March 12, 2020 Board meeting be approved as submitted/amended.

Ill. SUGGESTED MOTION: That the minutes of the March 12, 2020 Board meeting be approved as submitted/amended.

11-1


March 12, 2020

The Texas State Board of Public Accountancy met from 10:00 a.m. unti112:15 p.m. on March 12, 2020 at 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701-3900. A notice of this meeting containing all items on the agenda was filed with the Office of the Secretary of State at 11:09 a.m. on February 27, 2020. (TRD #2020-001291). (ATTACHMENT 1)

Board Members Present

Kelly V. Aimone, Esq. Manuel Cavazos IV, Esq., CPA

Presiding Officer Jamie D. Grant James D. Ingram IV, CPA Ross T. Johnson, CPA

Executive Committee Member-at-Large

Kevin J. Koch, CPA Timothy L. LaFrey, Esq., CPA

Secretary Roselyn E. Morris, Ph.D., CPA

Assistant Presiding Officer Debra D. Seefeld, CPA Debra S. Sharp Joyce A. Yannuzzi

Members Absent

Benjamin Peiia, CPA Treasurer Excused

Lisa A. Friel, CPA Executive Committee Member-at-Large Excused

Kimberly E. Wilkerson, Esq. Executive Committee Member-at-Large Excused

Others Present

J. Coalter Baker, CPA A. Carlos Barrera, CPA Robert Goldstein, CPA Thomas G. Prothro, CPA

Staff Present

Paulette Beiter, Esq. Roe! Cantu lsmael Castillo Ann Hallam, PMP Marissa Mahoney Alan Hermanson, CPA J. Randel Hill, Esq. Donna Hiller John Moore, Esq. Julie Prien Marisa Rios April Serrano William Treacy Daniel Weaver

I. Mr. Cavazos, Presiding Officer, called the meeting to order at 10:00 a.m. Mr. Treacy called roll and declared a quorum.

Dr. Morris moved to excuse the absences of Lisa A. Friel, Benjamin Peiia, and Kimberly Wilkerson. Mr. Johnson seconded the motion and it passed unanimously.

II. Mr. Ingram moved to approve the January 16, 2020 Board meeting minutes as presented. Ms. Sharp seconded the motion and it passed unanimously.

Ill. After a call for public comments, there were no comments from the public.

IV. Mr. Cavazos, Executive Committee Chair, reported on the March 11, 2020 committee meeting.

Members Present

Manuel Cavazos IV, Esq., CPA Lisa A. Friel, CPA Ross T. Johnson, CPA Timothy L. LaFrey, Esq., CPA Roselyn E. Morris, Ph.D., CPA

Members Absent

Benjamin Peiia, CPA Kimberly E. Wilkerson, Esq.

Others Present

Robert Goldstein, CPA

Staff Present

Ann Hallam, PMP Alan Hermanson, CPA J. Randel Hill, Esq. Donna Hiller William Treacy Daniel Weaver

A. Dr. Morris moved to approve the Board's financial statements as presented. Mr. Grant seconded the motion and it passed unanimously.

B. Mr. Hermanson, Director of Administrative Services and CFO, discussed the Board's Budget Plan for FY 2021.

C. Mr. Treacy discussed the status of the office relocation.

D. Dr. Morris moved to approve the Contracting Improvement Process as presented. Mr. Koch seconded the motion and it passed unanimously.

E. Dr. Morris moved to approve the FY 2020 professional service contract amendment as presented. Mr. Koch seconded the motion and it passed unanimously.

TSBPA Board Meeting Minutes March 12, 2020

FY 2020 contract amendment

Technical Standards Review Committee consultant:

• Harper Pearson, Co. 12/1/19-8/31/20 $37,500 (Increase by $37,500 from $50,000 to $87,500)

F. Mr. Cavazos reviewed correspondence from the public.

G. Mr. Treacy reported on NASBNAICPA matters:


a. 38th Executive Directors Conference- March 16-18, 2020 b. 25th Annual Conference for Board of Accountancy Legal Counsel- March 16-18, 2020 c. Western Regional Meeting -June 2-4, 2020 d. 1131h Annual Meeting - November 1-4, 2020

2. CPA Evolution- Considering the Core Plus Model

3. Guest speakers from NASBA:

a. J. Coalter Baker, CPA- NASBA Director-at-Large b. A. Carlos Barrera, CPA- NASBA Chair-elect c. Thomas G. Prothro, CPA- NASBA Administration and Finance Committee

V. Mr. LaFrey, Rules Committee Chair, reported on the March 11, 2020 committee meeting:

Members Present

Manuel Cavazos IV, Esq. CPA Lisa Friel, CPA Ross Johnson, CPA Timothy L. LaFrey, Esq., CPA Roselyn Morris, PhD, CPA

Members Absent

Benjamin Pena, CPA Kimberly Wilkerson, Esq.

Others Present

Robert Goldstein, CPA Gary Mcintosh, CPA

Staff Present

Paulette Beiter, Esq. Alan Hermanson, CPA J. Randel Hill, Esq.· Donna Hiller Marisa Rios William Treacy Daniel Weaver

A. Mr. LaFrey moved to adopt on an emergency basis an amendment to Rule 511.57 (Qualified Accounting Courses). Ms. Aimone seconded the motion and it pc:~ssed unanimously. The basis of the emergency rulemaking was due to the COVID-19 threat. (ATTACHMENT 2)

B. Mr. LaFrey moved to authorize the executive director to have the proposed Chapter 501 (Rules of Professional Conduct) amendments published in the Texas Register for public comment. Dr. Morris seconded the motion and it passed unanimously. (ATTACHMENT 3)

C. Mr. LaFrey reported that the next committee meeting was scheduled for May 13, 2020 at 1:30 p.m.

VI. Dr. Morris, Qualifications Committee Chair, reported on the March 11, 2020 committee meeting:

Members Present

Kelly Aimone, Esq. Manuel Cavazos IV, Esq., CPA Renee Foshee, CPA Jennifer Johnson, CPA J. 'Kamas, CPA Kevin Koch, CPA Roselyn Morris, PhD, CPA Melanie Thompson, CPA

Others Present

Ashley Morgan, Esq.

2

Staff Present

Gilbert Gutierrez J. Randel Hill, Esq. Donna Hiller William Treacy


A. Dr. Morris reported that the committee discussed and reviewed the Fifth-Year Accounting Student Scholarship program along with the process of awarding funds to participating Texas educational institutions.

B. Dr. Morris informed the Board that the committee reviewed statistical data related to the Application of Intents that were deposited and approved in FY 19/20.

C. Dr. Morris stated that the committee reviewed Rule 511.57 (Qualified Accounting Courses) and forwarded its proposed amendments to the Rules Committee for emergency adoption as a result of the threat of COVID-19.

D. Dr. Morris reported that the committee reviewed Chapter 511 (Educational Requirements) and forwarded its recommended amendments to the Rules Committee pursuant to Section 2001.039 of the Texas Government Code related to the Rule Review process.

E. Dr. Morris reported that the committee reviewed and discussed the AI CPA's exposure draft of the recent practice analysis of the Uniform CPA Examination. The members of the committee were asked to submit their comments to the staff and committee chair by March 23, 2020. Dr. Morris moved to submit the committee's response to the AI CPA, on behalf of the Board, by April 30, 2020. Ms. Sharp seconded the motion and it passed unanimously.

F. Dr. Morris reported that the committee discussed the NASBA article on the CPA Evolution; however, additional information is needed along with a projected timeline for the implementation of the CPA Evolution.

G. Dr. Morris informed the Board that the committee reviewed and considered data on the success rate of the CPA exams taken in FY 2019.

VII. Mr. Weaver, Director of Licensing, reported on the status of the fingerprinting process and on the Unauthorized Practice of Public Accountancy.

VIII. Mr. Ingram, Behavioral Enforcement Committee member, reported on the following committee meeting:

February 12, 2020

Members Present

Charles B. Allison, CPA James D. Ingram IV, CPA Kevin Koch, CPA John Pearce, Esq., CPA Benjamin Pefia, CPA Debra S. Sharp

Members Absent

Patrick Durio, CPA Karen Jones, CPA

Staff Present

Paulette Beiter, Esq. J. Randel Hill, Esq.

A. Dr. Morris moved to dismiss the following investigations based upon insufficient evidence of a violation of the Act or the Rules. Mr. La Frey seconded the motion and it passed. The SEC members did not participate in the vote.

1. Investigation Nos. 19-10-03L1 and 19-10-04L1

2. Investigation Nos. 19-12-02L1 and 19-12-03L1

3. Investigation No. 19-12-01L1

B. Other- The committee considered 11 other matters during its meeting; however, these matters do not require Board action at this time.

C. The next committee meeting was scheduled for April22, 2020 at 9:15a.m.

IX. Ms. Seefeld, Technical Standards Review Committee member, reported on the following committee meeting:

January 16, 2020

Members Present

Lisa A. Friel, CPA Pete M. Gonzales, CPA Jeffrey L. Johanns, CPA Robert M. McAdams, CPA Debra Seefeld, CPA Dilliana Stewart, CPA Juliet Williams, CPA

Member Absent

Ross Johnson, CPA

3

Staff Present

J. Randel Hill, Esq. John Moore, Esq.


A. Mr. Ingram moved to dismiss the following investigations based upon insufficient evidence of a violation of the Act or the Rules. Mr. Koch seconded the motion and it passed. The TSR members did not participate in the vote.

1. Investigation Nos. 19-05-09T2, 19-05-1 OT2 and 19-05-11T2

2. Investigation Nos. 19-08-06T2 and 19-08-07T2

B. Mr. Koch moved to deny the request for waiver of provisions from the following. Mr. LaFrey seconded the motion and it passed. The TSR members did not participate in the vote.

Investigation No. 19-12-01A

C. Other- The committee considered five other matters during its meeting; these matters do not require Board action at this time.

D. The next committee meeting was scheduled for May 14, 2020 at 11:30 a.m.

X. Mr. Hill, General Counsel, reported on the status of the Enforcement Division's probation monitoring program.

XI. The Board took the following actions on agreed consent orders (ACOs) and administrative disciplinary actions:

A. Agreed Consent Orders:


Dr. Morris moved to approve the following ACOs as presented. Mr. Grant seconded the motion and it passed.

1. Investigation No.: 19-09-07L Hometown: Comfort, TX Respondent: Jayesh Dindayal Patel Certificate No.: 100214 Rule Violation: 501.90(4) Act Violations: 901.502(6), 901.502(1 0), 901.502(11) Respondent entered into an ACO with the Board whereby Respondent's certificate was revoked for a period of 10 years from the effective date of the Board Order; however, the revocation was stayed, and Respondent was placed on probation for 10 years. In addition, Respondent must pay $339.39 in administrative costs within 30 days of the date of the Board Order and must participate in a consultation and evaluation with the Accountants Confidential Assistance Network (ACAN). Respondent received 10 years deferred adjudication for the felony offense of Aggravated Assault with a Deadly Weapon.3

2. Investigation No.: 19-08-06L Hometown: Coppell, TX Respondent: Christopher Fuller Nesmith Certificate No.: 108010 Rule Violation: 501.90(4) Act Violations: 901.502(6), 901.502(1 0), 901.502(11) Respondent entered into an ACO with the Board whereby Respondent's certificate was revoked for a period of two years from the effective date of the Board Order; however, the revocation was stayed, and Respondent was placed on probation for two years. In addition, Respondent must pay $390.34 in administrative costs within 30 days of the date ofthe Board Order and must participate in a consultation and evaluation with the Accountants Confidential Assistance Network (ACAN). Respondent received two years deferred adjudication for the felony offense of Possession of a Controlled Substance.3


Mr. Ingram moved to approve the following ACOs as presented. Mr. LaFrey seconded the motion and it passed.

1. ·Investigation No.: Respondent: Rule Violation: Act Violations:

19-11-03L Hometown: John Ramon Gramstad Certificate No.: 501.81 901.401' 901.502(6), 901.502{11)

4

McKinney, TX 114317


Respondent entered into an AGO with the Board whereby Respondent was reprimanded and ordered to pay $1,500 in administrative penalties and $136.47 in administrative costs within 30 days of the Board Order. Respondent issued reviewed and compiled financial statements without a firm license.4

2. Investigation No.: 19-05-11 L Hometown: The Woodlands, TX Respondent: Ntianu Onyekachi Okam Certificate No.: 088199 Rule Violation: 501.81 Act Violations: 901.401' 901.502(6), 901.502(11) Respondent entered into an AGO with the Board whereby Respondent was reprimanded and ordered to pay $1,000 in administrative penalties and $273.13 in administrative costs in monthly installment ·payments over a period of one year from the date of the Board Order. Respondent issued reviewed financial statements for a non-profit corporation without a firm license.5

3. Investigation No.: Respondent:

Rule Violation: Act Violations:

19-05-01 L Roosevelt Johnson, Jr., CPA, P.C. (Firm) 501.60 901.502(6), 901.502(11)

Hometown: Firm License No.:

Tulsa, OK C09191

Respondent entered into an AGO with the Board whereby Respondent was reprimanded, placed on limited scope prohibiting it from performing U.S. Department of Education audits for a period of one year from the date of the Board Order and ordered to pay $2,500 in administrative penalties and $812.32 in administrative costs within 30 days of the Board Order. Respondent issued audited financial statements for a school which were filed with the U.S. Department of Education that failed to meet Generally Accepted Auditing Standards, Statement of Standards for Attestation Engagements, Government Auditing Standards and the U.S. Department of Education Audit Guide for Student Financial Assistance. 5

4. Investigation No.: Respondent: Rule Violation: Act Violations:

19-03-11L Hometown: Blessing Okocha-Ezeude Certificate No.: 501.81 901.401' 901.502(6), 901.502(11)

Houston, TX 060235

Respondent entered into an AGO with the Board whereby Respondent was reprimanded and ordered to pay $1,000 in administrative penalties and $327.75 in administrative costs within 30 days of the Board Order. Respondent issued audited financial statements for a career school which were filed with the Texas Workforce Commission Career Schools Division without a firm license.5

B. Administrative Disciplinary Actions:

Ms. Yanuzzi moved to approve the following Disciplinary Actions as presented. Mr. Koch seconded the motion and it passed unanimously.

1. Respondents: In the Matter of Disciplinary Action Against Certain Licensees for Nonpayment of Professional Fees for Three Consecutive License Periods

The Respondents failed to pay their licensing fees for three consecutive license periods. Respondents, although properly notified of the proposed disciplinary action and their right to a hearing on the matter, failed to request a hearing. Staff recommends that the certificate of each Respondent still not in compliance be revoked without prejudice. Each Respondent may regain his or her certificate by paying all license fees and late fees and by otherwise coming into compliance with the Act. Respondents violated Act Section 901.502(4) (failure to pay license fees for three consecutive years). (ATTACHMENT 4)

Investigation Numbers . 19-10-10094- 19-10-10271

19-11-10001 -19-11-10054

2. Respondents: In the Matter of Disciplinary Action Against Certain License Holders for CPE Delinquencies

The Respondents failed to comply with CPE reporting requirements found in Chapter 523 of the Rules and Act Section 901.411 (Continuing Professional Education). The Respondents, although having been notified of the proposed disciplinary action and their right to a hearing on the matter, failed to request a hearing. Staff recommends that the license of each Respondent still not in com-

5


pliance be suspended for a period of three years, or until he or she complies with the licensing requirements of the Act, whichever is sooner. Additionally, staff recommends a $100 penalty be imposed for each year a Respondent is not in compliance with the Board's CPE requirements. Respondents violated Board Rules 501.94 (Mandatory CPE) and 523.111 (Required CPE Reporting), and Act Section 901.411. (ATTACHMENT 5)

Investigation Numbers 19-10-10272- 19-10-10286 19-11-10055- 19-11-10221

3. Respondents: In the Matter of Disciplinary Action Against Certain Certificate Holders for Failure to Complete License Notice

The Respondents failed to complete their license renewal notices in accordance with Board Rule 515.3 (License Renewals for Individuals and Firm Offices). Respondents, although properly notified of the proposed disciplinary action and their right to a hearing on the matter, failed to request a hearing. Staff recommends the certificate of each Respondent not in compliance be revoked without prejudice until such time as the Respondent complies with the requirements of the Rules and the Act. Respondents violated Act Section 901.502(12) (Violations of Board Rules). (ATTACHMENT 6)

Investigation Numbers 19-10-10287-19-10-10323 19-11-10222- 19-11-10248

XII. Mr. Cavazos reviewed the schedule of future Board meetings.

XIII. Mr. Cavazos adjourned the meeting at 12:15 p.m.

ATTEST:·

Manuel Cavazos IV, Esq., CPA, Presiding Officer Timothy L. LaFrey, Esq., CPA, Secretary

1 Mr. Ingram, Mr. Koch, Mr. Pen a and Ms. Sharp recused themselves from participating in this matter. 2Ms. Friel and Ms. Seefeld recused themselves from participating in this matter. 3Mr. Ingram, Mr. Pefla, and Ms. Sharp recused themselves from participating in this matter. 4Ms. Aimone, Ms. Friel and Ms. Seefeld recused themselves from participating in this matter. 5Mr. Johnson, Ms. Friel and Mr. Grant recused themselves fromparticipating in this matter.

6

Agenda Item Ill

Public Comment

May 14,2020

I. DISCUSSION: Persons wishing to offer public comment to the Board will be given an opportunity to do so at this time.



111-1

Agenda Item IV

Report of the Executive Committee

May 13, 2020

A. Review and possible action on the Board's financial statements

B. Budget Plan for FY 2021

C. Discussion, consideration and possible action on compensatory per diem for Board members.

D. Update on office relocation

E. Review of NASBA/AICPA matters:


a. 38th Executive Directors Conference- March 16-18, 2020- Virtual b. 25th Annual Conference for Board of Accountancy Legal Counsel- March

16-18, 2020- Virtual c. Western Regional Meeting- June 3-4, 2020- Virtual d. 113th Annual Meeting - November 1-4, 2020

F. Review of general correspondence

G. Proposed Annual Evaluation of the Executive Director

IV-1

Agenda Item IV


May 13,2020

A. Review and possible action on the Board's financial statements

. DISCUSSION: Mr. Pella, Treasurer, will present the Board's financial statements.

RECOMMENDATION: The staff recommends that the Board's financial statements be approved as presented.

SUGGESTED MOTION: That the Board's financial statements be approved as presented.

IV-3

IV .. 4

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY Financial Overview For the Seven Months Ended March 31, 2020

Annual Budget

I Actual

I Annual Budget

Revenues - YTD $ 3,949,531 $ 6,368,857

Expenditures - YTD $ (3,077,760) $ (5,783,186)

Net- YTD 871,771 585,671

Transfer Out - SDSI annual payment $ (410,284) $ (703,344)

Net lncrease/(Reduction) in Fund Balance $ 461,487 $ (117,673)

Revenues: See Revenue Budget Summary for additional information

• revenue collected over budget by 3.68% ~ no significant variances

Expenditures: See Expenditure Budget Summary for additional information

• expenditures under budget by 5.11% ~ See Expenditure Budget Summary for discussion of budget items.

I Variance I Percent

11 I . R 1 . Target Vanance

ema mng

$ 2,419,325 37.99% 41 .67% 3.68%

$ 2,705,425 46.78% 41.67% 5.11%

$ 286,100 48.8% 41.67% 7.18%

$ (293,060) 41.7% 41.67% 0.00%

$ 579,160 492.2% 41.67% 450.51%

Revenues and Expenditures and Changes in Fund Balance

I Current Year Prior Year Difference I % Difference I Beginning Fund Balance 9/01/19 $ 4,068,995 $ 3,519,196

Revenues 3,949,531 3,810,574 138,957 3.6%

Expenditures (3,042,934) (3,032,601) 10,333 0.3%

Other Financing Sources (Uses) (411 ,420) (396,669) 14,751 3.7%

Ending Fund Balance 02/29/2020 $ 4,564,172 3,900,500

net increasel(reduction) in FB $ 495,177 $ 381,304

Budgeted Ending Fund Balance $ 3,787,932 $ 2,736,036

Budget Expenditures include encumbrances of $23,591 .05; EXH II expenditures include reversal of prior year accruals of $1 1 ,235. 11 .

Financial Overview March 2020 FY 20 - Simplified Format Financial

IV-5

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY Performance Measures For the Seven Months Ended March 31, 2020

Performance Measures:

Exam Related Measures:

Individuals examined

Sections Taken

Average Sections Taken per Individual

Licensing Related Measures:

Number of individuals licensed

Number of business facilities licensed (firms) a Number of Peer Reviews conducted

Sponsor Review Program Related Measures:

Number of CPE Sponsors Reviewed

Number of CPE Sponsors Subject to Review

Enforcement Related Measures:

Administrative:

Open cases, Beginning

Cases opened

Cases closed

Previous quarter adjustment

Open cases, Ending

Average time for complaint resolution (days)

Disciplinary:

Open cases, Beginning Cases opened

Cases closed

Previous quarter adjustment

Open cases, Ending

Average time for complaint resolution (days)

Sept. 19-Nov. 19

I 1st Qtr.

2,385

2,927

1.23

76,609

9,586

149

36

542

1,260

784

(992)

1,053

145.5

314 60

(98)

3

279

121.8

Dec. 19·Feb.20 Mar. 20-May 20

2nd Qtr. I 3rd Qtr.

2,740

3,290

1.20

76,953

9,443

256

45

568

1,053 1,283

754

(526)

2 1,283 1,283

144.0

279 294

69

(56)

2

294 294

197.7

June 2D·Aug.20

4thQtr. YTD Target %

5,125 11,616 44%

6,217 14,861 42°/o

1.21 1.28 95%

not cumulative 78,578 97%

not cumulative 9,832 97%

405 969 42%

45%

0%

1,283 1,260

1,538

(1,518)

3

1,283

144.91 147.91 98%

294 314

129

(154)

5 294

151 .81 2751 55%

a This measure is the number of Registered Accounting Firms not Practice Units. The number of Practice Units is used for estimating revenue because Firms may have more than one Practice Unit.

b Cases opened and closed categories include adjustments for reclassification of cases and report timing.

FY 19

11,944

15,788

1.32

76,402

9,763

982

~ ~

1,121

2,984

(2,856)

11 1,260

147.91

442

513

(671)

30

314

443.11

Financial Overview March 2020 FY 20 • Simplified Formal Performance Measures

IV-6

UNAUDITED

Texas State Board of Public Accountancy Exhibit I· Combined Balance Sheet/Statement of Net Position- Governmental Funds March 31, 2020

Governmental Fund Types

General Governmental Capital Long-Term Statement Funds Funds Assets Liabilities of

(EXH A-1) Total Adjustments Adjustments Net Position ASSETS

Current Assets: Cash and Cash Equivalents:

Cash on Hand $ 15,991.89 $ 15,991.89 $ $ $ 15,991.89 Cash in Bank -Treasury Safekeeping Trust 4,009.00 4,009.00 4,009.00 Cash in State Treasury 692,011.53 692,011.53 692,011.53 Repurchase Agreement- Treasury Safekeeping 5,468,033.43 5,468,033.43 5,468,033.43

Due From Other Funds - TTSTF {Note A) Consumable Inventories

Total Current Assets 6,180,045.85 6,180,045.85 6,180,045.85

Non-Current Assets: Capital Assets:

Depreciable Furniture and Equipment 37,907.60 37,907.60

Accumulated Depreciation Vechicle, Boats, and Aircraft

Accumulated Depreciation Other Capital Assets

Accumulated Depreciation Other Non-Current Assets

Total Non-Current Assets 37,907.60 $7,907.60 Total Assets $ 6,180,045.85 $ 6,180,045.85 $ 37,907.60 $ 6,217,953.45

LIABILITIES AND FUND BALANCES Liabilities:

Current Liabilities: Payables From:

Vouchers Payable $ $ $ $ $ Accounts Payable 168,754.50 168,754.50 168,754.50 Payroll Payable 286,569.31 286,569.31 286,569.31 Refunds Payable (103.45) (103.45) {103.45)

Due To Other Funds - TTSTF {Note A) 58,612.00 58,612.00 58,612.00 Funds Held for Others 307,911.68 307,911.68 307,911.68 Employees Compensable Leave 67,668.14 67 668.14

Total Current Liabilities 821 ,744.D4 821,744.04 67,668.14 889,412.18

Non-Current Llabtlities: Employees Compensable Leave 344,768.49 344,768.49

Total Non-Current Liabilities 344,768.49 344,768.49 Total Liabilities 821,744.04 821,744.04 412,436.63 1 ,234,180.67

FUND FINANCIAL STATEMENT-FUND BALANCES Fund Balances (Deficits):

Nonspendable Committed:

Board Polley Reserve 2,499,141.00 2,499,141.00 2,499,141.00 Other 2,859,160.81 2,859,160,81 2,859,160.81

Total Fund Balances 5,358,301.81 * 5,358,301.81 5,358,301 .81 Total Liabilities and Fund Balances $ 6,180,045.85 $ 6,180,045.85

GOVERNMENT-WIDE STATEMENT-NET POSITION Net Position:

Net Investment in Capital Assets, Net of Related Debt 37,907.60 37,907.60

Restricted Unrestricted {412,436.63) {412,436.63)

Total Net Position $ 37,907.60 * $ {412,436.63) * $ 4,983,772.78 *

*Column totals should agree to Exhibit II column totals.

\Jete A: Transfers between accounts in TTSTC pending

The accompanying notes to the financial statements are an Integral part of this statement~

. V-7

UNAUDITED

Texas State Board of Public Accountancy Exhibit A-1 - Balance Sheet· All General and Consolidated Funds Scholarship Fund Operating Fund March 31 , 2020

(1 000) (0858) (1009) Total U/F (1002} U/F (7106, 6106) U/F (1 009, 2858) (EXH I)

ASSETS Current Assets:

Cash and Cash Equivalents: Cash on Hand $ 850.00 $ 330.00 $ 14,811.89 $ 15,991.89 Cash in Bank - Treasury Safekeeping Trust 80.00 3,929.00 4,009.00 Cash in State Treasury 26,110.09 665,901.44 692,011.53 Repurchase Agreement- Treasury Safekeeping Trust 307,061.68 767,609.68 4,393,362.07 5,468,033.43

Due From Other Funds Consumable Inventories

Total Current Assets 307,911.68 794,129.77 5,078,004.40 6,180,045.85

Non-Current Assets: Total Noncurrent Assets

Total Assets $ 307,911.68 $ 794,129.77 $ 5,078,004.40 $ 6,180,045.85

LIABILITIES AND FUND BALANCES Liabilities:

Current Liabilities: Payables From:

Accounts Payable $ $ $ 168,754.50 $ 168,754.50 Payroll Payable 286,569.31 286,569.31 Refunds Payable (1 03.45) (103.45)

Due To Other Funds 58,612.00 58,612.00 Funds Held for others 307,911.68 307,911.68

Total Current Liabilities 307,911.68 513,832.36 821,744.04

Non-Current Liabilities: lntertund Payables

Total Non-Current Liabilities Total Liabilities 307,911.68 513,832.36 821,744.04

FU~D FINANCIAL STATEMENT-FUND BALANCES Fund Balances (Deficits):

Nonspendable Committed:

Board Policy Reserve 2,499,141.00 2,499,141.00 Other 794,129.77 2,065,031.04 2,859,160.81

Total Fund Balances 794,129.77 4,564,172.04 5,358,301.81 Total Liabilities and Fund Balances $ 307,911.68 $ 794,129.77 $ 5,078,004.40 $ 6,180,045.85

The accompanying notes to the financial statements are an Integral part of this statement.

IV-8

UNAUDITED

Texas State Board of Public Accountancy Exhibit II - Combined Statement of Revenues, Expenditures, and Changes in Fund Balances/Statement of Activities- Governmental Funds For the Month Ending March 31, 2020

General Governmental Capital Long-Term Statement Funds Funds Assets Liabilities of

(EXH A-2) Total Adjustments Adjustments Activities REVENUES

Licenses, Fees & Permits License Fees 4,106,022.85 4,106,022.85 4,106,022.85 Exam Fees 192,070.00 192,070.00 192,070.00 Other License, Fees & Permits 635.00 635.00 635.00

Interest and Investment Income 40,973.84 40,973.84 40,973.84 Other 22,529.64 22,529.64 22,529.64

Total Revenues 4,362,231.33 4,362,231.33 4,362,231.33

EXPENDITURES Salaries and Wages 1 ,568,070.99 1 ,568,070.99 47,370.20 1,615,441.19 Payroll Related Costs 525,612.34 525,612.34 525,612.34 Professional Fees and Services 241,413.12 241,413.12 241,413.12 Travel 16,653.84 16,653.84 16,653.84 Materials and Supplies 96,696.53 96,696.53 96,696.53 Communication and Utilities 21,675.45 21,675.45 21,675.45 Repairs and Maintenance 55,297.64 55,297.64 55,297.64 Rentals & Leases 89,176.61 89,176.61 89,176.61 Printing and Reproduction 29,617.15 29,617.15 29,617.15 Other Expenditures 291,220.55 291,220.55 291,220.55 State Pass Through Expenditures 404,447.00 404,447.00 404,447.00 Intergovernmental Payments 159,261.00 159,261.00 159,261.00 Public Assistance Payments 107,500.00 107,500.00 107,500.00 Capital Outlay Depreciation Expense

Total Expenditures/Expenses 3,606,642.22 3,606,642.22 47,370.20 3,654,012.42

Excess (Deficiency) of Revenues Over Expenditures . 755,589.11 755,589.11 (47,370.20) 708,218.91

OTHER FINANCING SOURCES (USES) Transfers In (Note 1.F.) 4,450,955.91 4,450,955.91 4,450,955.91 Transfers Out (Note 1.F.) (4,862,395.91) (4,862,395.91) ( 4,862,395.91)

Total Other Financing Sources and Uses (411 ,440.00) (411 ,440.00) (411,440.00)

Net Change in Fund Balances/Net Position 344,149.11 344,149.11 (47,370.20) 296,778.91

FUND FINANCIAL STATEMENT-FUND BALANCES Fund Balances--Beginning 5,014,152.70 5,014,152.70 5,014,152.70

Fund Balances, September 1, 2019, as Restated 5,014,152.70 5,014,152.70 5,014, 152,70

Fund Balances--March 31, 2020 $ 5,358,301.81 • $ 5,358,301 .81 • $ $ (47,370.20) $ 5,310,931.61

GOVERNMENT-WIDE STATEMENT-NET POSITION

Net Assets/Change in Net Position 5,358,301 .81 (47,370.20) 5,310,931.61

Net Position-Beginning 37,907.60 (365,066.43) (327,158.83) Restatements

Net Position, September 1, 2019, as Restated 37,907.60 (365,066.43) (327, 158.83)

Net Position-March 31, 2020 $ 37,907.60 * $ (412,436.63). $ 4,983, 772.78

*Column totals should agree to Exhibit I column totals

The accompanying notes to the financial statements are an integral part of this stale~e;t.

lv-9

UNAUDITED

Texas Stale Board of Public Accountancy Exhibit A-2 - Combining Statement of Revenues, Expenditures, and Changes In Fund Balances - All ~eneral and Consolidated Funds

For the Month Ending March 31, 2020

Memorandum Only (0858) (1009)

(0858) (1009) Total U/F (6106,7106) U/F (1009,2868)

UIF {7106, 6106) U/F (1009, 2868) (EXHII) FY19 FY19 Total FY 19 Difference

REVENUES

Licenses, Fees & Permits :

Licenses, Fees $ 397,350.60 $ 3,708,672.25 $ 4,106,022.85 $ 386,444.76 $ 3,462,099.50 $ 3,848,544.26 $ 257,478.59 A

Exam Fees 192,070.00 192,070.00 159,100.00 159,100.00 32,970.00 B

Other License, Fees & Permits 635.00 635.00 674.00 674.00 (39.00)

Sales of Goods and Services

Interest and Investment Income 6,665.43 34,308.41 40,973.84 7,507.54 41,893.80 49,401.34 (8,427.50)

Other 8,684.00 13,845.64 22,529.64 5,547.45 146,806.69 152,354.14 (129,824.50) c Total Revenues 412,700.03 3,949,531.30 4,362,231.33 399,499.75 3,810,573.99 4,210,073.74 152,157.59

EXPENDITURES

Salaries and Wages 1 ,568,070.99 1 ,568,070.99 1,584,785.72 1,584,785.72 (16,714.73)

Payroll Related Costs 525,612.34 525,612.34 531,770.12 531,770.12 (6,157.78)

Professional Fees and Services 241,413.12 241,413.12 232,166.20 232,166.20 9,246.92

Travel 16,653.84 16,653.84 25,601.86 25,601.86 (8,948.02)

Materials and Supplies 96,696.53 96,696.53 104,965.17 104,965.17 (8,268.64)

Communication and Utilities 21,675.45 21,675.45 21,549.95 21,549.95 125.50

Repairs and Maintenance 55,297.64 55,297.64 56,000.74 56,000.74 (703.10)

Rentals & Leases 89,176.61 89,176.61 62,628.42 62,628.42 26,548.19 D

Printing and Reproduction 29,617.15 29,617.15 25,691.34 25,691.34 3,925.81 E

Other Expenditures 291,220.55 291,220.55 279,941.44 279,941.44 11,279.11 F

State Pass Through Expenditures 404,447.00 404,447.00 330,903.15 330,903.15 73,543.85

Intergovernmental Payments 159,261.00 159,261.00 127,318.00 127,318.00 31,943.00

Public Assistance Payments 107,500.00 107,500.00 107,500.00 107,500.00

Capital Outlay

Depreciation Expense

Total Expenditures/Expenses 563,708.00 3,042,934.22 3,606,642.22 458,221.15 3,032,600.96 3,490,822.11 115,820.11

Excess (Deficiency) of Revenues

over Expenditures (151,007.97) 906,597.08 755,589.11 (58,721.40) 777,973.03 719,251.63 36,337.48

OTHER FINANCING SOURCES (USES)

Transfers In (Note 1.F.) 591,438.09 3,859,517.82 4,450,955.91 517,506.27 3,750,483 4,267,989.15 182,966.76

Transfers Out (Note 1.F.) {591 ,458.09) (4,270,937.82) (4,862,395.91! (517,596.27) (4,161,733.81) (4,679,330.08) (183,065.83)

Total Other Financing Sources and Uses (20,00) (411 ,420.00) (411 ,440.00) (90.00) (396,669.48) (396,759.48) (14,680.52)

Net Change In Fund Balances (151,027.97) 495,177.08 344,149.11 (58,811.40) 381,303.55 322,492.15 21,656,96

FUND FINANCIAL STATEMENT-FUND BALANCES

Fund Balances--Beginning 945,157.74 4,068,994.96 5,014,152.70 774,253.65 3,519,196.30 4,293,449.95 720,702.75

Fund Balances, 9/1/2019 as Restated 945,157.74 4,068,994.96 5,014,152.70 774,253.65 3,519,196.30 4,293,449.95 720,702.75

Fund Balances--March 31, 2020 $ 794,129.77 $ 4,564,172.04 $ 5,358,301.81 $ 715,442.25 $ 3,900,499.85 $ 4,615,942.10 $ 742,359.71

A Licenses, Fees & Permits revenue higher due to license fee Increase from $56 to $65

B Exam Fees higher due to exam eligibility fee increase from $10 per part to $15 per part

C Other revenue lower due to enforcement direct administrative cost collections.

D Rental & Leases higher due to new office space lease

E Printing and Reproduction higher due to printing of The Act

F Other Expenditures higher due to new office space lease

The accompanying notes to the financial statements JM "a~'il,tegral part of this statement.

UNAUDITED

Texas State Board of Public Accountancy Exhibit J-1 -Combining Statement of Changes in Assets and Liabilities

Agency Funds

March 31 , 2020

Beginning Ending Balance Balance

September 1, 2019 Additions Deductions March 31, 2020

UNAPPROPRIATED RECEIPTS

General Revenue Fund (0001) U/F (0002)

ASSETS Current

Cash on Hand $ 608.34 $ 20,116.68 $ 19,875.02 $ 850.00 Cash In Bank- Trust 1,450.00 3,050.00 4,500.00 Cash in State Treasury Repurchase Agreement - Treasury Safekeeping T 116,058.37 1 ,442,925.99 1,251,922.68 307,061.68 Due From Other Funds

Total Assets $ 118,116.71 $ 1,466,092.67 $ 1,276,297.70 $ 307,911.68

LIABILITIES Current

Payables $ $ $ $ Funds Held for Others 118,116.71 1 ,466,092.67 1,276,297. 70 307,911.68

Total Liabilities $ 118,116.71 $ 1,466,092.67 $ 1,276,297.70 $ 307,911.68

Local Jurisdictions Sales Tax {0882) U/F (0882) ASSETS

Current Cash on Hand $ $ $ $ Cash in State Treasury Short Term Investments

Total Assets $ $ $

LIABILITIES Current

Payables $ $ $ $ Funds Held for Others

Total Liabilitle~ $ $ $ $

TOTALS- ALL AGENCY FUNDS

ASSETS Current

Cash on Hand $ 608.34 $ 20,116.68 $ 19,875.02 $ 850.00 Cash in Bank - Trust $ 1,450.00 $ 3,050.00 $ 4,500.00 $ Cash in State Treasury Repurchase Agreement- Treasury Safekeeping T 116,058.37 1,442,925.99 1,251,922.68 307,061.68 Due From Other Funds

Total Assets $ 118,116.71 $ 1 ,466,092.67 $ 1,276,297.70 $ 307,911.68

LIABILITIES Current

Payables $ $ $ $ Funds Held for Others $ 118,116.71 $ 1 ,466,092.67 $ 1,276,297.70 307,911.68

Total Liabilities $ 11-8,116.71 $ 1 ,466,092.67 $ 1,276,297.70 $ 307,911.68

The accompanying notes to the financial statements are an integral part of this statement.

IV-11

Texas State Board of Public Accountancy 5th Year Accounting Scholarship Payments FY 19

State Universities

For the Month Ending March 31, 2020

FY2020

BEGINNING FUND BALANCE· September 1, 2019 $ 945,157.74

Total Scholarship Fund Revenue $ 412,700.03

State Pass Through Expenditures (EXH A-2) State University Payments:

Angelo State University $ 8,000.00 Lamar University 6,497.00 Prairie View A&M University 3,000.00 Midwestern State University 5,786.00 Sam Houston State University 13,970.00 Stephen F. Austin State University 12,841.00 Tarleton State University 9,000.00 Texas A&M University 42,168.00 Texas A&M University- Corpus Christi 2,500.00 Texas A&M University- Kingsville 1,738.50 Texas State University 25,057.00 Texas Tech University 27,100.00 University of Houston 75,000.00 University of North Texas 18,202.00 University of Texas at Arlington 14,000.00 University of Texas at Austin 33,923.00 University of Texas at Dallas 56,324.00 University of Texas at Ei Paso 14,272.00 University of Texas at San Antonio 6,000.00 University of Texas Rio Grande Valley 17,252.50 University of Texas at Tyler 6,444.00 University of Texas of the Permian Basin 2,000.00 West Texas A&M University 3,372.00

Total State University Payments $ 404,447.00

Stale University Refunds:

Total State University Refunds

State Pass Through Expenditures (EXH A-2) $ 404,447.00

Intergovernmental Payments (EXH A-2) Junior College/ Private University Payments: Austin Community College $ 4,000.00

Abilene Christian University 3,822.00

Baylor University 27,723.00

Dallas Baptist University 7,200.00

Houston Community College System 6,021.00

Lone Star College System 3,000.00 Lubbock Christian University 3,000.00

McMurry University 3,708.00

Mountain View College 2,514.00

Our Lady of the Lake- San Antonio 4,226.00

Rice University 15,089.00 Southern Methodist University 24,729.00

St. Edward's University 5,000.00

Texas Christian University 24,295.00 Texas Lutheran University 9,321.00

Texas Wesleyan University 3,120.00 Trinity University 14,093.00

Total Junior College/ Private University Payments: $ 160,861.00

Junior College/ Private Unlv. Refunds:

Dallas Baptist University (1,600.00)

Total Junior College/ Private University Refunds: $ (1,600.00)

Intergovernmental Payments (EXH. A-2) 159,261.00

Other Financing Sources/Uses

Scholarship Refunds (20.00)

Total Other Financing Sources/Uses (EXH. A-2) $ (20.00)

ENDING FUND BALANCE· March 31, 2020 $ 794,129.77

IV-12 0~\FTNANrTAI STATFMFNT<;\FY 70\Srhnlln..:;htn PRvmPnt<:: 01.70

UNAUDITED

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

SCHEDULE B STATEMENT OF PENALTIES ASSESSED\ CONTRIBUTIONS For the Month Ending March 31, 2020

INTEREST/ ADMIN RTN CKFEES

DAC PENALTY OVERPAYMENT STATUS 19160 37700 19920/31100 TOTAL

BEGINNING BALANCE- September 1, 2019 $6,986.30 $58,376.45 $65.57 $65,428.32

ADD: Penallles Assessed\ Conlribullons: Trlicek, Gregory L. & Firm Oct-19 218.50 1,000.00 1,218.50 Thakkar, Mahesh Nov-19 3,785.67 60,000.00 63,785.67 Fitzgerald, Paul J. & Firm Nov-19 362.36 6,500.00 6,682.36 Azuogu, Azubulke Nov-19 1,200.00 1,200.00 Wherry, Deborah Dec-19 500.00 500.00 Crowley, Wesley F. Dec-19 240.82 1,000.00 1,240.62 Matlhews, Frederick R. & Firm Dec-19 163.88 1,000.00 1,163.88 Oneal, Thomas M. & Firm Dec-19 1,138.78 5,000.00 6,138.78 Beauchamp, Lance Feb-20 358.20 358.20 Hughes, Jonathan & Firm Feb-20 1,138.78 50,000.00 51,138.78 Butlon, Mary Ann Feb-20 1,016.76 1,000.00 2,016.76 Osenbaugh, Alan, M. Feb-20 333.10 14,000.00 14,333.10 Wallace, Russell & Firm Feb-20 357.11 1,000.00 1,357.11 Gramstad, John A. Feb-20 136.47 1,500.00 1,636.47 Del Bosque, Gilbert & Firm Mar-20 163.88 5,000.00 5,163.88 Hopkins, Andrew M. & Rrm Mar-20 264.95 1,000.00 1,264.95 Patel, Jayesh Mar-20 339.39 339.39

TOTAL PENALTIES ASSESSED\ CONTRIBUTIONS 11 738.67 148,000.00 0.00 159 738.67

LESS: Payments Received: Manis Jr., Mathew P. Sept-19 pp (800.00) (800.00) Ridenour, Jon E. Sept-19 pp (600.00) (600.00) Williford, Gregory S. Sept-19 pp (208.34) (208.34) Wlllllord, Gregory S. Oct-19 pp (208.34) (208.34) Turner, Julie L. Oct-19 PP (200.00) (200.00) Trllcek, Gregory L. & Rrm Oct-19 PIF (218.50) (1,000.00) (1,218.50) Mock, Ronald E. Nov-19 pp (1,000.00) (1,000.00) Manis Jr., Mathew P. Nov-19 pp (800.00) (800.00) Ridenour, Jon E. Nov-19 pp (600.00) (600.00) Thakkar, Mahesh Nov-19 pp (1,529.97) (3,785.67) (5,315.64) Fitzgerald, Paul J. & Firm Nov-19 PIF (382.38) (6,500.00) (6,882.38) Azuogu, Azubulke Nov-19 pp (1,200.00) (1,200.00) Wherry, Deborah Dec-19 pp (500.00) (500.00) Thakkar, Mahesh Dec-19 pp (2,255.70) (3,059.94} (5,315.64) Willllord, Gregory S. Dec-19 pp (208.34) (208.34) Turner, Julie L. Dec-19 pp (200.00) (300.00) (500.00) Crowley, Wesley F. Dec-19 PIF (240.82) (1,000.00) (1,240.82) Matthews, Frederick R. & Firm Dec-19 PIF (163.88) (1,000.00) (1,163.88) Oneal, Thomas M. & Firm Dec-19 PIF (1,138.78) (5,000.00) (6,138.78) Thakkar, Mahesh Jan-20 pp {5,315.64) (5.315.64) Williford, Gregory S. Jan-20 pp (208.34} (208.34) Thakkar, Mahesh Feb-20 pp (5,315.64) (5,315.64) Williford, Gregory S. Feb-20 pp (208.34) {208.34) Hughes, Jonathan & Firm Feb-20 PIF (1,138.78) (50,000.00} (51 ,138.78) Button, Mary Ann Feb·20 PIF (1,016.76) (1,000.00) {2,016.76) Osenbaugh, Alan, M. Feb-20 PIF (333.10) (14,000.00) (14,333.10) Wallace, Russell & Firm Feb-20 PIF (357.11) (1,000.00) (1,357.11) Gramstad, John R. Feb-20 PIF (138.47) (1,500.00) (1 ,636.47) Manis Jr., Mathew P. Feb-20 pp (800.00) (800.00) Ridenour, Jon E. Feb-20 pp {600.00) (600.00) Thakkar, Mahesh Mar-20 PP (5,315.64) (5,315.64) Williford, Gregory S. Mar-20 PP (206.34) (208.34) Del Bosque, Gilbert & Firm Mar-20 pp (1,296.96) (1,296.96) Patel, Jayesh Mar-20 PIF (339.39) (339.39)

TOTAL PAYMENTS RECEIVED (11,151.64) (113,039.53) 0.00 (124,191.1I)

Adjustments:

TOTAL ADJUSTMENTS 0.00 0.00 0.00 0.00

Referred to OAG Enforcement lor Collection: Beauchamp, Lance Feb-20 (358.20) (358.20) Hopkins, Andrew M. & Firm Mar-20 (264.95) (1,000.00) (1 ,264.95)

TOTAL REFERRED TO ENFORCEMENT (623.15) (1 ,000.00) 0.00 (1,623.15)

ENDING BALANCE- March 31, 2020 $6,950.18 $92,336.92 $65.57 $99 352.67

Note: PIF., Paid In FuN, PP = Partial Payment, and AEF=Aefund

IV-13 - ·-······-··· --·--· ·-··--·-· ~~·~.-·· ~---

Texas State Board of Public Accountancy Revenue Budget Report

From September 1, 2019- March 31, 2020

Current Period

Account Title Revenue YTD Revenue Total Budget Variance

CPA License $ 352,440 $ 2,622,208 $ 4,406,520 $ 1,784,311

CPE Sponsor Review 15,100.00 180,950.00 296,636.00 115,686.00

Firm Office License 70,362.58 584,321.32 857,133.47 272,812.15

CPA Late Payment Penalty 32,075.50 189,867.50 184,069.00 (5,798.50)

Firm Office Late Payment Penalty 3,650.00 36,255.00 78,879.00 42,624.00

Late Payment Fees 35,725.50 226,122.50 262,948.00 36,825.50

Exam Evaluation Fee 4,440.00 43,290.00 75,440.00 32,150.00

Transfer of Credit IN 400.00 2,620.00 3,259.00 639.00

Exam Eligibility Fee- AUD 5,145.00 34,755.00 66,068.00 31,313.00 Exam Eligibilty Fee- BEC 3,660.00 31,045.00 72,623.00 41,578.00 Exam Eligibilty Fee- FAR 4,830.00 42,615.00 59,515.00 16,900.00 Exam Eligibilty Fee- REG 5,490.00 31,305.00 64,039.00 32,734.00

Exam Fees 23,965.00 185,630.00 340,944.00 155,314.00

Public Accountant License 0.00 0.00 57.00 57.00

Certificate Fee 6,400.00 55,950.00 99,146.00 43,196.00

Section 14 License 0.00 0.00 317.00 317.00

Reciprocal Registration 3,900.00 39,000.00 32,719.00 (6,281 .00)

Temporary Practice 0.00 0.00 0.00 0.00

Direct Administrative Costs- Enforcement 339.39 11,151.64 . 38,997.00 27,845.36

Voided Warrants 0.00 1,144.00 0.00 (1 ,144.00)

Transfer of Credit- OUT 600.00 6,440.00 8,958.00 2,518.00

Interest Income 2,201.67 34,308.41 18,677.00 (15,631.41)

Sales of Lists/Miscellaneous Copies/NSF Fe1 132.00 755.00 2,644.00 1,889.00

Lettering of CPA Certificate 100.00 1,350.00 3,161.00 1,811 .00

AICPA Regrades 200.00 200.00 0.00 (200.00)

Other Collections 13,873.06 150,299.05 204,676.00 54,376.95

Total Revenue $ 511 ,466.00 $ 3,949,531.30 $ 6,368,857.00 $2,419,325.70

Revenue and Expenditure Budget Report - March 2020 FY 2020

IV-14

%Budget Remaining

40.5%

39.0%

31.8%

-3.2%

54.0%

14.0%

42.6%

19.6%

47.4% 57.3% 28.4% 51.1%

45.6%

100.0%

43.6%

100.0%

-19.2%

100.0%

71.4%

100.0%

28.1%

-83.7%

71.4%

57.3%

100.0%

26.6%

38.0%

Versus Target

41.67%

F lUJ 1.2%

2.7%

9.8%

44.8%

-12.4%

27.7%

-0.9%

22.1%

-5.7% -15.6% 13.3% -9.4%

-3.9%

-58.3%

-1 .9%

-58.3%

60.9%

-58.3%

-29.7%

-58.3%

13.6%

125.4%

-29.8%

-15.6%

-58.3%

15.1%

3.7%

Revenue Budget

Account Title

Debt Service - Interest

Sal & Wages - Camp. Per Diem

Salaries & Wages Payroll Related Costs (IC)

Payroll Related Costs - Unemp. Prof Fees-Legal Svcs-OAG & OLC

Prof Fees- Fin/Acctg. Svcs. Prof Fees - Expert Witnesses

Prof Fees - PROB Prof Fees - SOAH

Prof Fees - Computer Prof Fees - Other (EAP)

Prof Fees - SAO Audit & Sunset (I C)

PF- SRP- Review Travel-In State-Board Mbrs.

Travel-In State-Employees Travel-In State-Adv Comm Mbrs

Travei-Out-of-State-Bd . Mbrs . Travel-Out-of-State-Employees Material & Supplies Matls/Supp - Office Meter Post

Matls/Supp - Bulk Rate Postage

Matls/Suppl - Other Postage Communication & Utilities

Repairs & Maint-Annual Cants. Repairs & Maintenance - Other

Rentals & Leases-Furn/Eqpt Rentls & Leases-Furn/Eqpt SIC

Rental & Leases-Other Space

Rental & Leases - SIC Rental & Leases-Ofc Bldg (IC)

Rental & Leases-Ofc Space (NEW)

Printing & Reproduction Printing of Board Report OOE - Membership Fees OOE - Registration Fees OOE- Freight/Delivery Svc.

OOE - Convention Center Labor OOE - Monitoring Alarm System

OOE- Employee Awards OOE - Other Fees & Charges OE - TX Online Processing. Fees OOE - Court Reporters

ODE-Statewide Cost Alloc. (I C) OOE-SORM Assessments PUB - Public Assistance Pymts

Capital Outlay-Computer

Texas State Board of Public Accountancy Expenditure Budget Report

From September 1 I 2019 - March 31 I 2020

Current Period YTD YTD Expenditures Expenditures Encumbrances Total Budget Variance

0.00 0.06 0.00 0.00 (0.06)

420.00 2,040.00 0.00 6,478.52 4,438.52 226,101.46 1 ,566,630.99 0.00 2,855,406.11 1,288,775.12

76,130.20 525,612.34 0.00 1 ,040,457.00 514,844.66 0.00 0.00 0.00 0.00 0.00

9,173.69 75,044.32 0.00 177,000.00 101,955.68 0.00 0.00 0.00 30,116.51 30,116.51

14,842.50 76,11 3.50 0.00 229,500.00 153,386.50 6,075.62 29,872.77 0.00 62,097.96 32,225.19

0.00 24,750.00 0.00 27,061.00 2,31 1.00 5,698.00 32,145.00 0.00 131,463.57 99,318.57

1,581 .11 735.77 0.00 1,000.00 264.23

0.00 0.00 0.00 0 .00 0.00 1,097.50 9,367.50 0.00 26,127.00 16,759.50

337.45 12,290.56 0.00 46,426.78 34,136.22

697.07 1,511.82 0.00 3,915.99 2,404.17 (19.50) 2,672.13 0.00 2,726.19 54.06

0.00 3,341.30 0.00 7,972.01 4,630.71 0.00 1,626.72 0.00 8,959.05 7,332.33

(26,443.90) 32,256.02 19,806.38 88,148.55 36,086.15 9,166.67 64,166.69 0.00 110,000.00 45,833.31

0.00 0.00 0.00 3,714.00 3,714.00

0.00 235.00 0.00 199.00 (36.00) 2,973.97 21,188.68 0.00 49,068.46 27,879.78

10,155.04 55,182.61 0.00 81,508.00 26,325.39

(209.23) 115.03 0.00 8,627.06 8,512.03 1,517.61 10,576.58 0.00 22,391.99 11,815.41

0.00 2,918.59 0.00 5,412.16 2,493.57 559.48 6,442.04 0.00 10,530.07 4,088.03

0.00 4,050.00 0.00 7,784.00 3,734.00 5,379.08 37,653.56 0.00 105,289.00 67,635.44

0.00 27,535.84 0.00 0.00 (27,535.84) 0.00 25,692.10 3,784.67 49,684.66 20,207.89 0.00 3,925.05 0.00 10,612.08 6,687.03 0.00 6,300 .00 0.00 9,312.18 3,012.18 0.00 4,295.00 0.00 14,137.00 9,842.00

248.46 1,240.60 0.00 2,315.00 1,074.40 0.00 642.00 0.00 2,509.15 1,867.15 0.00 3,409.90 0.00 3,517.91 108.01 0.00 190.00 0.00 1,082.00 892.00

4,056.24 94,873 .95 0.00 32,472.87 (62,401 .08) 13,796.57 96,576.00 0.00 165,803.00 69,227.00

0.00 0.00 0.00 1,082.00 1,082.00 11,585.33 81,097.31 0.00 139,522.00 58,424.69

0.00 2,352.00 0.00 7,824.00 5,472.00 0.00 107,500.00 0.00 118,688.69 11,188.69 0.00 0.00 0.00 75,243.00 75,243.00

$ 374,920.42 $ 3,054,169.33 $ 23,591 $ 5,783,185.52 2, 705,425.14

Revenue and Expenditure Budget Report- March 2020 FY 2020 IV-15

%Budget Remaining

n/a 68.51%

45.13% 49.48%

n/a 57.60%

100.00% 66.84%

51 .89% 8.54% A

75.55%

26.42%0K

n/a 64.15%

73.53%

61.39%

1.98% 58.09% 81.84% 40.94%

41.67% 100.00%

-18.09%0K

56.82%

32.30% B 98.67%

52.77% 46.07% 38.82%

47.97%0K 64.24%

-100.00% c 40.67% 63.01% 32.35%0K

69.62%

46.41% 74.41% 3.07%0K

82.44%

-192.16% D

41.75% 100.00% 41.87% 69.94%

9.43% E

100.00%

46.78%

Target

41.7% F (U)

n/a 26.84%

3.46% 7.81%

nla 15.93% 58.33% 25.17% 10.22%

-33.13% 33.88%

-15.25%

nla 22.48% 3 1.86% 19.72%

-39.69% 16.42% 40.17% -0.73% 0.00%

58.33% -59.76% 15.15% -9.37% 57.00% 11. 10% 4.40%

-2.85% 6.30%

22.57% -141.67%

-1.00% 21.34% -9.32%

27.95% 4.74%

32.74% -38.60% 40.77%

-233.83% 0.08%

58.33% 0.20%

28.27% -32.24% 58.33%

5.1 1%

Expenditure Budget

Ref.

A

B

c

D

E

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY Budget Variance Explanations

For the Seven Months Ending March 31, 2020

Budget Item Budqet Actual Difference Explanation Operating Budget $3,812,434 $ 2,175,086 $ 1,637,348.00 42.95% budget remaining versus 41 .67% target level

Prof Fees - SOAH $ 27,061 $ 24,750.00 $ 2,311.00 8.54% budget remaining: due to annual payment to the State Office of Administrative Hearings

Repairs & Maintence -Annual $ 81,508 $ 55,182.61 $ 26,325.39 32.30% budget remaining : due to timing of payments for Contracts annual contracts

Rental & Leases - OFC Space $ - $ 27,535.84 $ (27,535.84) -100.00% budget remaining: due to new office space lease (NEW) payment of first month's rent.

OOE - Other Fees & Charges $ 32,473 $ 94,873.95 $ (62,401.08) -192.16% budget remaining: due to new office space lease security deposit; temporary services; 0&0 insurance policy lump sum

PUB - Public Assistance Pymts $ 118,689 $ 107,500.00 $ 11,188.69 9.43% budget remaining: due to annual payment to TSCPA for ACAN Grant.

Note A: Budget Actual (Est.)

Rentals and Leases - Ole Bldg. $ 105,289

subtotal

OOE - Statewide Cost Alloc (SWCAP) $ 139,522

Total $ 244,811

$ $

I $

176,088 per rent contract due to TFC (11 months) (111 ,539) rent portion in SWCAP paid to Comptroller

c...:::....---=6-"4'<.::.54-'-'9'- net rent due to TFC

$ 139,253 per actual SWCAP due to Comptroller

$ 203,802! $ 41,0091

DPS Baclcground Chec/cs are for initial exam candidates and registration of new CPAs (all Qualifications) FBI Baclcground Investigations are for reciprocal applications (Licensing) and transfer of credit and certificate (Qualifications)

Revenue and Expenditure Budget Report - March 2020 FY 2020 IV-16 Budget Variance Explanations

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY Office Relocation - Estimated FY 2020 Expenditures

Assumptions: Number of months in Hobby Building Number of months in Centennial Building ~I (Lease begins June 1, 2020)

Projected Bud9et RENT:

Hobby Building annual $ 192,096.00

$ 16,008.00 monthly number of months I 91 $ 144,072.00 $ 192,096.00 rent abatement number of months 0

Total Hobby Building Rent $ 144,072.00 $ 192,096.00

Centennial Rent@ $12.96 p/sqft (first 4 months) monthly $ 10,278.00 number of months I 31 30,834.00 Rent abatement of 4 months is covered by reduced rent

Total FY 2019 Centennial $ 30,834.00 $

Less SWCAP* rent offset TFC Bldg & Property $ 68,678.00 number of months I 91 (51 ,508.50) (84,201 .00)

Building Depreciation $ 44,861.00 number of months I 91 (33,645.75) (39,905.00)

Rent Offset $ (85, 154.25) $ (124,106.00)

$ 89,751 .75 $ 67,990.00

* SWCAP (Statewide Cost Allocation Plan): $ 139,024.00 $ 139,024.00 Total SWCAP · Less: TFC Bldg & Property $ 68,678.00

number of months I 31 $ (17, 169.50)

Building Depreciation $ 44,861 .00 number of months I 31 $ (11 ,215.25)

MOVING EXPENSES- ESTIMATED: Relocation expenses: Mover - office contents Modular furniture move Project Manager Computer System move Computer Room build out Office Furniture new Copier move Phone/Network cabling Contingency Security deposit - paid Moving Allowance - per lease

GRAND TOTAL

Future Office Space BASE RENT v2

$ 110,639.25 $ 139,024.00

$ 200,391 .00 $ 207,014.00

22,661 .54

25,000.00 20,000.00

... Alan L. Hermanson: Original est. $45,000

Alan L. Hermanson: 122,263.95 Original est. $175,000

1,500.00 25,000.00 50,000.00 37,009.76

(21 ,696.00) /Alan L. Hermanson: _ Original total $356,814

$ 281,739.25 -'$'------

$ 482,130.25 $ 207,01 4.00

IV-17

I SUr[;!IUs/Deficit I

$

$ $

$

$

$

$

$

.$

48,024.00

48,024.00

(30,834.00)

(30,834.00)

(32,692.50)

(6,259.25)

(38,951 .75)

(21?61 .75)

17,169.50

11,215.25

28,384.75 j

6,623.00 ~

(22,661 .54)

(25,000.00) (20,000.00)

(122,263.95) (1 ,500.00)

(25,000.00) (50,000.00) (37,009.76) 21,696.00

$ (281,739.25)

Alan L. Hermanson: $ (275, 116.25)! Original est. $350,191

Agenda Item IV


May 13,2020

B. Budget Plan for FY 2021

DISCUSSION: Mr. Pena, Treasurer, will present the Board's Budget Plan for FY 2021.

RECOMMENDATION: None by staff

SUGGESTED MOTION: None by staff

IV-19

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY Operating Budget Projections 2021-2025

Revenue faclor I Change Fee Amounts Hera Exoendilure faclor

License Fee

Retired/Disabled Fee

Firm License Fee

Firm Organizaton Fee

nt Fee Exam Application of lnte

Exam Section Fee (per part)

Estimated Revenue

Estimated Expenditures

Excess (Deficiency) Revenues

Over Expenditures

1

2-5

6-9

10 -49

50+

Adjustment for Revised Estimates

Estimated Transfers Out

Current Year Surplus/Deficit

Beginning FB- Unreserved

Ending Fund Balance

Board Policy Estimated Fund Balance

Surplus/Defict over Board Policy

Ending Fund Balance

Proof- Must Equal Zero

$

$

$

$

$

$

$

$

$

$

$

$

$

FY2018

56 $

15 $

50 $

- $

10 $

15 $

20 $

25 $

20 $

/ 10 $

6,258,189

(5,389, 168) $

869,021

(703,344)

165,677

3,353,520

3,519,196

2,023,128

1,496,068

3,519,196

$

FY 2019 FY2020

56 $ 65 $

15 $ 15 $

50 $ 60 $

- $ - $

10 $ 10 $

15 $ 15 $

20 $ 20 $

25 $ 25 $

20 $ 20 $

10 $ 15 $

6,348,650 $ 6,368,857 $

(5,095,507) $ (5, 783, 186) $

1,253,143 585,671

279,044

(703,344) (703,344)

549,799 161,371

3,519,196 4,068,995

4,068,995 4,230,366

2,477,221 2,499,141

1,591,774 1,731,226

4,068,995 4,230,368

$ $

PROJECTED

FY 2021 FY 2022

65 $ 70 $

15 $ 15 $

60 $ 60 $

- $ - $

10 $ 10 $

15 $ 15 $

20 $ 20 $

25 $ 25 $

20 $ 20 $

15 $ 15 $

6,468,680 $ 6,823,120 $

(6,060,311) (6, 100,871)

408,369 722,248

(703,344) (703,344)

(294,975) 18,904

4,230,366 3,935,391

3,935,391 3,954,295

2,568,422 2,578,562

1,366,970 1,375,734

3,935,391 3,954,295

$ $

Estimated Fund Balance Reserve Based on 25% of Expenditures and Transfer Out plus $500,000 Enforcement Reserve (through FY 2018):

FY 2023

70

15

60

-10

15

20

25

20

15

6,845,978

(6,247,035)

598,943

(703,344)

(104,401)

3,954,295

3,849,895

2,615,103

1,234,792

3,849,895

Eatlmated Fund Balance Reserve Baaed on 25% of Expenditures PLUS Tranafer Out AND PLUS $500,000 Enforcement Reserve (effective FY 2019):

Expenditures - estimated $ 5,389,168 $ 6,096,507 s 6,783,188 $ 8,080,311 $ 6,100,871 $ 8,247,036

Revised Expendllure adjuslmenl

Transfer out (lhrough FY 201 B) 703,344

Operating Expenditures & Transfer Out s 8,092,512 $ 5,095,607 $ 6,783,188 $ 6,080,311 s 811001871 $ 6,247,035

3 month Operating Reserve $ 1,523,128 $ 1,273,877 s 1,446,797 $ 1,515,078 $ 1,526,218 $ 1,681,769

Enforcement Reserve 500,000 600,000 350,000 350,000 350,000 350,000

Transfer Oul (beginning FY 2019) 703,344 703,344 703,344 703,344 703,344

Total Reserve $ 2,023,128 $ 2,477,221 $ 2,499,141 $ 2,588,422 $ 2,578,662 $ 2,815,103

Fund Balance Reserve Surplus/Dellcll $ 1,496,068 $ 1,591,774 $ 1,731,226 $ 1,366,970 $ 1,375,734 $ 1,234,792

I FY 20181 FY 20191 FY 20201 FY 20211 FY 20221 FY 20231 1 Budget as approved

2 Proposed Budget- not approved

IV-21 iiAI

1.766% 2.00%

FY 2024 FY 2025

$ 70 $ 70

$ 15 $ 15

$ 60 $ 60

$ - $ -$ 10 $ 10

$ 15 $ 15

$ 20 $ 20

$ 25 $ 25

$ 20 $ 20

$ 15 $ 15

$ 6,871,051 $ 6,897,055

(6,406,069) (6,570,026)

464,982 327,029

(703,344) (703,344)

(238,362) (376,315)

3,849,895 3,611,532

3,611,532 3,235,218

2,654,861 2,695,850

956,671 539,367

3,611,532 3,235,218

$ $

s 6,406,089 $ 8,570,028

$ 8,406,089 $ 815701026

$ 1,801,517 $ 1,842,608

350,000 350,000

703,344 703,344

$ 2,654,861 $ 2,695,860

$ 956,671 $ 539,367 FY 20241 FY 20251

TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY FY 2021 Budget Drivers (including FYs 2022- FY 2025) As ofApril, 202~ (YTD Expenditures through March)

FY 2020 Current Fiscal Year Estimates Revenues

Exam Revenue $ 337,685

Firm Office License 857,134

CPA Late Payment Penally 184,069

Interest 18,677

Total Revenue Surplus (Deficit)

Expenditures Salaries and Wages $ 2,855,406

Payroll Related Costs 1,040,458

Prof Fees - Computer 131,464

Prof Fees-Legal Svcs-OAG & OLC 178,000

Prof Fees - Fln/Acctg. Svcs. 30,117

Prof Fees - Expert Witnesses 229,500.00

Rental & Leases-Ole Space (NEW) 0

OOE - Registration Fees 14,138

OOE - Other Fees and Charges 32,473

Office Relocation 0

Total Expenditure Surplus (Deficit)

.Total Surplus (Deficit)

Projected

$ 278,818

941,133

325,486

44,308

2,754,875

906,262

80,106

128,647

0

130,480

27,535

6,795.00

114,874

275,116

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Operating Budget Projections- CARRY FORWARD FY 2021 Budget W-~12

(58,867) Actual $185,630 +estimated 60% of remaining budget amount of $155,000

83,999 Annual budget increased by actual March variance of9.8%

141,417 Actual $189,867 prorated

\

2?,631 Actual $34,308 +estimated $2,000 per month for 5 months

192,180

100,531 Actual $1,566,630 + March budget payroll x 5

134,195 Actual $525,612 + March actual x 5

51,358 Actual $32,145 prorated (metro line/hosting/consulting) + $25K Project Mgr


30,117 No Internal audit FY 2020


(27,535) New office space 1st full month rent

7,343 Actual $4,295 + 5 Bd. Mbr. virtual registration fees; est. of $500 each

(82,401) Actual $94,874 +March actual $4,000 x 5

(275, 116)

86,864

279,044

Budget Briefing for FY 2021

Agenda Item IV


May 13,2020

C. Discussion, consideration and possible action on compensatory per diem for Board members.

DISCUSSION: Staff prepared the attached analysis of the relevant statutes regarding compensatory per diem for Board members. The per diem allowed in the Public Accountancy Act is $100 per day but the rate established in the General Appropriation Act is $30 per day.

The staff's review found that the laws addressing compensatory per diem for Board members are ambiguous. For example language in the Government Code appears to preclude the Board from following its statute which establishes compensatory per diem at $100 per day. Since the Comptroller's Office is the agency responsible for travel and per diem laws for state agencies the staff sought an opinion from that office. The opinion of the Comptroller's Office is attached and states that:

It appears that an argument can be made that TSBPA Board members are entitled to receive a $100 per day per diem.

This is an opinion that will carry a great deal of weight with the State Auditor's Office.

The $30 per day rate was adopted by the Board at its March 14, 2002 Board meeting. The Board had recently reviewed its SDSI status and reasoned at that time that it did not want to appear to be taking advantage of its SDSI status and would therefore follow the standards that most state agencies were required to follow.

The $30 per day rate was established 37 years ago. The staff is suggesting that the Board revisit its policy and consider a per diem rate in accordance with the rate permitted by the Public Accountancy Act.

RECOMMENDATION: Board members be paid compensatory per diem at the rate of $100 per day as provided for in the Public Accountancy Act.

SUGGESTED MOTION: To approve compensatory per diem at the rate of $100 per day as provided for in the Public Accountancy Act.

IV-23

To: William Treacy, Alan Hermanson

From: J. Randel (Jerry) Hill

As requested, I have reviewed what I believe to be the relevant statutes regarding "compensatory per diem" for our Board members. "Compensatory per diem" is the amount of compensation a Board member receives for each day a member conducts board business. This is distinguished from a Board member's "expenses per diem" which includes meals, transportation, lodging and incidental expenses associated with Board business. The relevant statutes appear to be:

• Public Accountancy Act§ 901. 057;

• Texas Government Code§§ 659.032 and 659.033;

• Texas Appropriations Act 86th Texas Legislature-Article IX§ 5.07; and

• Self-Directed Semi-Independent Agency-Chapter 472.051 and 472.102 Texas Government Code.

The Public Accountancy Act states in § 901.057 that a Board member is entitled to receive $100 for each day the member conducts Board business. Although the language is clear the following statutes conflict with this provision in our Act.

Section 659.032 of the Texas Government Code states that a member of a state board is entitled to a per diem set by the General Appropriations Act. Section 659.033 adds that the amount in the General Appropriations Act controls when you have a law that conflicts with the General Appropriations Act. The $100 per diem in the Public Accountancy Act conflicts with the General Appropriations Act which provides $30 per day pursuant to§ 5.07 of the General Appropriations Act.

Section 472.051 of the Texas Government Code, which is this agency's SDSI (SelfDirected Semi-Independent) legislation, provides that the Board is a state agency and subject to state agency laws including four specific statutes that include purchasing, interagency transfer voucher, travel regarding fleet services and aircraft pooling and prompt payment requirements. Absent in the four included categories is the requirement to comply with "compensatory per diem" for Board members. This creates some ambiguity because it says we must comply with all state laws but then includes only four.

The Board made a decision in March of 2002, shortly following the effective date of the SDSI legislation, that it wanted to avoid any appearance of taking advantage of the SDSI status it had received and that it would follow the same reimbursement standards allowed other state agencies. The Board adopted a motion that reimbursement limits for Board and advisory committee members be in accordance with the State of Texas Travel Allowance Guide. The State of Texas Travel Allowance Guide lists "per diem expenses" of $30.00 per day as established in the General Appropriations Act for Fiscal years 2020/2021.

IV-25

From: David Zimmerman [mailto:[email protected]] Sent: Monday, April13, 2020 8:51PM To: Jerry R. Hill Subject: Board Member Per Diem

Dear Mr. Hill:

You asked whether TSBPA board members are entitled to receive a $100 per diem or a $30 per diem.

It appears that an argument can be made that TSBP A board members are entitled to receive a $1 00 per diem.

Here are the relevant provisions:

• Section 901.057(a), Occupations Code, states that a TSBPA "board member is entitled to receive ... $100 for each day that the member conducts board business" as defmed by board rule.

• Section 659.032(a), Government Code, states that "[a] member of a state board is entitled to a per diem in an amount set by the General Appropriations Act for the member's service on the board." Section 659.033, Government Code, states that "[a] law setting the amount ofper diem for members of a state board is suspended to the extent of conflict with this subchapter" ifthe General Appropriations Act (GAA) sets "the amount ofper diem to which the member is entitled." Article IX, Section 5.07(a), ofthe current GAA sets the amount of per diem by providing, "[a]s authorized by Section 659.032, Government Code, the per diem of state board and commission members consists of ... compensatory per diem, if specifically authorized by law, at $30 per day.''

Several Attorney General opinions addressing conflicts between statutes of this type, including JM-954 (1988), JM-888 (1988), JM-426 (1986), JM-382 (1985), and MW-388 (1981). Applying the rationale ofthese opinions to the instant case, Section 901.057 will prevail over Sections 659.032 and 659.033, entitling TSBPA board members to receive a $100.per diem, if Section 901.057 was enacted after Sections 659.032 and 659.033. Ifnot, Sections 659.032 and 659.033 will prevail over Section 90 1. 05.7, entitling TSBP A board members to receive a $3 0 per diem.

Looking at the dates of enactment:

• Article 41a-1, Section 4(e), Vernon's Texas Civil Statutes (later codified as Section 901.057, Occupations Code) became law in 1979. At that time, it stated that a board member "is entitled to ... $SO for each day on which the member attends an official meeting ofthe board or assists in the administration of an examination under this Act." In 1981, the statute was amended to change the amount :fi:om $50 to $100. The last substantial amendment ofthe per diem provision of this statute was made in 1989, when the statute was changed to state that a board member "is entitled to ... $1 00 for each day that the member conducts board business" as defmed by board rule.

IV-26

• Article 6813f, Vernon's Texas Civil Statutes (later codified as Sections 659.032 and 659.033, Government Code) became law in 1981. The last substantial amendment to the per diem provisions ofthese statutes, was made in 1983. Attorney General Opinion No. JM-426 (1986) establishes that 1983 is the date of enactment for the per diem provisions of Article 6813£

So, an argument can be made that the 1989 amendmentto the per diem provision of Article 41 a-1, Section 4(e) (now Section 901.057) was substantial and indicates the legislature's intent to reenact this per diem provision. The per diem provision was included in the bill because it expanded the $100 per diem to cover other board activities that were not previously included and not simply to satisfy the requirements of Article III, Section 36, Texas Constitution (see Section 311.025(c), Government Code). So, Section 901.057 (reenacted in 1989) would prevail over Sections 659.032 and 659.033 (reenacted in 1983), entitling TSBPA board members to receive a $1 00 per diem.

This email represents my analysis ofthis issue and is not intended as formal legal advice. Please review this analysis carefully to determine if you believe it is correct. If you need formal legal advice, I recommend you contact the Attorney General's office.

David

DAVID ZIMMERMAN SENIOR COUNSEL FOR FISCAL AND AGENCY AFFAIRS

TEXAS COMPTROLLER OF PUBLIC ACCOUNTS

111 EAST17THSTREET,SUITE116,AUSTIN, TX 78701

TEL. 512.475.0006

IV-27

Agenda Item IV


May 13,2020

D. Update on office relocation

DISCUSSION: Mr. Treacy, Executive Director, will update the Board on the status of the office relocation.

RECOMMENDATON: None by staff


IV-29

Agenda Item IV


May 13,2020

E. Review of NASBA/AICPA matters:

DISCUSSION: Mr. Cavazos, Presiding Officer, will present the following NASBA/AICPA matters:

• NASBA dates of interest:

a. 38th Executive Directors Conference- March 16-18, 2020- Virtual b. 25th Annual Conference for Board of Accountancy Legal Counsel- March

16-18, 2020- Virtual c. Western Regional Meeting - June 3-4, 2020 - Virtual d. 113th Annual Meeting - November 1-4, 2020



IV-31

From: Sent: To:

Ken L. Bishop <[email protected]> Friday. April 03. 2020 11:15 AM

William Treacy Subject: Important Message: NASBA Regional Meetings

Natio11<11 AssD~•a l i on of S!Jto Bon1ds of Account~ncv Mission Driven - Member Focused

A MESSAGE FROM KEN BISHOP

Dear NASBA Members, Friends & Associates,

We are all adjusting to the "New Normal" and communicating in new ways as many of us work

remotely. Nearly all NASBA employees are working from their homes following the "Safer at

Home" directives in Tennessee, New York and Guam. To do our part to mitigate the spread of

Covid-19 and to take the appropriate actions to safeguard the wellbeing of our conference

attendees, we have decided to move the June Regional Meetings to virtual platforms.

Recently, NASBA hosted the Executive Director & State Society CEO conference, Legal Counsel

Conference, Regional CPA Evolution Updates and Legislative Update on virtual platforms. We are

confident we can provide you with the important information you will need to assist you in your

regulatory role. In addition, the virtual conference platform will allow every single board member

and executive director to attend.

We are creating the agenda and logistics for our virtual Eastern and Western Regional Meetings.

More precise information will be sent out in the coming weeks, but in the interim, we ask that you

save these dates in your calendar.

1

IV-33

SAVE TO CALENDAR

Western Regional June 3-4

SAVE TO CALENDAR

Eastern Regional June 10-11

Thank you for your understanding and patience during this extraordinary time. We hope you are

safe and healthy, and we look forward to "seeing" you at one of our Regional Meetings!

Sincerely,

Ken L. Bishop

President & CEO

NASBA 1150 Fourth AvenueNorth I SUite 700 I Nashvrlle . TN 1372 19-2417 Phone 615-880-4200 1 Websrte ·' ., 'n.o:i_ o >:· rn

Manage vo ur IJII:·i.'· re rrc:r-·::; 1 Opt out •d11(J ·: . · ·- •i• ·· ··· ' ·"-') <: ; , _, ;Uri :.:-,~-~:·, ion·\'i'l rci 'l Sign up in re<.E' I"t ·· t• rll · ittl tr re c:1n.:1 il '<. Ii i ·~, ,.,, i h i:, '':rrKl il online.

i '_i ll f\l llr ih /-\venue- f\lr,l i. lr ~; lri i l" lOti 1 ' 1 .~,·- h"ill t- · . Ti" ! .:: U I ~:1 111 ,j;,, ,l ~-: ;,_, ;,,~,

!lJi :_ , l::' !fl ~ilf \r1fi.:l'j ~- ; ;-; I ' Ji \(J \r\l if l -l ~j l_:\1(! ;! i: . .; IJp ~i [L:•\;: !;·~.~." 10 \1

"fp C«1u iinue receiviun nu1 ~-= · J, ~;- .· il.o.::. ddt/u~ . ftl \runr (-:! 1_ /c l r,~ .. ss IH_,u/c

IV-34

Agenda Item IV


May 13, 2020

F. Review of general correspondence

DISCUSSION: Mr. Cavazos, Presiding Officer, will review general correspondence coming to the Board's attention.



IV-35

William Treacy

From: Sent: To: Cc: Subject:

Brie Allen <[email protected]> Tuesday, March 31, 2020 1:33 PM Daniel L. Weaver William Treacy Re: (External) RE: COVID-19 State Board Legal Resources

Thank you for the heads up, Dan. I will fix that immediately. The Texas resources will be helpful for other boards; the TSBPA had such a thorough and quick response.

Thank you,

Brie

Brie Allen, Esq. Regulatory Counsel CIPP/US & C/PP/E

National Association of State Boards of Accountancy (NASBA) 150 4th Ave North, Suite 700 Nashville, TN 37219

Phone: 919-345-7231 Email: [email protected]·

www.nasba.org

NOTICE: This email message and all attachments transmitted with it may contain legally privileged and confidential information intended solely for the use of the addressee. If the reader of this message is not the intended recipient, you are hereby notified that any reading, dissemination, distribution, copying, or other use of this message or its attachments is strictly prohibited. If you have received this message in error, please notify the sender immediately by telephone (919-345-7231}, and delete this message and all copies and backups thereof. Thank you.

From: Daniel L. Weaver <[email protected]> Sent: Tuesday, March 31, 2020 2:07 PM To: Brie.AIIen <[email protected]> Cc: [email protected] <[email protected]> Subject: (External) RE: COVID-19 State Board Legal Resources

• I I '' This email was sent to NASBA from an external source. Please be extra vigilant when opening attachments or clicking links.

Hi Brie, rhe Texas links imbedded in t he lega l resources art icle are linked to our old web add ress t hat is no longer funct ional.

1

IV-37

William Treacy

From: VerColen,Kacy (HHSC) [mailto:[email protected]] Sent: Friday, March 27, 2020 1:54PM To: Daniel L. Weaver; April Marie Serrano Cc: Maggie Brys Subject: RE: Licensing Payment question

All , I really appreciate your working with me. I have also been working with my agency and I think I am going to make them change their ways. I have multiple employees who are CPA and I do not want you to j ump through hoops every time one of my staff need a renewal.

So, we will not contact Maggie to make payment. You have been awesome to work with and I hope you all stay safe and healthy during this trying t imes.

Have an excellent weekend. Kacy

Kacy J. VerColen, CPA

Interim Assistant Deputy Inspector General Inspector General - Texas Hea lt h and Human Services Commission

www. ReportT exasFraud.com 11501 Burnet Rd., Bldg. 902 I Austin, TX 78758 I M C: 1310 I Office 527 512-491-2872

Best regards,

Bill Will iam Treacy Executive Director Texas State Board of Public Accountancy

512-305-7801 wtreacy@tsbpa. texas.gov

1

IV-38

Donna Hiller

From: Sent: To: SubjeCt: Attachments:

Tuesday, April 21; 2020 3:10 PM Donna Hiller TSBPA 5th Year Scholarship - Thank You 5th Yr Scholarship - TV Letter.pdf

Good Afternoon Ms. Donna Hiller,

I have attached a "Than1( You" letter within this email to express my gratitude in being a recipient ofthe TSBPA 5th Year Scholarship.

As I near the preparation for the CPA exam, this award serves as extra motivation to continue to strive towards my goals! I can guarantee you that this blessing will not go unnoticed.

Best Regards,

1

IV-39

April 21st, 2020

Donna Hiller Director of Qualifications Texas State Board of Public Accountancy 333 Guadalupe, Tower 3, Suite 900 Austin, TX 78701-3900

Dear Ms. Donna Hiller,

I wanted to thank you for awarding me the TSBPA 5th Year Scholarship. Telling you that I was excited to receive the news would be a huge understatement, as I am extremely grateful to receive this award.

My first semester at the University of Houston was in Spring 2017 as a CAP student. At the time, I felt really out of place because I was a Detention Officer with a Kinesiology degree and no accounting background whatsoever. I continuously asked myself if I was making the right decision. The top-quality education that I have received from this department since then has given me the confidence and skills to not only land multiple internships, but a full time offer as well. As an aspired future CPA, the education offered from Bauer's devoted professors is extremely important to my success. It is because of you that I can now focus at ease and continue learning from this program's prestigious professors as I get one step closer to my CPA.

I am currently in my last semester taking on 10.5 hours and working the midnight shift at UPS to help make ends meet. This scholarship will definitely lighten that financial burden and allow me the opportunity to invest more time into the CPA. I thank you for this award and I hope to one day multiply this blessing and help other students reach their goals as you have helped me.

Sincerely,

IV-40

Agenda Item IV


May 13, 2020

G. Proposed Annual Evaluation of the Executive Director

DISCUSSION: Mr. Cavazos, Presiding Officer, will discuss the upcoming annual evaluation of the Executive Director.



IV-41

Agenda Item V Rules Committee Agenda

March 11, 2020 1:30 p.m.

• Discussion, consideration and possible action on a proposed revision to Board Rule 511.57 (Qualified Accounting Courses) to eliminate the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA exam and to extend the emergency rulemaking for an additional 60 days which eliminated the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA exam.

V-1

Agenda Item V Rules Committee Agenda

March 11, 2020 1:30 p.m.

• Discussion, consideration and possible action on a proposed revision to Board Rule 511.57 (Qualified Accounting Courses) to eliminate the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA exam and to extend the emergency rulemaking for an additional 60 days which eliminated the requirement of 15 classroom hours of advanced accounting courses to qualify to take the CPA exam.

DISCUSSION: At the March Rules committee meeting, the committee discussed the recommendation of the Qualifications Committee to eliminate the requirement for 15 classroom hours of advanced accounting courses in order to qualify to take the CPA exam. The committee concurred with the Qualifications Committee recommendation and determined to first address the immediate need for a rulemaking in the form of an emergency adoption of a rule to eliminate the 15 hours of classroom courses requirement.

Since the emergency rulemaking is good, by statute, for only 120 days and because the committee has not been able to meet since the March meeting because of the COVID-19 "stay home" directive, the Rules Committee Chair has asked to individually present two proposals. The first proposal would adopt the substance of the emergency rulemaking. The committee chair is recommending that the Board propose for publication in the Texas Register a request for public comment on the proposal to revise Board Rule 511.57 to eliminate the 15 classroom hour requirement.

• The second proposal would extend the emergency rulemaking for an additional 60 days which eliminated the 15 classroom hour requirement. The 60 day extension is necessary because the 120 day emergency rulemaking expires on July 10, 2020. Assuming the Board adopts the rule revision at the July 16, 2020 Board meeting, the rule will not take effect until 20 days after it has been filed with the Texas Register. Therefore the rule revision will become effective August 5, 2020 at the earliest. The 60 day extension will retain the effect of the emergency rule until the non-emergency rule becomes effective.

RECOMMENDATION: The Rules Committee Chair recommends to the Board that the proposed rule amendment be published in the Texas Register for public comment and the Board extend the effect of the emergency rulemaking for an additional 50 days or until Rule 511.57 is effectively revised to eliminate the 15 classroom hour requirement.

SUGGESTED MOTION: That the Board authorizes the Executive Director to have the proposed rule amendment published in the Texas Registerfor public comment and to extend the emergency rulemaking for 60 days or until the proposed revision to Rule 511.57 is effectively revised to eliminate the 15 classroom hour requirement.

V-3

1 2 3 4 5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

CHAPTER 511 SUBCHAPTER C RULE §511.57

ELIGIBILITY EDUCATIONAL REQUIREMENTS Qualified Accounting Courses ---------__ ,. ________________ _ ---------------· -·---

(a) An applicant shall meet the board's accounting course requirements in one of the

following ways:

(1) Hold a baccalaureate or higher degree from a board-r~cognized institution of higher

education as defined by §511.52 of this title (relating to Recognized Institutions of

Higher Education) and present valid transcript(s) from board-recognized institution(s)

that show degree credit for no fewer than 30 semester credit hours of upper division

accounting courses as defined in subsection (e) of this section; or

(2) Hold a baccalaureate or higher degree from a board-recognized institution of higher

education as defined by §511.52 of this title, and after obtaining the degree, complete

the requisite 30 semester credit hours of upper division accounting courses, as defined

in subsection (e) of this section, from four-year degree granting institutions, or

accredited community colleges, provided that all such institutions are recognized by the

board as defined by §511.52 of this title, and that the accounting programs offered at

the community colleges are reviewed and accepted by the board.

(b) Credit for hours taken at board-recognized institutions of higher education using the

quarter system shall be counted as 2/3 of a semester credit hour for each hour of credit

received under the quarter system.

(c) The board will accept no fewer than 30 semester credit hours of accounting courses

from the courses listed in subsection (e)(1)- (14) of this section. The hours from a

course that has been repeated will be counted only once toward the required 30

semester hours. The courses must meet the board's standards by containing sufficient

business knowledge and application to be useful to candidates taking the UCPAE. A

board-recognized institution of higher education must have accepted the courses for

purposes of obtaining a baccalaureate degree or its equivalent, and they must be

shown on an official transcript. At least 15 of these hours must result from physical

attendance at classes meeting regularly on the campus of the transcript issuing

institution.

(d) A non-traditionally-delivered course meeting the requirements of this section must

have been reviewed and approved through a formal, institutional faculty review process

V-4

1 that evaluates the course and its learning outcomes and determines that the course

2 does, in fact, have equivalent learning outcomes to an equivalent, traditionally delivered

3 course.

4 (e) The subject-matter content should be derived from the UCPAE Content

5 Specifications Outline and cover some or all of the following:

6 (1) financial accounting and reporting for business organizations that may include:

7 (A) up to nine semester credit hours of intermediate accounting;

8 (B) advanced accounting;

9 (C) accounting theory;

10 (2) managerial or cost accounting (excluding introductory level courses);

11 (3) auditing and attestation services;

12 (4) internal accounting control and risk assessment;

13 (5) financial statement analysis;

14 (6) accounting research and analysis;

15 (7) up to 12 semester credit hours of taxation (including tax research and analysis);

16 (8) financial accounting and reporting for governmental and/or other nonprofit entities;

17 (9) up to 12 semester credit hours of accounting information systems, including

18 management information systems ("MIS"), provided the MIS courses are listed or cross-

19 listed as accounting courses, and the institution of higher education accepts these

20 courses as satisfying the accounting course requirements for graduation with a degree

21 in accounting;

22 (1 0) up to 12 semester credit hours of accounting data analytics, provided the

23 institution of higher education accepts these courses as satisfying the accounting

24 course requirements for graduation with a degree in accounting (while data analytics

25 tools may be taught in the courses, application of the tools should be the primary

26 objective of the courses);

27 (11) fraud examination;

28 (12) international accounting and financial reporting;

29 (13) an accounting internship program (not to exceed 3 semester credit hours) which

30 meets the following requirements:

31 (A) the accounting knowledge gained is equal to or greater than the knowledge

32 gained in a traditional accounting classroom setting;

V-5

1 (B) the employing firm provides the faculty coordinator and the student with the

2 objectives to be met during the internship;

3 (C) the internship plan is approved in advance by the faculty coordinator;

4 (D) the employing firm provides significant accounting work experience with adequate

5 training and supervision of the work performed by the student;

6 (E) the employing firm provides an evaluation of the student at the conclusion of the

7 internship, provides a letter describing the duties performed and the supervision to the

8 student, and provides a copy of the documentation to the faculty coordinator and the

9 student;

10 (F) the stud~nt keeps a diary comprising a chronological list of all work experience

11 gained in the internship;

12 (G) the student writes a paper demonstrating the knowledge gained in the internship;

13 (H) the student and/or faculty coordinator provides evidence of all items upon request

14 by the board;

15 (I) the internship course shall not be taken until a minimum of 12 semester credit

16 hours of upper division accounting course work has been completed; and

17 (J) the internship course shall be the equivalent of a traditional course; and

18 (14) at its discretion, the board may accept up to three semester hours of credit of

19 accounting course work with substantial merit in the context of a career in public

20 accounting, provided the course work is predominantly accounting or auditing in nature

21 but not included in paragraphs (1)- (12) ofthis subsection. For any course submitted

22 under this provision, the Accounting Faculty Head or Chair must affirm to the board in

23 writing the course's merit and content.

24 (f) The board requires that a minimum of two semester credit hours in research and

25 analysis relevant to the course content described in subsection (e)(6) or (7) of this

26 section be completed. The semester credit hours may be obtained through a discrete

27 course or offered through an integrated approach. If the course content is offered

28 through integration, the institution of higher education must advise the board of the

29 course(s) that contain the research and analysis content.

30 (g) The following types of introductory courses do not meet the accounting course

31 definition in subsection (e) of this section:

32 (1) elementary accounting;

V-6

1 (2) principles of accounting;

2 (3) financial and managerial accounting;

3 (4) introductory accounting courses; and

4 (5) accounting software courses.

5 (h) Any CPA review course offered by an institution of higher education or a proprietary

6 organization shall not be used to meet the accounting course definition.

7 (i) CPE courses shall not be used to meet the accounting course definition.

8 U) An ethics course required in §511.58(c) of this chapter (relating to Definitions of

9 Related Business Subjects and Ethics Courses) shall not be used to meet the

10 accounting course definition in subsection (e) of this section.

11 (k) Accounting courses completed through an extension school of a board recognized

12 educational institution may be accepted by the board provided that the courses are

13 accepted for a business baccalaureate or higher degree conferred by that educational

14 institution.

V-7

Agenda Item VI

Report on Licensing Department Programs

May 14, 2020

A. Update on fingerprinting progress B. Report on the Unauthorized Practice of Public Accounting

Vl-1

Agenda Item VI


May 14,2020

A. Update on fingerprinting progress

Board staff will provide an update on the ongoing fingerprinting process.

Licensee fingerprint progress through 04/26/2020

no hits hits rejected prints total

hit/total prints reject/

resolved with FBI input rejected total ...

FY2020 20,989 1,626 365 22,980 7.08% 1,067 4.51%

Oct-19 2,758 215 24 2,997 7.17% 91 2.97%

Nov-19 4,990 347 95 5,432 6.39% 289 5.14%

Dec-19 4,265 325 105 4,695 7.08% 264 5.44%

Jan-20 3,760 288 52 4,100 7.11% 178 4.21%

Feb-20 2,917 257 62 3,236 8.10% 159 4.77%

Mar-20 1,797 148 22 1,967 7.61% 68 3.38%

Apr-20 502 46 5 553 4.88% 18 3.18%

1) All firms with registered non-CPA owners have been given instructions to complete the process.

2) Texas CPAs residing internationally have been given instructions and hard cards to complete.

3) Licensee fingerprint status is noted on the banner of the Licensee online menu:

As of today (04/26/2020) your Fingerprint Status is: Fingerprinting complete! Thank you. or,

As of today (04/26/2020) your legislatively mandated CPA License Fingerprint Status is: Need to be fingerprinted.

4) Instructions are provided to each licensee through the online services menu.

Vl-3

80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

Fingerprints completed by renewal month as of:

• 4/26/2020

Includes licensees that are currently issued or recently expired (since 01/01/2018), but excludes retired, disabled and licensees with fingerprint records after 09/01/2014.

-55,000 to be printed

Vl-4

Agenda Item VI


May 14, 2020

B. Report on the Unauthorized Practice of Public Accountancy

BOARD REPORTING PERIOD March 1, 2020 THROUGH April 30, 2020

OPEN FILES AT START 210

NEW FILES OPENED 36

TOTAL UPPA FILES 246

UPPA FILES CLOSED 29

OPEN FILES AT END 217

FILES CURRENTLY REFERRED TO 6 ATTORNEY GENERAL

UPPA CLOSED FILES:

VOLUNTARY COMPLIANCE 28

AGREED CONSENT ORDERS 0

FILES REFERRED TO BEHAVIORAL 0 ENFORCEMENT COMMITTEE

FILES PREVIOUSLY REFERRED TO 1 ATTORNEY GENERAL

OTHER 0

TOTAL 29

Vl-5

Agenda Item VII

Behavioral Enforcement Committee Meeting

April 23, 2019 The Behavioral Enforcement Committee met on Tuesday, April 23, 2019, at the Board offices beginning at 9:15a.m.

Members Present Ben Pena, CFE, CPA

Members Absent Karen Jones, CPA Steve Pena, CPA

Staff Present J. Randel Hill, Esq. Paulette Beiter, Esq. Committee Chair

Donna J. Hugly, CPA James D. Ingram IV, CPA Debra Sharp Bennett Allison, CPA Patrick Durio, CPA John Pearce, Esq., CPA

• AFTER GIVING THESE MATTERS DUE CONSIDERATION, THE COMMITTEE RECOMMENDS THESE MATTERS BE DISMISSED BASED UPON VOLUNTARY COMPLIANCE OF A VIOLATION OF THE ACT OR THE RULES:

1. Investigation No.18-12-05L: Respondent allegedly failed to make second quarter tax payments on time and failed to complete the bookkeeping for the part of the year for which he had been paid. In addition he allegedly advised a client to mislead a mortgage company. (Board approval required)

2. Investigation Nos. 18-11-09L & 18-11-1 OL: Respondent allegedly failed to complete all the returns he was engaged to prepare in a timely manner and made spelling errors in a return and left off expenses in a return. (Board approval required)

Vll-1

Agenda Item VII

Behavioral Enforcement Committee Meeting

April 22, 2020 The Behavioral Enforcement Committee met on Wednesday April 22, 2020 by conference call beginning at 9:15 a.m.

Members Present Ben Pella, CFE, CPA

Committee Chair James D. Ingram, IV, CPA Kevin J. Koch, CPA Debra Sharp Bennett Allison, CPA Patrick Durio, CPA Karen Jones, CPA

Member Absent John Pearce, CPA

Staff Present Paulette Beiter, Esq. J. Randel Hill, Esq. John Moore, Esq.

A. AFTER GIVING THESE MATTERS DUE CONSIDERATION, THE COMMITTEE RECOMMENDS THESE MATTERS BE DISMISSED BASED UPON INSUFFICIENT EVIDENCE OF A VIOLATION OF THE ACTOR THE RULES:

1. Investigation Nos. 20-02-0GL & 20-02-07L: Respondent allegedly failed to contact the IRS on behalf of the client and mislead the client regarding her interactions with the IRS on the client's behalf. (Board approval required)

2. Investigation Nos. 20-01-1 OL & 20-01-11 L: Respondents allegedly failed to request an extension for a client who was being audited by the IRS. (Board approval required)

3. Investigation Nos. 20-03-01 L & 20-03-02L: Respondents allegedly failed to document the transfer of interest in an oil and gas producing property from an entity to her client. 1 (Board approval required)

4. Investigation Nos. 20-02-09L & 20-02-1 OL: Respondents allegedly sent confidential information to unauthorized individuals. (Board approval required)

5. Investigation Nos. 20-01-07L, 20-01-0SL & 20-01-09L: Respondents allegedly failed to file an extension for a client's 2018 tax return resulting in penalties being assessed against complainant. (Board approval required)

1 Mr. Allison recused himself from participating in this matter.

Vll-3

B. AFTER GIVING THESE MATTERS DUE CONSIDERATION, THE COMMITTEE RECOMMENDS THESE MATTERS BE DISMISSED BASED UPON VOLUNTARY COMPLIANCE WITH THE ACT AND THE RULES:

1. Investigation No. 20-01-24L: Respondent allegedly refused to return financial documents to a client. (Board approval required)

2. Investigation Nos. 19-09-03L & 19-09-04L: Respondent allegedly failed to file a return, failed to respond to a client's inquiries and failed to return client documents. (Board approval required)

3. Investigation Nos. 19-1 0-06L & 19-1 0-07L: Respondents allegedly failed to include 1 099s on a return, failed to respond to a client's inquiries and is practicing with an expired license. (Board approval required)

C. OTHER: The Committee considered 10 other matters during its meeting; however, these matters do not require Board action at this time.

D. NEXT MEETING: The next Behavioral Enforcement Committee meeting was scheduled for August 5, 2020 at 9:15a.m.

Vll-4

Agenda Item VIII

Peer Assistance Oversight Committee

The Peer Assistance Oversight Committee monitors and oversees the peer assistance program, the TSCPA's Accountants Confidential Assistance Network (ACAN). Included is an overview of the program and an update regarding recent activities.

The Committee meets as needed. There is no scheduled meeting at this time.

Vlll-1

Peer Assistance Purpose

The board has established the Peer Assistance Oversight Committee to oversee the activities of TSCPA's peer assistance program as mandated under the Texas Health and Safety Code, Chapter 467. The Peer Assistance Oversight Committee's responsibilities include, but are not limited to:

1) Protecting the public from CPAs whose ethical, behavioral, and technical violations due to chemical dependency on drugs or alcohol and/or mental health issues have harmed, or have the potential to harm, the public;

2) Encouraging CPAs, CPA applicants, and accounting students to seek assistance for impairment due to chemical dependency on drugs or alcohol and/or mental health issues;

3) Cooperating with the TSCPA's peer assistance program in promoting confidential assistance to CPAs, CPA applicants, and accounting students who suffer from chemical dependency on drugs or alcohol and/or mental health issues; and ·

4) Disseminating information about the peer assistance program to CPAs, CPA applicants, and accounting students.

Peer Assistance Activities September 1, 2019 - February 29, 2020

)> REFERRALS:

7 CPAs and 10 CPA Candidates were referred to ACAN for a consultation.

)> CONSENT ORDERS:

o 12 CPAs and 26 CPA Candidates were mentored by ACAN under a consent order

o 9 CPAs and 9 CPA Candidates signed consent orders during the reporting period

o 1 CPA and 5 CPA Candidates were successfully released from multiyear consent order

)> ADDITIONAL ACTIVITIES:

o 32 CPAs sent information letter after reporting their first DWI or similar offense

Vlll-2

o 21 CPA Candidates were asked to sign a pledge not to drink until licensed

o 26 individuals called ACAN seeking information and/or assistance through the confidential toll-free phone line monitored seven days a week.

o Support groups convened weekly in Dallas and Houston; monthly in Austin and San Antonio. A virtual meeting convened every Tuesday and Thursday attended by individuals who were travelling or live too far removed from a group site. In March all meetings were moved to a virtual format.

o 6 CPAs received mentor training on facilitating ACAN consultations, interventions, and supporting persons in recovery. There are currently 31 ACAN Volunteers

o Program promotion was carried out at CPE conferences, to residential recovery centers and individual therapists, and via print and electronic advertisements.

o Board Rule 523.13(b)(3) requires ethics course educators to provide information about peer assistance

o ACAN produced informational presentations and case studies and made them available to ethics course providers

TXCPA Peer Assistance. Program

Financial Information

For the Quarter ending February 29, 2020

For the Three Months Ended

YTD Summary of Expenses 11/30/l9 2/29/20 Total

Personnel Network Training Meeting Meetings and Travel

Other TOTALS

$ 28,385 17,798

471 290

$46,944

Vlll-3

$ 26,189 885 610 150

$27,834

$54,574 18,683 1,081

440 $74,778

TXCPA Peer Assistance Program Quarterly Report

For the Three Months Ended February 29, 2020

SUMMARY OF ACTIVITIES

1. TSBPA referrals to ACAN

Seven CPA candidates and six licensees were referred to ACAN this quarter to be interviewed by program mentors and introduced to the ACAN support group meetings.

2. ACO Mentoring

ACAN volunteers provided mentoring services for 40 individuals under an Agreed Consent

Order this quarter. Mentors provided guidance, received attendance records, and produced quarterly reports. During the quarter two candidates and one licensee successfully completed their Agreed Consent Order. Also, during the quarter one candidate left the program to pursue a different profession.

3. ACAN program mentors

One volunteer in Fort Worth and one in Houston were equipped to serve as mentors this quarter. Two additional mentors have been identified and will be added to our mentor portfolio as soon as the next quarter.

4. ACAN support group meetings ACAN meetings were convened weekly in Dallas and Houston, and monthly in Austin and San

Antonio this quarter. Weekly virtual meetings were conducted every Tuesday and Thursday evening. All meetings were regularly attended by CPAs as well as candidates and licensees referred to the ACAN program by TSBPA. Beginning March 20 all ACAN support group meetings were moved to the virtual format through April 30th.

5. Confidential phone line TXCPA hosted the confidential toll-free phone line on behalf of the ACAN program to provide

CPAs safe and prompt access to information and assistance. The phone line was monitored seven days a week to ensure responsive assistance was provided. The ACAN Director fielded calls from candidates questioning the consequences of past arrests, from CPA professionals seeking counseling, and from candidates referred to ACAN by TSBPA. ACAN did experience an increase in calls this quarter from licensees impacted by the fingerprint requirements.

6. Program Promotion

Promoting awareness of ACAN was pursued in three main areas: A. Print advertisements. ACAN placed program information in Today's CPA magazine,

VIEWpoint newsletter, and in TXCPA chapter newsletters. B. Website. The TXCPA managed an ACAN program section on their website. C. TXCPA CPE Events. ACAN information was presented during CPE events in Dallas and in

San Antonio.

Vlll-4

TXCPA Peer Assistance Program

Performance Measures

As Outlined in TSBPA contract

Attachment A For the Three Months Ended February 29, 2020

1. TSBPA Referrals -7 candidates, 6 licensees, 16 candidates (pledge letters} 2. Other Contacts- 18 3. Number of persons receiving services- 49 4. TSBPA Exam Candidates referrals receiving services- 36 5. TSBPA Licensees receiving services- 13

6. Number of persons completing the ACAN Monitoring/Mentoring Program- 4

7. Number of ACAN Volunteers- 31

Summary of Expenses

Personnel

Network Training Meeting

Meetings and Travel Other

TOTALS

TXCPA Peer Assistance Program

Financial Information

For the Quarter ending February 29, 2020

For the Three Months Ended

11/30/19 2/29/20

$ 28,385 $ 26,189 17,798 885

471 610 290 150

$46,944 $ 27,834

Vlll-5

YTD

Total

$ 54,574 18,683 1,081

440 $74,778

AGENDA ITEM IX

PROBATION & LIMITED SCOPE REPORT

MAY 14, 2020

STATUS DOCKET BOARD REPORTING PERIOD FEBRUARY 14, 2020 THROUGH APRIL 17, 2020

OPEN CASES AT START: NEW CASES OPENED:

CASES CLOSED: OPEN CASES AT END:

• PROBATION STATUS

PROBATION 9 2 0

11

At present, the Enforcement Division is monitoring:

1. Probation Files: 11

2. Limited Scope Files: 72

IX-1

LIMITED SCOPE 71 1 0

72

Agenda Item X

Consideration of Agreed Consent Orders, Administrative Disciplinary Actions & Proposal for Decision

May 14, 2020

A. AGREED CONSENT ORDERS


1. Investigation No. 19-1 0-05L 2. Investigation No. 19-11-06L


1. Investigation No. 19-11-03L 2. Investigation Nos. 19-09-20L and 19-09-21 L 3. Investigation No. 19-08-11 L

B. ADMINISTRATIVE DISCIPLINARY ACTIONS

1. Investigation Nos.19-12-10001 -19-12-10055 2. Investigation Nos. 20-01-10001-20-01-10052 3. Investigation Nos. 19-12-10056- 19-12-10227 4. Investigation Nos. 20-01-10053- 20-01-10202 5. Investigation Nos. 19-12-10228- 19-12-10251 6. Investigation Nos. 20-01-10203- 20-01-10234

C. PROPOSAL FOR DECISION

• Investigation Nos. 19-07-08L, 19-07-12L, 19-07-13L, 19-07-14L, 19-08-07L and 19-08-0SL

X-1

Agenda Item XI

Consideration of Adoption of Proposed Board Rules (Second Reading)

May 14,2020

DISCUSSION: The rules listed below were proposed for amendment on first reading at the March 12, 2020, Board meeting.

RECOMMENDATION: The staff recommends that the proposed rules be adopted as presented on second reading.

SUGGESTED MOTION: That the proposed rules listed below be adopted as presented on second reading.

1. Rule 501.51 Preamble and General Principles 2. Rule 501.52 Definitions 3. Rule 501.73 Integrity and Objectivity 4. Rule 501.75 Confidential Client Communications 5. Rule 501.76 Records and Work Papers 6. Rule 501.77 Acting through Others 7. Rule 501. 78 Withdrawal or Resignation 8. Rule 501.80 Practice of Public Accountancy 9. Rule 501.81 Firm License Requirements 10. Rule 501.82 Advertising 11. Rule 501.83 Firm Names 12. Rule 501.85 Complaint Notice 13. Rule 501.90 Discreditable Acts

§501.51.Preamble and General Principles.

(a) These rules of professional conduct were promulgated under the Public Accountancy Act, which directs the Texas State Board of Public Accountancy to promulgate rules of professional conduct "in order to establish and maintain high standards of competence and integrity in the practice of public accountancy and to ensure that the conduct and competitive practices of licensees serve the purposes of the Act and the best interest of the public."

(b) The services usually and customarily performed by those in the public, industry, or government practice of accountancy involve a high degree of skill, education, trust, and experience which are professional in scope and nature. The use of professional designations carries an implication of possession of the competence associated with a profession. The public, in general, and the business community, in particular, rely on this professional competence by placing confidence in reports and other services of accountants. The public's reliance, in turn, imposes obligations on persons utilizing professional designations to their clients, employers and to the public in general. These obligations include maintaining independence in fact and in appearance, while in the client practice of public accountancy, continuously improving professional skills, observing GAAP and GAAS, when required, promoting sound and informative financial reporting, holding the affairs of clients and employers in confidence, upholding the standards of the public accountancy profession, and maintaining high standards of personal and professional conduct in all matters.

(c) The board has an underlying duty to the public to ensure that these obligations are met in order to achieve and maintain a vigorous profession capable of attracting the bright minds essential to adequately serving the public interest.

(d) These rules recognize the First Amendment rights of the general public as well as licensees and do not restrict the availability of accounting services. However, public accountancy, like other professional services, cannot be commercially exploited without the public being harmed. While information as to the availability of accounting services and qualifications of licensees is desirable, such information should not be transmitted to the public in a misleading fashion.

(e) The rules are intended to have application to all kinds of professional services performed in the practice of public accountancy, including services found at §501.52(22) of this chapter (relating to Definitions). relating to:

(1) accounting, auditing and other assurance services,

(2) taxation,

(3) financial advisory services,

(4) litigation support,

(5) internal auditing,

Xl-3

(6) forensic accounting, and

(7) management advice and consultation.

(f) Finally, these rules also recognize the duty of certified public accountants to refrain from committing acts discreditable to the profession. These acts, whether or not related to the accountant's practice, impact negatively upon the public's trust in the profession.

(g) In the interpretation and enforcement of these rules, the board may consider relevant interpretations, rulings, and opinions issued by the boards of other jurisdictions and appropriate committees of professional organizations, but will not be bound thereby.

Xl-4

§501.52.Definitions.

The following words and terms, when used in title 22, part 22 of the Texas Administrative Code relating to the Texas State Board of Public Accountancy, shall have the following meanings, unless the context clearly indicates otherwise. The masculine shall be construed to include the feminine or neuter and vice versa, and the singular shall be construed to include the plural and vice versa.

(1) "Act" means the Public Accountancy Act, Chapter 901, Occupations Code;

(2) "Advertisement" means a message which is transmitted to persons by, or at the direction of, a person and which has reference to the availability of the person to perform Professional Accounting Services;

(3) "Affiliated entity" means an entity controlling or being controlled by or under common control with another entity, directly or indirectly, through one or more intermediaries;

(4) "Attest Service" means:

(A) an audit or other engagement required by the board to be performed in accordance with the auditing standards adopted by the AICPA, PCAOB, or another national or international accountancy organization recognized by the board;

(B) a review or compilation required by the board to be performed in accordance with standards for accounting and review services adopted by the AICPA or another national or international accountancy organization recognized by the board;

(C) an engagement required by the board to be performed in accordance with standards for attestation engagements adopted by the AI CPA or another national or international accountancy organization recognized ·by the board; or

(D) any other assurance service required by the board to be performed in accordance with professional standards adopted by the AI CPA or another national or international accountancy organization recognized by the board;

(5) "Board" means the Texas State Board of Public Accountancy;

(6) "Charitable Organization" means an organization which has been granted taxexempt status under the Internal Revenue Code of 1986, §501 (c), as amended;

(7) "Client" means a party who enters into an agreement with a license holder or a license holder's employer to receive a professional accounting service or professional accounting work;

(8) "Client Practice of Public Accountancy" is the offer to perform or the performance by a person for a client or a potential client of professional accounting services or professional accounting work, and also includes:

Xl-5

(A) the advice or recommendations in connection with the sale or offer for sale of products (including the design and implementation of computer software), when the advice or recommendations routinely require or imply the possession of accounting or auditing skills or expert knowledge in auditing or accounting; and

(B) the performance of litigation support services;

(9) "Commission" means compensation for recommending or referring any product or service to be supplied by another party;

(1 0) "Contingent fee" means a fee for any service where no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service. However, a person's nonContingent fees may vary depending, for example, on the complexity of the services rendered. Fees are not contingent if they are fixed by courts or governmental entities acting in a judicial or regulatory capacity, or in tax matters if determined based on the results of judicial proceedings or the findings of governmental agencies acting in a judicial or regulatory capacity, or if there is a reasonable expectation of substantive review by a taxing authority;

(11) "Financial Statements" means a presentation of financial data, including accompanying notes, derived from accounting records and intended to communicate an entity's economic resources or obligations at a point in time, or the changes therein for a period of time, in accordance with generally accepted accounting principles or other comprehensive basis of accounting. Incidental financial data to support recommendations to a client or in documents for which the reporting is governed by Statements on 9f Standards for Attestation Engagements and tax returns and supporting schedules do not constitute financial statements for the purposes of this definition;

(12) "Firm" means a sole proprietorship, partnership, limited liability partnership, limited liability company, corporation or other legally recognized business entity engaged in the practice of public accountancy;

(13) "Good standing" means compliance by a licensee with the board's licensing rules, inclwding the mandatory continuing education requirements, Peer Review, and payment of the annual license fee, and any penalties and other costs attached thereto. In the case of board-imposed disciplinary or administrative sanctions, the person must be in compliance with all the provisions of the board order to be considered in good standing;

(14) "Licensee" means the holder of a license issued by the board to a person pursuant to the Act, or pursuant to provisions of a prior Act;

(15) "Out of state practitioner and out of state firm" means a person licensed in another jurisdiction practicing in Texas pursuant to a practice privilege as provided for in §901.461 and §901.462 of the Act (relating to Practice by Certain Out-of-State Firms and Practice by Out-of-State Practitioner with Substantially Equivalent Qualifications);

Xl-6

(16) "Peer Review/' reviev/', "Quality Review" or "Compliance Assurance" means the study, appraisal, or review of the professional accounting work of a public accountancy firm that performs attest services by a certificate holder who is not affiliated with the firm;

(17) "Person" means an individual, sole proprietorship, partnership, limited liability partnership, limited liability company, corporation or other legally recognized business entity that provides or offers to provide professional accounting services or professional accounting work as defined in paragraph (22) of this section;

(18) "Principal office" means the location specified by the client as the address to which a service described in §517.1 (a)(2) of this title (relating to Practice by Certain Out of State Firms) is directed and is synonymous with Home Office where it appears in the Act;

(19) "Practice unit" means an office of a firm required to be licensed with the board for the purpose of the client practice of public accountancy;

(20) "Practice privilege" means the privilege for an out-of-state person to provide certain Professional Accounting Services or Professional Accounting Work in Texas to the extent permitted under Chapter 517 of this title (relating to Practice by Certain Out of State Firms and Individuals);

(21) "Preparation engagement" means the preparation of financial statements that do not include an audit, review or a compilation report on those financial statements in accordance with Standards for Accounting and Review Services adopted by the AICPA;

(22) "Professional Accounting Services" or "professional accounting work" means services or work that requires the specialized knowledge or skills associated with certified public accountants, including but not limited to:

(A) issuing reports on financial statement(s);

(B) preparation engagements pursuant to SSARS;

(C) providing management or financial advisory or consulting services;

(D) preparing tax returns;

(E) providing advice in tax matters;

(F) providing forensic accounting services; a-00

(G) providing internal auditing services~ -c

(H) accounting, auditing and other assurance services;

(I) providing litigation support services; and

Xl-7

(J) recommending the sale of a product if the recommendation requires or implies accounting or auditing skills.

(23) "Report" means an opinion, report, or other document, prepared in connection with an attest service that states or implies assurance as to the reliability of financial statement(s); and includes or is accompanied by a statement or implication that the person issuing the opinion, report, or other document has special knowledge or competence in accounting or auditing. A statement or implication of assurance as to the reliability of a financial statement or as to the special knowledge or competence of the person issuing the opinion, report, or other document includes any form of language that is conventionally understood to constitute such a statement or implication. A statement or implication of special knowledge or competence in accounting or auditing may arise from the use by the issuer of the opinion, report, or other document of a name or title indicating that the person is an accountant or auditor; or the language of the opinion, report, or other document itself.

(24) Interpretive Comment: The practice of public accountancy is defined in §901.003 of· the Act (relating to the Practice of Public Accountancy).

Xl-8

§501.73./ntegrity and Objectivity.

(a) A person in the performance of professional accounting services or professional accounting work shall maintain integrity and objectivity, shall be free of conflicts of interest and shall not knowingly misrepresent facts nor subordinate his or her judgment to others. In tax practice, however, a person may resolve doubt in favor of his client as long as any tax position taken complies with applicable standards such as those set forth in Circular 230 issued by the IRS and the AICPA's SSTSs.

(b) A conflict of interest may occur if a person performs a professional accounting service or professional accounting work for a client or employer and the person has a relationship with another person, entity, product, or service that could, in the person's professional judgment, be viewed by the client, employer, or other appropriate parties as impairing the person's objectivity. If the person believes that the professional accounting service or professional accounting work can be performed with objectivity, and the relationship is disclosed to and consent is obtained from such client, employer, or other appropriate parties in writing, then this rule shall not operate to prohibit the performance of the professional accounting service or professional accounting work because of a conflict of interest.

(c) Certain professional engagements, such as audits, reviews, and other services, require independence. Independence impairments under §501.70 of this chapter (relating to Independence), its interpretations and rulings cannot be eliminated by disclosure and consent.

(d) A person shall not concurrently engage in the practice of public accountancy and in any other business or occupation which impairs independence or objectivity in rendering professional accounting services or professional accounting work, or which is conducted so as to augment or benefit the accounting practice unless these rules are observed in the conduct thereof.

(e) Interpretive comment: An email communication will satisfy the requirement for written disclosure of a conflict of interest in subsection (b) of this section.

Xl-9

§501. 75. Confidential Client Communications.

(a) Except by permission of the client or the authorized representatives of the client, a person or any partner, member, officer, shareholder, or employee of a person shall not voluntarily disclose information communicated to him by the client relating to, and in connection with, professional accounting services or professional accounting work rendered to the client by the person. Such information shall be deemed confidential. The following includes, but is not limited to, examples of authorized representatives:

(1) the authorized representative of a successor entity becomes the authorized representative of the predecessor entity when the predecessor entity ceases to exist and no one exists to give permission on behalf of the predecessor entity; and

(2) an executor/administrator of the estate of a deceased client possessing an order signed by a judge is an authorized representative of the estate.

(b) The provisions contained in subsection (a) of this section do not prohibit the disclosure of information required to be disclosed:

(1) by the professional standards for reporting on the examination of a financial statement and identified in Chapter 501, Subchapter B of this title (relating to Professional Standards);

(2) by applicable federal laws, federal government regulations, including requirements of the PCAOB;

(3) under a summons or subpoena under the provisions of the Internal Revenue Code of 1986 and its subsequent amendments, a summons under the provisions of the Securities Act of 1933 (15 U.S. C. Section 77a et seq.) and its subsequent amendments, or a summons under the provisions of the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.) and its subsequent amendments, the Securities Act (Article 581-1 et seq., Vernon's Texas Civil Statutes), Texas Revised Civil Statutes Annotated;

(4) under a court order signed by a judge if the court order:

(A) is addressed to the license holder;

(B) mentions the client by name; and

(C) requests specific information concerning the client.

(5) by the public accounting profession in reporting on the examination of financial statements;

(6) by a congressional or grand jury subpoena;

(7) in investigations or proceedings conducted by the board;

Xl-10

(8) in ethical investigations conducted by a private professional organization of certified public accountants;

(9) in a peer review; or

(1 0) in the course of a practice review by another CPA or CPA firm for a potential acquisition in conjunction with a prospective purchase, sale, or merger of all or part of a member's practice if both firms enter into a written nondisclosure agreement with regard to all client information shared between the firms.

(c) The provisions contained in subsection (a) of this section do not prohibit the disclosure of information already made public, including information disclosed to others not having a confidential communications relationship with the client or authorized representative of the client.

(d) A person in the client practice of public accountancy shall take all reasonable measures to maintain the confidentiality of the client records and shall immediately upon becoming aware of the loss of, or loss of control over, the confidentiality of those records notify the client affected in writing of the date and time of the loss if known. Loss includes a cybersecurity breach or other incident exposing the records to a third party or parties without the client's consent or the loss of the client records or the loss of control over the client records. Persons have a responsibility to maintain a back-up system in order to be able to immediately identify and notify clients of a loss.

(e) Interpretive comment. The definition of a successor entity as referenced in subsection (a)(1) of this section does not include the purchaser of all assets of an entity.

Xl-11

§501. 76.Records and Work Papers.

(a) Records.

(1) A person shall return original client records to a client or former client within a reasonable time (promptly, not to exceed 10 business days) after the client or former client has made a request for those records. Original client records are·those records provided to the person by the client or former client in order for the person to provide professional accounting services to the client or former client. Original client records also include those documents obtained by the person on behalf of the client or former client in order for the person to provide professional accounting services to the client or former client and do not include the electronic and hard copies of internal work papers. The person shall provide these records to the client or former client, regardless of the status of the client's or former client's account and cannot charge a fee to provide such records. Such records shall be returned to the client or former client in the same format, to the extent possible, that they were provided to the person by the client or former client. The person may make copies of such records and retain those copies.

(2) Unless the person and the client have agreed in writing to the contrary:

(A) A person's work papers, to the extent that such work papers include records which would ordinarily constitute part of the client's or former client's books and records and are not otherwise available to the client or former client, shall also be furnished to the client within a reasonable time (promptly, not to exceed 20 business days) after the client has made a request for those records. The person can charge a reasonable fee for providing such work papers.

(B) Such work papers shall be in a format that the client or former client can reasonably expect to use for the purpose of accessing such work papers. The person is not required to convert records that are not in electronic format to electronic format or to convert electronic records into a different type of electronic format. However, if the client requests records in a specific format, and the records are available in such format within the person's custody and control, the client's request shall be honored.

(C) The person is not required to provide the client with proprietary formulas.

(D) The person is not required to provide the client with other formulas fun less the formulas support the client's accounting or other recordst or the person was engaged to provide such formulas as part of a completed work product.

(3) Work papers which constitute client records include, but are not limited to:

(A) documents in lieu of books of original entry such as listings and distributions of cash receipts or cash disbursements;

(B) documents in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar depreciation records;

Xl-12

(C) all adjusting and closing journal entries and supporting details when the supporting details are not fully set forth in the explanation of the journal entry; and

(D) consolidating or combining journal entries and documents and supporting detail in arriving at final figures incorporated in an end product such as financial statements or tax returns.

(b) Work papers. Work papers, regardless of format, are those documents developed by the person incident to the performance of his engagement which do not constitute records that must be returned to the client in accordance with subsection (a) of this section. Work papers developed by a person during the course of a professional engagement as a basis for, and in support of, an accounting, audit, consulting, tax, or other professional report prepared by the person for a client, shall be and remain the property of the person who developed the work papers.

(c) For a reasonable charge, a person shall furnish to his client or former client, upon request from his client made within a reasonable time after original issuance of the document in question:

(1) a copy of the client's tax return; or

(2) a copy of any report or other document previously issued by the person to or for such client or former client provided that furnishing such reports to or for a client or former client would not cause the person to be in violation of the portions of §501.60 of this chapter (relating to Auditing Standards) concerning subsequent events.

(d) This rule imposes no obligation on the person who provides services to a business entity to provide documents to anyone involved with the entity except the authorized representative of the entity.

(e) Documentation or work documents required by professional standards for attest services shall be maintained in paper or electronic format by a person for a period of not less than five years from the date of any report issued in connection with the attest service, unless otherwise required by another regulatory body. Failure to maintain such documentation or work papers constitutes a violation of this section and may be deemed an admission that they do not comply with professional standards.

(f) Interpretive Comment: It is recommended that a person obtain a receipt or other written documentation of the delivery of records to a client.

(g) Interpretive Comment: For the purposes of this rule, client records include:

(1) backup or working files of commercially available software along with any passwords needed to access such files; or

(2) client files from commercially available tax return preparation software including any passwords needed to access such files.

Xl-13

§501. 77.Acting through Others.

(a) A person shall not permit others including non-CPA owners and employees, to carry out on his behalf, either with or without compensation, acts, which, if carried out by the person, would place him in violation of these rules of professional conduct.

(b) The board shall consider that the conduct of any non-CPA owner or employee in connection with the business of a licensed firm as -is the conduct of that licensed firm for the purposes of the rules of professional conduct.

Xl-14

§501. 78. Withdrawal or Resignation.

(a) If a person cannot complete an engagement to provide professional accounting services and professional accounting work or employment assignment in a manner that complies with the requirements of this chapter, the person shall withdraw from the engagement or resign from the employment assignment.

(b) If a person withdraws from an engagement or resigns from an employment assignment pursuant to this section, the person shall inform the client or employer of the withdrawal or resignation.

(c) Interpretive Comment: Any withdrawal or resignation shall preferably be in writing. A person shall comply with the requirements of §501.75 of this chapter (relating to Confidential Client Communications) and §501.90(17) §501.90(16) of this chapter (relating to Discreditable Acts) regarding confidential information of clients and employers during and after a withdrawal or resignation executed pursuant to this section. For purposes of this section, an engagement commences once an engagement letter is signed by the client, time is charged to the engagement, or compensation is received by a person in connection with an engagement or employment assignment.

(d) Interpretive comment: An email communication will satisfy the requirement for written disclosure of a withdrawal or resignation in subsection (c) of this section.

Xl-15

§501.80.Practice of Public Accountancy.

(a) A person may not engage in the practice of public accountancy unless he holds a valid license or qualifies under a practice privilege. A person may not use the title or designation "certified public accountant," the abbreviation "CPA," or any other title, designation, word, letter, abbreviation, sign, card, or device tending to indicate that the person is a CPA unless he holds a valid license issued by the board or qualifies under a practice privilege. A license is not valid for any date or for any period prior to the date it is issued by the board and it automatically expires and is no longer valid after the end of the period for which it is issued.

(b) Any licensee of this board in good standing as a CPA or public accountant may use such designation whether or not the licensee is in the client, industry, or government practice of public accountancy. However, a licensee who is not in the client practice of public accountancy may not in any manner, through use of the CPA designation or otherwise, claim or imply independence from his employer or that the licensee is in the client practice of public accountancy.

(c) Interpretive Comment: This section incorporates the definitions of the practice of public accountancy and professional services and accounting work found in §501.52(8) and (22) of this chapter (relating to Definitions) as well as §901.003 of the Act (relating to Practice of Public Accountancy).

(d) Interpretive Comment: This section incorporates §§901.451 - 901.453 of the Act (relating to the Use of Title or Abbreviation for "Certified Public Accountant;" Use of Title or Abbreviation for "Public Accountant;" and Use of Other Titles or Abbreviations).

Xl-16

§501.81.Firm Licensing License Requirements.

(a) A firm, may not provide or offer to provide attest services or use the title "CPA," "CPAs," "CPA Firm," "Certified Public Accountants," "Certified Public Accounting Firm," or "Auditing Firm" or any variation of those titles unless the firm holds a firm license issued by the board or qualifies under a practice privilege. A firm license is not valid for any date or for any period prior to the date it is issued by the board and it automatically expires and is no longer valid after the end of the period for which it is issued. A firm license does not expire when the application for license renewal is received by the board prior to its expiration date. An expiration date for a firm license may be extended by the board, in its sole discretion, upon a demonstration of extenuating circumstances that prevented the firm from timely applying for or renewing a firm license.

(b) A firm is required to hold a license issued by the board if the firm establishes or maintains an office in this state.

(c) A firm is required to hold a license issued by the board and an individual must practice through a firm that holds such a license, if for a client that has its principal office in this state, the individual performs:

(1) a financial statement audit or other engagement that is to be performed in accordance \Nith SAS;

(2) an examination of prospective financial information that is to be performed in accordance with SSAE; or

(3) an engagement that is to be performed in accordance with auditing standards of the PCAOB or its successor.

f.gl fd) Each advertisement or written promotional statement that refers to a CPA's designation and his or her association with an unlicensed entity in the client practice of public accountancy must include the disclaimer: "This firm is not a CPA firm." The disclaimer must be included in conspicuous proximity to the name of the unlicensed entity and be printed in type not less bold than that contained in the body of the advertisement or written statement. If the advertisement is in audio format only, the disclaimer shall be clearly declared at the conclusion of each such presentation.

@ fet The requirements of subsection f.gl fd) of this section do not apply with regard to a person performing services:

(1) as a licensed attorney at law of this state while in the practice of law or as an employee of a licensed attorney when acting within the scope of the attorney's practice of law;

(2) as an employee, officer, or director of a federally-insured depository institution, when lawfully acting within the scope of the legally permitted activities of the institution's trust department; or

Xl-17

(3) pursuant to a practice privilege.

@).{f) On the determination by the board that a person has practiced without a license or through an unlicensed firm in violation of subsection {ill~ of this section, the person's certificate shall be subject to revocation and may not b~ reinstated for at least 12 months from the date of the revocation.

ill ffij- Interpretive Comment: A person who is employed by an unlicensed firm that offers services that fall within the definitions of the client practice of public accountancy as defined in §501.52(8) and (22) of this chapter (relating to Definitions) and §901.003 of the Act (relating to Practice of Public Accountancy) must comply with the disclaimer requirement found in subsection {ill~ of this section.

Xl-18

§501. 82.Advertising.

(a) A person shall not use or participate in the use of:

(1) ~my communication having reference to the person's professional services that contains a false, fraudulent, misleading or deceptive statement or claim;

(2) any communication that refers to the person's professional services that is accomplished or accompanied by coercion, duress, compulsion, intimidation, threats, overreaching, or vexatious or harassing conduct; nor

(3) a name that is misleading as to the identity of the individual practicing under such name.

(b) Definitions:

(1) A "false, fraudulent, misleading or deceptive statement or claim" includes, but is not limited to, a statement or claim which:

(A) contain a misrepresentation of fact;

(B) is likely to mislead or deceive because it fails to make full disclosure of relevant facts;

(C) is intended or likely to create false or unjustified expectations of favorable results;

(D) implies educational or professional attainments or licensing recognition not supported in fact;

(E) represents that professional accounting services can or will be completely performed for a stated fee when this is not the case, or makes representations with respect to fees for professional accounting services that do not disclose all variables that may reasonably be expected to affect the fees that will in fact be charged;

(F) contains other representations or implications that in reasonable probability will cause a reasonably prudent person to misunderstand or be deceived;

(G) implies the ability to improperly influence any court, tribunal, regulatory agency or similar body or official due to some special relations;

(H) consists of self-laudatory statements that are not based on verifiable facts;

(I) makes untrue comparisons with other accountants; or

(J) contains testimonials or endorsements that are not based upon verifiable facts.

(2) Broadcast--Any transmission over the airwaves or over a cable, wireline, Internet, cellular, e-mail system or any other electronic means.

Xl-19

(3) Coercion--Compelling by force or threat of force so that one is constrained to do what his free will would otherwise refuse.

(4) Compulsion--Driving or urging by force or by physical or mental constraint to perform or forbear from performing an act.

(5) Direct personal communication--Either a face-to-face meeting or a conversation by telephone.

(6) Duress--Any conduct which overpowers the will of another.

(7) Harassing--Any word, gesture, or action which tends to alarm and verbally abuse another person.

(8) Intimidation--Willfully to take, or attempt to take, by putting in fear of bodily harm.

(9) Overreaching--Tricking, outwitting, or cheating anyone into doing an act which he would not otherwise do.

(1 0) Threats--Any menace of such a nature and extent as to unsettle the mind of anyone on whom it operates, and to take away from his acts that free and voluntary action which alone constitutes consent.

(11) Vexatious--Irritating or annoying.

(c) It is a violation of these rules for a person to persist in contacting a prospective client when the prospective client has made known to the person, or the person should have known the prospective client's desire ndt to be contacted by the person.

(d) In the case of an electronic or direct mail communication, the person shall retain a copy of the actual communication along with a list or other description of parties to whom the communication was distributed. Such copy shall be retained by the person for a period of at least 36 months from the date of its last distribution.

(e) Subsection (d) of this section does not apply to anyone when:

(1) the communication is made to anyone who is at that time a client of the person;

(2) the communication is invited by anyone to whom it was made; or

(3) the communication is made to anyone seeking to secure the performance of professional accounting services.

(f) In the case of broadcasting, the broadcast shall be recorded and the person shall retain a recording of the actual transmission for at least 36 months.

Xl-20

§501.83.Firm Names.

(a) General rules applicable to all firms:

(1) A firm name may not contain words, abbreviations or other language that are misleading to the public, or that may cause confusion to the public as to the legal form or ownership of the firm.

(2) A firm licensed by the board may not conduct business, perform or offer to perform services for or provide products to a client under a name other than the name in which the firm is licensed.

(3) A word, abbreviation or other language is presumed to be misleading if it:

(A) is a trade name or assumed name that does not comply with paragraph (4)(A) or (B) of this subsection;

(B) states or implies the quality of services offered, special expertise, expectation as to outcomes or favorable results, or geographic area of service;

(C) includes the name of a non-owner of the firm;

(D) includes the name of a non-CPA, except as provided in paragraph (4)(B) of this subsection;

(E) states or implies educational or professional attainment not supported in fact;

(F) states or implies licensing recognition for the firm or any of its owners not supported in fact;

(G) includes a designation such as "and company," "associates," "and associates," "group" or abbreviations thereof or similar designations implying that the firm has more than one employed licensee unless there are at least two employed licensees involved in the practice. Independent contractors are not considered employees under this subsection; or

(H) includes the designation "company" when it is a one licensee sole proprietorship.

(4) A word, abbreviation ·or other language is presumed not misleading if it:

(A) is the licensee's full name, the licensee's surname, or full or last initials of one or more current or former CPA owners of the firm, its predecessor firm or successor firm;

(B) is the name, surname, or initials of one or more current or former foreign practitioner owners of the firm, its predecessor firm or successor firm who are or would have been eligible to practice public accountancy in this state pursuant to §901.355 of the Act (relating to Registration for Certain Foreign Applicants);

Xl-21

(C) indicates the legal organization of the firm; or

(D) states or implies a limitation on the type of service offered by the firm, such as "tax," "audit" or "investment advisory services," provided the firm in fact principally limits its practice to the type of service indicated in the name.

(5) The board may place conditions on the licensing of a firm in order to ensure compliance with the provisions of this section.

(b) Additional Requirements Based on Legal Form or Ownership.

(1) The names of a corporation, professional corporation, limited liability partnership, professional limited liability company or other similar legal forms of ownership must contain the form of ownership or an abbreviation thereof, such as "Inc.," "P.C.," "L.L.P." or "P.L.L.C."; except that a limited liability partnership organized before September 1, 1993 is not required to utilize the words "limited liability partnership" or any abbreviation thereof.

(2) Sole Proprietorships:

(A) The name of a firm that is a sole proprietor must contain the surname of the sole proprietor as it appears on the individual license issued to the sole proprietor by the board.

(B) A partner surviving the death of all other partners may continue to practice under the partnership name for up to two years after becoming a sole proprietor, notwithstanding subsection (d) of this section.

(c) The name of any current or former owner may not be used in a firm name during any period when such owner is prohibited from practicing public accountancy and prohibited from using the title "certified public accountant," "public accountant" or any abbreviation thereof, unless specifically permitted by the board.

(d) A firm licensed by the board is required to report to the board any change in the legal organization of the firm and amend the firm name to comply with this section regarding firm names for the new organization within thirty days of the effective date of such change. · ·

(e) This section regarding firm names does not affect firms licensed by the board prior to the effective date of this section, but does apply to any change in legal organization or name that occurs after the effective date of this section. Nothing in this subsection prohibits the board from placing conditions on the licensing of a firm pursuant to subsection (a)(5) of this section at the time of renewal of the firm license.

Xl-22

§501. 85. Complaint Notice.

When a person receives a complaint that an alleged violation of the Act or Rules of Professional Conduct has occurred, a person shall provide to the complainant a statement that: Complaints concerning Certified Public Accountants may be addressed in writing to the Texas State Board of Public Accountancy at the board's address as it appears on its website at www.tsbpa.texas.gov or [email protected] ~ Guadalupe, Tower 3, Suite 900, l\ustin, Texas 78701 3900, telephone (512) 305 7866, e mail to [email protected], or fax (512) 305 7854.

Xl-23

§501.90.Discreditable Acts.

A person shall not commit any act that reflects adversely on that person's fitness to engage in the practice of public accountancy. A discreditable act includes but is not limited to and the board may discipline a person for the following:

(1) fraud or deceit in obtaining a certificate as a CPA or in obtaining registration under the Act or in obtaining a license to practice public accounting;

(2) dishonesty, fraud or gross negligence in the practice of public accountancy;

(3) violation of any of the provisions of Subchapter J or §901.458 of the Act (relating to Loss of Independence) applicable to a person certified or registered by the board;

(4) final conviction of a felony or imposition of deferred adjudication or community supervision in connection with a criminal prosecution of a felony under the laws of any state or the United States;

(5) final conviction of any crime or imposition of deferred adjudication or community supervision in connection with a criminal prosecution, an element of which is dishonesty or fraud under the laws of any state or the United States, a criminal prosecution for a crime of moral turpitude, a criminal prosecution involving alcohol abuse or controlled substances, or a criminal prosecution for a crime involving physical harm or the threat of physical harm;

(6) a revocation, cancellation, placement on probation, limitation on the scope of practice, or suspension by another state, or a refusal of renewal by another state, of the authority issued by that state to the person, or to the person's partner, member, or shareholder, to engage in the practice of public accountancy for a reason other than the failure to pay the appropriate authorization fee cancellation, revocation, suspension or refusal to renew authority to practice as a CPA or a public accountant by any other state for any cause other than failure to pay the appropriate registration fee in such other state· ,

(7) suspension or revocation of or any consent decree concerning the right to practice before any state or federal regulatory or licensing body for a cause which in the opinion of the board warrants its action;

(8) a final finding of conduct by state or federal courts of competent jurisdiction, agencies, boards, local governments or commissions for violations of state or federal laws or rules or findings of unethical conduct by licensees that engage in activities regulated by entities including but not limited to: the Public Company Accounting Oversight Board, Internal Revenue Service, U.S. Securities and Exchange Commission, U.S. Department of Labor, U.S. General Accounting Office, U.S. Housing and Urban Development, Texas State Auditor, Texas State Treasurer, Texas Securities Board, Texas Department of Insurance, and the Texas Secretary of State;

Xl-24

(9) knowingly participating in the preparation of a false or misleading financial statement or tax return;

(1 0) fiscal dishonesty or breach of fiduciary responsibility of any type;

(11) failure to comply with a final order of any state or federal court;

(12) repeated failure to respond to a client's inquiry within a reasonable time without good cause;

(13) intentionally misrepresenting facts or making a misleading or deceitful statement to a client, the board, board staff or any person acting on behalf of the board;

(14) giving intentional false sworn testimony or perjury in court or in connection with discovery in a court proceeding or in any communication to the board or any other federal or state regulatory or licensing body;

(15) threats of bodily harm or retribution to a client;

(16) public allegations of a lack of mental capacity of a client which cannot be supported in fact;

(17) voluntarily disclosing information communicated to the person by an employer, past or present, or through the person's employment in connection with accounting services rendered to the employer, except:

(A) by permission of the employer;

(B) pursuant to the Government Code, Chapter 554 (commonly referred to as the "Whistle Blowers Act");

(C) pursuant to:

(i) a court order signed by a judge;

(ii) a summons under the provisions of:

(I) the Internal Revenue Code of 1986 and its subsequent amendments;

(II) the Securities Act of 1933 (15 U.S.C. §77a et seq.) and its subsequent amendments; or

(Ill) the Securities Exchange Act of 1934 (15 U.S.C. §78a et seq.) and its subsequent amendments;

(iii) a congressional or grand jury subpoena; or

Xl-25

(iv) applicable federal laws, federal government regulations, including requirements of the PCAOB;

(D) in an investigation or proceeding by the board;

(E) in an ethical investigation conducted by a professional organization of CPAs;

(F) in the course of a peer review under §901.159 of the Act (relating to Peer Review); or

(G) any information that is required to be disclosed by the professional standards for reporting on the examination of a financial statement.

(18) breaching the terms of an agreed consent order entered by the board or violating any Board Order.

(19) Interpretive Comment: The board has found in §519.7 of this title (relating to Criminal Offenses that May Subject a Licensee or Certificate Holder to Discipline or Disqualify a Person from Receiving a License Misdemeanors that Subject a Licensee or Certificate Holder to Discipline by the Board) and §525.1 of this title (relating to Applications for the UCPAE, Issuance of the CPA Certificate, or Initial License Applications for the Uniform CPA Examination, Issuance of the CPA Certificate, or a License) that any crime of moral turpitude directly relates to the practice of public accountancy. A crime of moral turpitude is defined in this chapter as a crime involving grave infringement of the moral sentiment of the community. The board has found in §519.7 of this title that any crime involving alcohol abuse or controlled substances directly relates to the practice of public accountancy.

(20) Interpretive comment: A conviction or final finding of unethical conduct by a competent authority, for the purpose of paragraph (8) of this subsection, includes any right to practice before the authority or findings that limit the scope of the permit or license conveyed by the authority. Conviction relates to the finding in a criminal proceeding and final finding relates to a determination in a non-criminal proceeding. Unethical conduct or activities are determined by the governmental entity making the determination of a conviction or final finding.

Xl-26

Agenda Item XII

Review of Future Meetings/Hearing Schedules

May 14, 2020

I. DISCUSSION: Schedule of dates for 2020 Board and committee meetings, hearings, and other activities are attached for your information.

II. RECOMMENDATION: None by staff

Ill. SUGGESTED MOTION: None by staff

Xll-1

2 2.0 EVENT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Board 16 12 14 16 17 12 Meeting 10:00 10:00 10:00 10:00 10:00 10:00

Swearing-in 13 19 Ceremony 10:00 10:00

16-18 2-4 NASBA

E.D. Western

1-4

Meetings &

Regional Annual

Legal Mtg. Conf.

Mtg.

TSCPA 24-25 26-27

Meetings Mid-yr. Annual Conf. Mtg.

Staff 1 17 21 21 1 25 191 271 7 11 24-25 Holidays 20 26-27

Behavioral 12 Enforcement 9:15

CPE

CEC

Executive 15 11 13 15 16 11

1:30 2:30 2:00

Licensing

Qualifications 11

10:00

Orientation 15

10:00

Peer Assistance

Peer Review

Rules 15 11

2:30 1:30

TSR 16 14 16 17 12

11:30 11 :30 11 :30 11 :30 11 :30

1 Skeleton crew holiday

Agenda Item XIII

Adjournment

May 14, 2020

I. DISCUSSION: The presiding officer will entertain a motion to adjourn.



Xlll-1

the texas state board of accountancy is holding its …...2020/05/14 · the texas state board of...

Documents