The Issue Count I of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges Respondent Certified Public Accountant (CPA) practiced public accounting in an unlicensed firm by appending the CPA designation after her name in the telephone book and on business cards in violation of Sections 473.323(1)(a), (g), and (h) F.S. and Rule 21A-20.012 F.A.C. Count II of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges that Respondent CPA violated Sections 473.323(1), (g), and (h) and Rule 21A-24.001(1)(g) F.A.C. by appending the certified financial planner (CFP) designation along with the CPA designation after her name in the telephone book and on business cards, in that the CFP designation allegedly is an unapproved specialty of accountancy. Count III of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges that Respondent CPA practiced public accounting by holding herself out as a CPA by appending the CPA designation after her name in the telephone book and on her business cards, implying that she abides by the provisions of Chapter 473 F.S., and is thereby in violation of Sections 473.323(1)(f), (g), and (h) F.S. and Rule 21A-24.001 F.A.C. [no specific subsections cited].
Findings Of Fact Respondent Silvia S. Ibanez is a practicing attorney, a member of the Florida Bar, and holds active Florida CPA License No. 10842, currently in good standing. She is also a Registered Investment Advisor with the Florida Division of Securities and a certified financial planner (CFP). At all times material, she has been actively certified as a CFP in good standing with the International Board of Standards and Practice for Certified Financial Planners (IBCFP). The IBCFP is a corporation. "CFP" and "certified financial planner" are registered trademarks. The IBCFP has no governmental affiliations within the state of Florida. The Florida Board of Accountancy has no involvement in the CFP accrediting process and no proprietary interest over the CFP mark. As a licensee with the federal Securities and Exchange Commission, Ibanez is required to, and does, disclose the fact that she is a CPA. Ibanez' CPA certificate (like all Florida CPA certificates) authorizes her to display her CPA credentials. The CPA certificate represents that the recipient, . . . has passed all examinations and has met all other requirements prescribed by law and by rule of this board for certification as an expert public accountant, and *is therefore entitled to append the letters CPA after this registrant's name to evidence registration by this board as a Certified Public Accountant.* [Emphasis supplied between *] The Board of Accountancy's only classifications of CPA licenses/licensees are "active" or "inactive." "Active" and "inactive" refer to the status of the CPA license and do not refer to or imply that the licensee is actively practicing public accounting. One can be an actively licensed CPA and not be practicing public accounting. The Board of Accountancy issued a letter opinion to Ibanez that a CPA who offers financial planning services for a fee but who does not hold out as a CPA or become associated with financial statements would not be practicing public accounting. Ibanez is listed in the yellow pages under the heading, "Attorneys," as, "Ibanez, Silvia, S., CPA, CFP." Respondent also is listed in the white pages as "Ibanez, Silvia S., CPA CFP atty." On their face, there is nothing false or fraudulent about these listings. As an attorney, Petitioner also places "CPA" after her name on her business cards and on her letterhead. The Respondent's business card states "Silvia Safille Ibanez, JD, CPA, CFP." DPR contends that because Petitioner "holds out" to the public as a CPA, uses accounting skills, and provides one or more types of management, advisory or consulting services, she is currently "practicing public accounting." Ibanez is not listed in the yellow pages under "accountants," "accountants, certified," or "CPAs." Neither the CFP nor CPA credential is part of the firm name, "Silvia S. Ibanez, P.A. - Law Offices," which also appears on Ibanez' business card. Ibanez' telephone directory listings and card at issue show the CPA and CFP credentials strictly appended to Respondent's individual name. Louis Dooner, accepted as an expert certified public accountant, testified that the Respondent is involved in the practice of public accounting because by merely appending the CPA designation after her name on her business cards, she is telling the public that she is offering to perform services that CPAs perform. Respondent Ibanez currently operates as a sole practitioner of law employed by the law firm of "Silvia S. Ibanez, P.A." As such, she provides specialized legal services for her clients not provided by CPAs. As part of her current, normal professional activities as an attorney, she provides all types of tax services to her clients, including tax opinion work, representation before the Internal Revenue Service, and evaluation of the tax consequences of certain transactions. She also performs financial counselling and planning for her clients. In doing so, she utilizes both her legal education, training, and experience and her education, training, and experience as a CPA. Prior to admission to the Florida Bar, Ibanez was employed by two CPA firms where she did substantially similar work, plus audits. It is conceded by the parties that it is possible to practice law and public accounting in the same business activity and that many activities conducted by professionals and nonprofessionals other than by CPAs and other than by attorneys are identical to activities performed by CPAs engaged in public accounting. For instance, anyone can legally prepare a tax return. Bookkeepers and free-lance tax assistors of all sorts are unregulated in any way. Truthful use, communication, or disclosure of the CPA credential by an actively licensed CPA does not per se constitute false, misleading, or deceptive advertising. The evidence does not support a finding that withholding truthful disclosure that one has earned the CPA credential benefits the public welfare or effects the purposes of the enabling legislation, or indeed, how such nondisclosure could promote them, particularly since it has been shown that persons of considerably lesser competency and achievement levels in the discipline of accounting may legally offer to the public almost all the services provided by CPAs. The use of the term "CPA" implies a specific competency to the public. The fact that Ibanez is a CPA is valuable to her legal clients. CPA status is a valuable property right to each CPA, and the ability of a practicing attorney to publicize the fact that s/he holds an active CPA license is a valuable asset to that individual. The only activity among public accounting activities that is a unique activity of CPAs is the "attest" function. See, Section 473.322(1)(c) F.S. There is no evidence that Respondent Ibanez attests as a CPA in the course of her law practice or that she personally performs audits. Ibanez testified credibly that her intent in appending the CPA and CFP credentials solely to her own name is to indicate that she is, in her own right, individually licensed as a CPA and CFP. Respondent Ibanez has clearly marked her office premises with all the indicia of a law office, including two signs posted outside the building itself. One sign specifies that the building constitutes "law offices," that "Silvia S. Ibanez, P.A." is located there, and that Ibanez is an "attorney at law," with no reference to her CPA or CFP credentials. Another sign specifies, "law offices," without any reference to her CPA or CFP credentials. A potential client must pass these two signs just to enter the building that houses Ibanez' law office. Once in the building, a potential client also must be admitted by a secretary to Ibanez' inner office. Ibanez has consistently required her secretary to screen all telephone calls and potential clients who enter the office to be certain that persons seeking out Ibanez will be fully informed that Ibanez is not offering strictly accounting services and that she is practicing law. Ibanez also personally makes that information clear to individuals at each initial office consultation and consistently follows up office consultations at which her legal employment has been negotiated with letters and/or employment contracts which set forth the parameters of the legal services she has agreed to perform for clients. Elise Rice is an employee of Petitioner Department of Professional Regulation who has earned a vocational school accounting diploma. She is not a CPA, nor is she an attorney. Ms. Rice testified that she, personally, drew the conclusion from looking at Respondent's business card that the Respondent was a CPA, but that she did not know what CFP or JD signified and therefore she would not assume from the card that Ibanez was a lawyer or a certified financial planner. Clearly, the designation "CFP" did not suggest to Ms. Rice that Ibanez was advertising either a specialty or particular competence in public accounting. Ms. Rice further stated that, despite Ibanez' business card's clear use of the term "law offices," she would continue to believe that Ibanez was doing both CPA work and legal work out of "law offices." Ms. Rice further stated that even if she telephoned ahead and spoke to a secretary who clearly indicated that Ibanez was a CPA but was working as a lawyer, she would persist in believing that Ibanez was doing both CPA work and legal work out of "law offices." Ms. Rice also testified that if she arrived at Ibanez' office building and was confronted by the sign posted there which clearly indicates Ibanez is an attorney at law and the two signs that clearly state that the building houses only "law offices," she would then believe that she had come to the wrong place to find Ibanez the CPA. However, Ms. Rice conceded that, under the latter circumstances, the premises were, indeed, law offices. Ms. Rice's personal view that Ibanez must be acting as a CPA in the face of significant information to the contrary is not persuasive that the average layman would be misled by Ibanez' business card and telephone listings in the face of all her other disclosures. One who has initially consulted the yellow pages of the telephone directory under the heading "attorneys" would most logically infer from Ibanez' yellow pages listing that Ibanez is a practicing attorney who is dually licensed as a CPA and who possesses a CPA's education, training, experience, and skills and that Ibanez is offering to act as a lawyer capable of applying her additional education, training, experience, and skills as a CPA and CFP. The inferences that the average viewer might draw from Ibanez' white pages telephone listing and her business card are more blurred, but Ibanez demonstrated, and it is conceded by both parties, that an individual may have the opportunity to disabuse members of the public that s/he is engaged in the activity of the practice of public accounting or that s/he is offering all the services normally associated with a CPA, as opposed to law or some other profession, at least where there is direct contact by letter or telephone. It may be reasonable that at least until making direct contact with Ibanez or her office staff, the average viewer of either the telephone listings or the card would assume that, as a CPA, Ibanez is subject to disciplinary oversight by the licensing authority for accounting functions only and that she abides by all Board of Accountancy regulations while doing accounting. However, prior to any meaningful employment, Ibanez exercises reasonable care to disabuse the average viewer of that belief. Since 1982, the Board has consistently issued letter opinions on an individual basis to the effect that the designation "certified financial planner" is an accountancy specialization which has not been approved by the Board and further holding that "CFP" could not be displayed by CPA licensees on stationery or in yellow pages listings in conjunction with the CPA designation. The Executive Director of the Florida Board of Accountancy did not know how "certified financial planner" came to be viewed as a specialty designation of certified public accounting, and the letter opinions do not set forth the Board's rationale for considering it as a specialty. The Board has adopted no rule to that effect. Further, in this proceeding, the agency has not proven any rationale for the policy set forth in the Board opinions. The agency presented no evidence by way of anecdotal experience, professional studies, or accumulated data to show that licensed CPAs or certified CFPs have ever mislead members of the public purely by displaying their credentials in the manner Ibanez has done here. DPR knows of no complaint and has never received any complaint from a member of the public regarding Ibanez' professional activities or advertising. Nor is there any evidence that any member of the public has ever been confused about whether or not Ibanez was practicing accounting or law or financial planning or that any member of the public was mislead into hiring Ibanez under the impression that she would be acting as a CPA solely and not as an attorney, or that she would be performing audits or performing the attesting function of a CPA. Upon the scenario established in the case sub judice, Ibanez is not guilty of any fraudulent advertising so as to mislead the public to the effect that she abides by all regulations of the Board of Accountancy.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Accountancy enter a Final Order that: Finds Respondent Ibanez is not "holding herself out as a certified public accountant" and Finds her not guilty of all charges alleged under Counts I through III and dismisses them. DONE and ENTERED this 15th day of January, 1992, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1992.
Findings Of Fact The Petitioner completed an academic program in accounting at the University of South Florida in March, 1976. She applied to sit for the May, 1976 Certified Public Accountant's examination, and paid her fee. There are four sections to the examination: Auditing, Law, Theory, and Practice. At the May, 1976 examination the Petitioner passed the Law section, but failed the sections on Auditing, Theory and Practice. Accordingly, under the Board's rules, the Petitioner was not credited with having passed any sections of the examination, and needed to take the entire test again. She applied to sit for the November, 1976 examination, paid her application fee, and sat for the examination. On this occasion she passed the Theory and Practice sections of the examination but failed the Auditing and Law sections. Under the Board's rules the Petitioner at this juncture was credited with having passed the Theory and Practice sections, and would be allowed to sit for the next three consecutive examinations in order to pass the remaining two sections. She applied to sit for the May, 1977 examination, paid her fee and sat for the examination. She passed the Law section and failed Auditing. At this juncture she needed to pass only the Auditing section, and had two examinations within which to accomplish that. She applied to sit for the November, 1977 examination. The deadline for making application was September 1, 1977. The Petitioner, through her own mistake, was lake in making application, and her application was rejected. She was not permitted to sit for the November examination. She did timely apply for the May, 1978 examination. She again failed the Auditing section with a score of 69. Under the Board's rule her application for certification as a CPA was considered she would need to being again the testing process, without being credited with having passed any sections. She applied for a regrading of the May, 1978 examination. The examination was regraded, but her score was not changed. The Petitioner is seeking, through this proceeding, an opportunity to retake the Auditing section of the examination, while continuing to receive credit for having passed the Law, Theory, and Practice sections. Under the Board's interpretation of its rules, she would not receive credit for having passed the sections, but would need to begin the testing procedure as a new applicant.
The Issue The issue in these consolidated cases is whether disciplinary action should be taken against Respondent's license to practice as a certified public accountant in the state of Florida based upon the alleged violations of Chapter 473, Florida Statutes, set forth in the Amended Administrative Complaints filed by Petitioner.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: At all times pertinent to these proceedings, Respondent was licensed to practice as a certified public accountant ("CPA") in the state of Florida, having been issued license number AC0001638. Respondent's most recent business address was 224 North Federal Highway, Suite #4, Fort Lauderdale, Florida 33301. Petitioner has presented evidence of a number of Final Orders entered by the Florida Board of Accountancy (the "Board") against Respondent as a result of prior disciplinary action initiated by Petitioner. While the records presented are somewhat confusing and bear several different case numbers, it appears that, as a result of the various cases, Respondent has been on probation for approximately the last 12 years. According to the records presented, the first action taken against Respondent's license is reflected in a Final Order dated December 31, 1981 and filed on February 8, 1982 in DPR Case Number 0000499. That Final Order indicates that a stipulation executed by Respondent "as to facts, law and discipline" was accepted by the Board "with no changes." The stipulation referenced in that Final Order was not included with the exhibits entered into evidence in this proceeding. Thus, the "facts, law and discipline" are not of record in this case. Next, the Board entered a Final Order dated May 11, 1982 and filed on May 17, 1982 in DPR Case Numbers 16369, 16370 and 15399 imposing a $1,000 fine against Respondent and suspending his license for eighteen (18) months. An Amended Final Order dated September 3, 1982 was filed in DPR Case Numbers 16369, 16370 and 15399 on September 15, 1982. That Amended Final Order accepted a signed stipulation dated July 30, 1982 and modified the Final Order entered on May 11, 1982. In lieu of the fine and suspension imposed in the May 11 Final Order, the Amended Final Order placed Respondent on probation for five years with a requirement for a review of Respondent's practice at the end of each year by a CPA selected by the Department at Respondent's expense. The independent certified public accountant was supposed to submit written and oral reports to the Board and the Department regarding Respondent's compliance with the applicable statutes and rules governing the accounting profession. The Stipulation which was incorporated into the Amended Final Order specifically required Respondent to comply "with all provisions of Chapter 455 and 473, Florida Statutes, and the rules promulgated pursuant thereto." The Stipulation provided in part as follows: The Board shall determine at a public hearing whether [Respondent] has complied with Chapters 455 and 473, F.S. and the rules promulgated thereto. The Board may restrict or prohibit [Respondent's] practice of public accountancy during his period of probation as it deems necessary to protect the public safety and welfare. It is clearly understood and agreed that, in the event the DEPARTMENT, the BOARD or the BOARD'S Probable Cause Panel find sufficient evidence to believe reasonable cause exists that [Respondent] has violated any of the conditions of probation as outlined above, a notice of said violation shall be sent to [Respondent], by certified mail, setting forth the nature of the alleged violation and an emergency hearing will be held by the BOARD or the BOARD'S Probable Cause Panel, and upon a find [sic] of probable cause, [Respondent's] probation may be vacated and his license to practice accountancy in the State of Florida, subject to automatic suspension, with further disciplinary proceedings, pursuant to Chapters 455 and 473, F.S. If Respondent has not complied with all the terms and conditions of this joint stipulation and final order of the BOARD, the BOARD shall enter an Order imposing such further terms and conditions of probation pursuant to the statutory powers set forth in 473.323(1)(3), F.S., and shall further cause said matter to be referred to the BOARD'S Probable Cause Panel or such other jurisdictional authority as may be established for purposes of determining probable cause and initiating further administrative and/or judicial action against the Respondent. * * * [Respondent] expressly waives all further procedural steps and expressly waives all rights to seek judicial review of, or to otherwise challenge or contest the validity of a joint stipulation of facts, conclusions of law and imposition of discipline, and the final order of the BOARD incorporating said stipulation. At a meeting on January 21, 1985, the Florida Board of Accountancy reviewed a report from the consultant hired to conduct the inspection and review of Respondent's public accountancy practice in accordance with the terms of the Amended Final Order entered on September 15, 1982. Based upon its review of the consultant's report, the Board imposed an additional condition of probation that all audits, reviews and compilations prepared by Respondent were to be reviewed prior to their issuance by a CPA selected by Respondent at Respondent's expense. This additional aspect of Respondent's probation was incorporated in a Final Order dated February 15, 1985 and entered on February 28, 1985 in DPR Case Number 0016369. In an Administrative Complaint dated December 4, 1985, Petitioner charged Respondent with violating the terms of his probation by issuing compilations without prior review by another CPA. This Administrative Complaint was assigned DPR Case Number 0063064. As reflected in a Final Order dated February 23, 1987 and filed on March 10, 1987 in DPR Case Number 0063064, Respondent's probation was extended until September 1988 based upon a signed Stipulation dated November 16, 1986 which was accepted by the Board during its meeting on January 30, 1987. As a result of the March 10, 1987 Final Order extending Respondent's probation, Respondent was required to continue to obtain review and approval by an independent CPA prior to issuance of any audited financial statements, reviewed financial statements and compiled financial statements and related accountant's reports. In an Administrative Complaint dated December 7, 1989 in DPR Case Number 0063064, Petitioner charged Respondent with violating Section 473.323(1)(g), Florida Statutes, as a result of his issuance of financial statements without prior review by a CPA as required by the previous Final Orders entered against Respondent. The Complaint did not specify any date(s) or specific financial statements involved. At a meeting on February 22, 1990, the Board accepted a Counter- Settlement Stipulation signed by Respondent on March 26, 1990 in Case Number 0063064. The Board entered a Final Order dated April 4, 1990 and filed on April 10, 1990 confirming its acceptance of the Counter-Stipulation. 2/ The Counter- Settlement Stipulation incorporated in the April 1990 Final Order extended Respondent's probation "until the terms of probation have been met." The terms of probation were stated to be: That the Respondent shall not violate the provisions of Chapters 455 or 473, Florida Statutes or the rules promulgated pursuant thereto or the terms and conditions of this joint stipulation. A Department of Professional Regulation Certified Public Accountant consultant shall interview the Respondent's clients to determine the type of work product they are receiving from the Respondent. A Department of Professional Regulation Certified Public Accountant Consultant shall conduct a review of the Respondent's tax practice along with work papers at the Respondent's expense. The Counter-Stipulation further provided that: Respondent and the Department fully understand that this Stipulation, and the subsequent Final Order incorporating same, will not in any way preclude additional proceedings by the Board and/or Department against the Respondent for acts or omissions not specifically detailed in the investigative findings of the Department upon which a finding of probable cause was made. Respondent and the Department expressly waive all further procedural steps, and expressively waives [sic] all rights to seek judicial review of or to otherwise challenge or contest the validity of the joint stipulation and the Final Order of the Board, if said stipulation is accepted by the Board and incorporated in the Final Order.... In early 1991, Marlyn Felsing, a CPA retained as a consultant to conduct a review of Respondent's work pursuant to the terms of his probation, met with Respondent and reviewed financial statements, work papers and various tax returns prepared by Respondent for his clients. Felsing reviewed the financial statements and/or business tax returns for approximately four of Respondent's business clients and reviewed the personal income tax returns for approximately three of Respondent's clients who were business owners. He also reviewed all of the related work papers and discussed his review with Respondent. Felsing prepared a report dated April 23, 1991 detailing several problems and deficiencies he found during his review. A copy of Felsing's report was offered into evidence in this case and he testified at the hearing regarding many of those findings. This evidence was offered in support of the charges in the First DOAH Complaint (DOAH Case Number 92-3421) as amended. Neither Felsing's report nor any of his findings are specifically alleged in the First DOAH Complaint. That Complaint referenced a probation report which "revealed deficiencies which were brought before the Probable Cause Panel, and it was determined that Respondent had violated the terms of the Final Order." As noted in the Preliminary Statement above, the First DOAH Complaint was filed on January 23, 1992. As reflected in a Final Order dated June 19, 1991, and filed on July 1, 1991 in DPR Case Number 0063064, the Board reviewed a probation report during its meeting on May 21, 1991 and approved a settlement stipulation extending the probation imposed by the April 4, 1990 Final Order for a period of one (1) year. The settlement stipulation referenced in this July 1, 1991 Order has not been offered into evidence in this proceeding. As best can be determined from the evidence presented in this case, the Final Order entered in DPR Case Number 0063064 on July 1, 1991, was entered after review of the probation report prepared by Marlyn Felsing on April 23, 1991. Thus, it appears that the Board has already taken final action with respect to the deficiencies found in Felsing's report. During the Board Meeting on May 21, 1991, the Board also considered whether disciplinary action should be taken against Respondent with respect to another Administrative Complaint filed against Respondent on January 7, 1991. That new Administrative Complaint was assigned DPR Case Number 95979 and contained allegations that Respondent "was associated with personal financial statements for Michael Raybeck which did not meet the appropriate standards." As reflected in a Final Order dated June 19, 1991 and filed on July 1, 1991 in DPR Case Number 95979, the Board during its May 21, 1991 meeting accepted a settlement stipulation signed by Respondent on April 15, 1991. In that settlement stipulation, Respondent admitted the allegations in the Administrative Complaint in DPR Case Number 95979. The Settlement Stipulation provided as follows: * * * Stipulated Disposition 2. Respondent's license to practice public accounting is currently on probation in case number 63064. Probation in this case shall run concurrently with the probation in case number 63064. The same CPA consultant who is assigned to review the Respondent's practice in Case Number 63064 shall also review the personal financial statements the Respondent's office prepares. The consultant shall also review the Respondent's records to determine whether he is accepting commissions. These additional terms shall also be paid for by the Respondent. * * * 5. Respondent and the Department fully under- stand that this Stipulation, and the subsequent Final Order incorporating same, will not in any way preclude additional proceedings by the Board and/or Department against the Respondent for acts or omissions not specifically detained [sic] in the investigative findings of the Department upon which a finding of probable cause was made. * * * 8. This Settlement Stipulation is [sic] an admission of any liability on behalf of the Respondent and is being entered into merely to resolve a dispute. It shall not be admissible in any court of law or any subsequent adminis- trative proceeding for any purpose. As reflected in an Order dated September 29, 1992 and filed on September 30, 1992 in DPR Case Number 90-95979, the Board reviewed a probation report during its September 24, 1992 meeting and determined "that the probation imposed upon Respondent by the Final Order dated July 1, 1991, shall be extended and/or modified as follows: extend probation and defer action until Case Number 90-13254 is resolved." Case Number 90-13254 is the Second DOAH Complaint, which was filed on July 6, 1992 (DOAH Case Number 92-5696). The Second DOAH Complaint includes specific allegations against Respondent based upon his purported preparation of misleading financial statements for American British Enterprises, Inc. and Federal Restaurants, Inc. The Second DOAH Complaint The evidence presented in this case established that Respondent provided a number of accounting services to American British Enterprises, Inc. and Federal Restaurants, Inc. The exact nature and scope of the services provided by Respondent are not entirely clear. Respondent's records of his engagement include a balance sheet of Federal Restaurants as of August 17, 1987; Consolidated Financial Statements of American British Enterprises, Inc. as of August 25, 1987; Interim Compiled Financial Statements, American British Enterprises, March 31, 1988; Financial Statements of American British Enterprises, Inc. November 30, 1988; and Financial Statements of American British Enterprises, Inc., December 31, 1988. The Second DOAH Complaint, as amended, alleges that the financial statements referenced in paragraph 19 above were included in due diligence packages for American British Enterprises and were distributed to broker- dealers. No persuasive evidence was presented regarding any such distribution. The Second DOAH Complaint also alleges that "Respondent distributed misleading financial statements to brokers with the purpose of driving up the price of the stock so they could sell shares they controlled at a profit." No evidence was presented to support this allegation. Respondent's counsel suggested that all of the financial statements in question were simply drafts and were not intended to be issued. The evidence established that Respondent executed a letter in connection with the August 17, 1987 Balance Sheet of Federal Restaurants which provided as follows: I have examined the accompanying Balance Sheet of Federal Restaurants, Inc., as of August 17, 1987 whose sole Assets are Cash and [sic] Purchase Deposit. My examination was made in accordance with standards established by the American Institute of Certified Public Accountants and accordingly, included such procedures as I considered necessary in the circumstances. In my opinion the enclosed Balance Sheet represents the financial position of Federal Restaurants, Inc., as of August 17, 1987 in accordance with generally accepted accounting principals. Similarly, Respondent's records include a signed letter to the Board of Directors of American British Enterprises in connection with the August 28, 1987 Consolidated Balance Sheet. That letter provides that Respondent conducted an examination "in accordance with generally accepted auditing standards and accordingly, included such tests of the accounting records and such other auditing procedures as I considered necessary in the circumstances." The letter further opines that the financial statements "present fairly the Consolidated Financial Position...[of the companies] in conformity with generally accepted accounting principals." Respondent's records also include a signed letter regarding both the November, 1988 and December, 1988 Financial Statements for American British Enterprises indicating that Respondent had conducted an audit in accordance with generally accepted auditing standards and that, in his opinion, the financial statements "present fairly, in all material respects, the financial position" of the company as of the stated date. There is no indication on any of these financial statements that they were drafts that were not to be issued. Aside from the letters noted in paragraph 22, the only evidence presented that any of the financial statements listed in paragraph 19 above were issued was the testimony of one of Petitioner's experts who suggested that the statements had to have been issued since they were found in the SEC's files. However, no direct evidence was presented to establish that any investors or potential investors received the financial statements. Moreover, no evidence was presented that any such investors suffered a loss as a result of their reliance upon the financial statements. Certified public accountants are required to utilize specific guidelines in the performance of accounting services. Those guidelines are codified in the Statements on Standards for Accounting and Review Services ("SSARS"). The failure to abide by the SSARS guidelines constitutes performance below acceptable accounting standards. Petitioner has presented testimony from two experts regarding the deficiencies in the various financial statements referenced in paragraph 19 above. Many of the problems cited by Petitioner's experts relate to alleged deficiencies in Respondent's work papers. Respondent's expert has challenged some of those alleged deficiencies. Because the work papers have not been offered into evidence, it is impossible to resolve some of the conflicts in the experts' opinions. Nonetheless, the evidence was sufficient to clearly and convincingly demonstrate that Respondent's work was not in accordance with generally accepted accounting principals in several respects and the financial reports identified in paragraph 19 failed to comply with the SSARS in several ways. The August 17, 1987 balance sheet of Federal Restaurants indicates that the only assets of the company were cash and a purchase deposit on a contract to acquire a restaurant. The balance sheet of Federal Restaurants as of August 17, 1987 has no notes to it. Accounting Principals Board ("APB") Opinion 22 provides that a description of all significant accounting policies of the reporting entities should be included as an integral part of the financial statements. In this particular instance, the omission of accounting policies is of minor importance since the balance sheet only reflects two assets: cash being held in escrow and a deposit on a contract to purchase a restaurant (the "Purchase Contract"). As discussed below, none of the financial statements prepared by Respondent disclosed the terms of the Purchase Contract. Furthermore, it appears from other documents in Respondent's records that the corporation is wholly owned by American British Enterprises and/or is jointly controlled, but there is no disclosure of that relationship in the financial statements. These omissions are significant deficiencies which have not been explained. Statement of Auditing Standards ("SAS") 41 requires work papers to support the conclusions of an audit. According to SAS 41, the work papers constitute the principal record of the work that the auditor has done and the conclusions that he has reached concerning significant matters. Respondent's records do not include work papers for the August 17, 1987 audit. SAS 22 provides guidance to an independent auditor making an examination in accordance with generally accepted auditing standards on the considerations and procedures applicable to planning and supervision, including preparing an audit program, obtaining knowledge of the entity's business, and dealing with differences of opinion among firm personnel. While there is conflicting evidence as to what was included in Respondent's work papers, the evidence was clear that Respondent's records for the August 17, 1987 audit do not comply with the requirements of SAS 22, because there was no clearly identified planning memos or audit programs. In fact, there is not even an engagement letter. SAS 19 requires an independent auditor to obtain certain written representations from management as part of an examination made in accordance with generally accepted auditing standards and provides guidance concerning the representations to be obtained. Petitioner's experts contend that Respondent's work papers do not include an appropriate representation letter from management for any of the Financial Statements. Respondent's expert contends there was such a letter with respect to the August 27, 1987 Consolidated Financial Statements. While it is not clear what is contained in the records, it is clear that the records do not clarify conflicting documentation in Respondent's work papers regarding the relationship between Federal Restaurants and American British Enterprises. Furthermore, Respondent's records do not include a clear statement from management regarding the terms of the Purchase Contract and the apparent contingencies involved with that Contract. Consequently, Respondent has failed to comply with SAS 19 and SAS 45 (which addresses related-party disclosures). The August 27, 1987 Consolidated Financial Statements are not properly consolidated in accordance with Accounting Research Bulletin ("ARB") 51. In addition, the consolidated Financial Statements do not include the disclosures required by Accounting Principals Board Opinion 22. Respondent's expert contends that the statements were mistakenly entitled and they should have been captioned as "combined" rather than consolidated financial statements. Even if this after the fact justification is accepted, the statements do not adequately disclose the relationship between the companies. Respondent's expert suggests that the August 25 Consolidated Financial Statement for American British Enterprises and Federal Restaurants reflects a voidable acquisition of Federal Restaurants by American British Enterprises. If this interpretation is accepted, the August 17, 1987 Balance Sheet for Federal Restaurants was not necessarily misleading for failure to disclose its relationship with American British Enterprises. However, the August 25, 1987 Consolidated Financial Statements are incomplete since the transaction is not fully explained. Moreover, there is no disclosure that the companies were apparently under common control or ownership. With respect to the November, 1988 balance sheet of American British Enterprises, the evidence established that there was a discrepancy between the amount reflected in the financial statement for a note receivable which was the major asset of the corporation and the confirmation in the work papers regarding that asset. While this discrepancy may have been due to a discount and/or accrued interest, no explanation is provided. The discrepancy constitutes a violation of SAS 1, Section 331, which addresses the appropriate background information for receivables, and SAS 1, Section 530 which addresses the dating of the auditor's report. If the discrepancy is due to a discount, Respondent failed to comply with APB Opinion 6, paragraph 14 which requires unearned discounts to be shown as a deduction from the related receivable and/or APB Opinion 21, paragraph 16 which provides for the discount or premium to be reported on the balance sheet as a direct deduction from or addition to the face amount of the note. The work papers for the November audit do not include a reconciliation between the 1982 financial statements of the predecessor corporation and the 1987 statements. There is no documentation of efforts to communicate with the prior auditor nor is there any discussion of the consistency of application of accounting principals between the two statements. As a consequence, the statements do not conform with SAS 7 which addresses communications with a prior auditor. The work papers fail to reflect any audit work being performed on the appraisal for the equipment collateralizing the note. In addition, the work papers include a confirmation from the stock transfer agent that doesn't agree with the number of shares reflected on the financial statement. There is no explanation for this discrepancy nor is there any clear indication of the audit work performed. The financial statements also include a footnote referencing a joint venture agreement. Respondent's records do not include any evidence of audit work performed with respect to this venture agreement. The deficiencies noted in paragraph 33 also appear in the December 31, 1988 financial statements for American British Enterprises. Furthermore, Respondent's records do not contain an audit file for this December statement. The November 30, 1988 and the December 31, 1988 audits of American British Enterprises do not contain a segregation between current and noncurrent assets. This deficiency is relatively insignificant since the company was essentially just a holding company. However, it does constitute a violation of ARB 43. Similarly, the cash flows in the financial statements were not presented in the appropriate format or style required by Statement of Financial Accounting Standards 95. However, it appears that all of the necessary information was present. The deficiencies found in the financial statements prepared for Federal Restaurants and American British Enterprises constitute negligence on the Respondent's part and establish a failure to exercise professional competence and due professional care in the performance of accounting services. On or about June 14, 1990, the Securities and Exchange Commission ("SEC") filed a civil lawsuit against Respondent and three other defendants alleging the preparation of false and misleading financial statements for American British Enterprises, Inc. On August 5, 1991, Respondent executed a Consent of Edwin Tunick to the Entry of a Final Judgement of Permanent Injunction in the civil action initiated by the SEC. On September 2, 1991, a Final Judgement of Permanent Injunction as to Edwin Tunick was entered by the United States District Court for the Southern District of Florida (Fort Lauderdale Division) in Case Number 90-6483CIV-ZLOCH. That Final Judgment "permanently restrained and enjoined" Respondent from violating Section 17(a) of the Securities Act, 15 U.S.C. 77q(a) and Section 10(b) of the Exchange Act, 15 U.S.C 78 (j)b and Rule 10b-5 promulgated thereunder. The Final Judgment did not include any specific findings of any violations of the federal securities laws.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Accountancy enter a Final Order dismissing the Administrative Complaint filed in DOAH Case Number 92-3421 (DPR Case Number 91-09729); finding Respondent guilty of violating Sections 473.323(1)(a), (g) and (h), Florida Statutes, and Rules 21A-22.0001, 21A-22.0002, and 21A-22.003, Florida Administrative Code, as alleged in the Administrative Complaint filed in DOAH Case Number 92-5696 (DPR Case Number 90-13254) and dismissing the other charges in that Complaint. As penalty for the violations, Respondent should be fined $1,000, and his license should be suspended for three years. Before resuming practice, Respondent should be required to complete such mandatory continuing education courses as may be mandated by the Board and he should be placed on probation for three (3) years. DONE and ENTERED this 14th day of November, 1994, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 1994.
The Issue The issue for determination is whether Respondent committed an unlawful employment act by discriminating against Petitioner on the basis of race in violation of the Florida Civil Rights Act of 1992, as amended.
Findings Of Fact Ms. Westbrooks is an African-American female. In 2000, Ms. Westbrooks began her employment with the City in a billing position in Customer Service as an Account Clerk. She performed very well in that position and received an above satisfactory rating. In 2002, a Junior Accountant position became available, and Ms. Westbrooks applied for the position. The position description for a Junior Accountant indicates that the position’s duties included “Professional accounting work covering all fixed assets accounting and reporting.” Further, the position description indicates that the minimum qualifications consisted of the following: Associate’s degree in Accounting or related field, with some work experience in an accounting environment OR An equivalent combination of training and experience which provides the required knowledge, skills and abilities. Carlos Perez, the City’s Finance Director and a Certified Public Accountant (CPA), performed the hiring for the Junior Accountant position. He hired Ms. Westbrooks for the Junior Accountant position. Mr. Perez considered Ms. Westbrooks’ performance in the Junior Accountant position as excellent. She consistently received performance ratings of above satisfactory and merit increases. In 2006, an Accountant position became available. The City advertised the position. The announcement for the position indicated that the position’s duties included “complex technical work performing professional accounting work covering all phases of account maintenance, classification, analysis, and expenditure control of all phases of City wide fiscal transactions.” Further, the announcement indicated that the minimum requirements for the position were: Bachelors degree in Accounting, Finance or a closely related field with major coursework in accounting . . . plus one to two years experience in accounting. OR An equivalent combination of training and experience which provides the required knowledge, skills, and abilities. Moreover, the announcement provided that “Only those applicants who most closely meet the specific requirements for the position will be contacted for an interview.” Ms. Westbrooks applied for the Accountant position. No dispute exists that Ms. Westbrooks does not possess a bachelor’s degree in accounting. She has an Associates in Arts (AA) degree in Business Administration, which she obtained in 1993. At all times material hereto, the City had a tuition reimbursement program, wherein an employee of the City could obtain a degree and receive tuition reimbursement for obtaining the degree. Ms. Westbrooks was aware of the reimbursement program but chose not to avail herself of it in order to obtain a bachelor’s degree in accounting. However, she did avail herself of the program to obtain certifications associated with her position as a Junior Accountant. No dispute exists that Ms. Westbrooks met the minimum requirements for the Accountant position, satisfying the alternative requirement of equivalent combination of training and experience. Ms. Westbrooks was provided an interview. An interview panel conducted the interviews and rated the applicants, who were interviewed, on a scale of 0 through 5. The interview panel consisted of the City’s Chief Accountant, Budget Administrator, and Pension Administrator. Only the applicants who had an overall rating of 3.0 or higher on the interview were submitted by the City’s Personnel Administration Director, Rebecca Jones, to Mr. Perez. Ms. Jones is an African American and is female. Mr. Perez makes the final decision as to who is hired for accounting positions. He was the final decision-maker for this Accounting position. Mr. Perez is not African American. Only three persons received an overall interview rating of 3.0 or higher. Ms. Westbrooks was one of the three persons, and she received the highest interview score. On December 6, 2006, Ms. Jones submitted to Mr. Perez the names of the three persons, with their interview scores: Laura Westbrooks 4.0 Ronald Castrillo 3.4 Bayard Louis 3.3 Mr. Perez had never hired an accountant who did not have a four-year college degree, i.e., a bachelor’s degree, regardless of race. His position was that the person hired for the Accountant position, and all of his accountants, needed a four-year college degree because that person, as all of his accountants, would be fourth in line to head the Finance Department, as Acting Finance Director, behind himself, the Assistant Finance Director, and the Chief Accountant—at least once a year he (Mr. Perez), the Assistant Finance Director, and the Chief Accountant all attend a conference together; and that a person with a four-year college degree has the technical ability needed to perform in the position, whereas, a person without a four-year degree would not have the technical ability needed. Further, as to the accounting focus of a junior accountant position versus an accountant position, a junior accountant’s focus is fixed assets, whereas, accountants are involved with all aspects of accounting, which includes and goes beyond fixed assets. Mr. Perez had made Ms. Westbrooks aware of his position, regarding accountants, during her tenure in the Junior Accountant position. Ms. Jones did not consider Mr. Perez’s position and action, regarding the hiring of accountants, as being discriminatory. Mr. Perez’s final requirement of a four-year college degree in order to be hired by him as an accountant became the City’s requirement. Mr. Perez offered the Accountant position to Mr. Castrillo who had an AA degree in Business Administration, a Bachelor’s degree in Accounting and who was scheduled to graduate the following semester with a Master’s degree in Accounting. However, Mr. Castrillo did not accept the position due to the failure to agree on a salary. The Accountant position was re-advertised. Ms. Westbrooks remained eligible for the Accountant position and was, therefore, in the pool of applicants to be considered; but was not re-interviewed because the interview questions did not change On March 8, 2007, Ms. Jones submitted to Mr. Perez the names of the applicants who had an overall rating of 3.0 or higher on the interview, together with their interview scores: Tricia Beerom 4.0 Sampson Okeke 3.4 Mirtha Servat 3.3 Mr. Perez hired Ms. Beerom for the Accountant position. Ms. Beerom had a Bachelor of Science degree in Accounting and Management and was an African-American female. Ms. Westbrooks believed that she was not afforded an opportunity to advance because of Mr. Perez’s position regarding accountants possessing a four-year degree and that, therefore, she was discriminated against. However, even though the City had a policy against discrimination and a procedure to file discrimination complaints, she chose not to proceed through the City’s discrimination process because she had no faith in the City. Ms. Westbrooks believed that she was not going to be treated fairly by the City in any attempt by her to achieve upward mobility, which caused her to continuously experience stress, which negatively impacted her health. She eventually resigned from the City. Ms. Westbrooks’ resignation was effective May 4, 2007. At the time of her resignation, Ms. Westbrooks’ salary was $40,000. After her resignation, she received her contributions to the City’s retirement system in the amount of approximately $13,000. In September 2008, over a year after her resignation from the City, Ms. Westbrooks obtained employment with the University of Miami, School of Medicine, as a Grant and Contracts Specialist, with a salary of $41,500. Ms. Westbrooks did not identify any employees who were in classified positions as herself, who were or were not African American and who had upward mobility in positions, and who did not have four-year college degrees. Classified positions are protected by the City’s Civil Service rules and must be advertised. Ms. Westbrooks did identify City employees who were in unclassified positions, not a classified position like herself, i.e., directors and city manager, who did not have four-year college degrees, and who were and were not African American. Unclassified positions are not protected by the City’s Civil Service rules and need not be advertised. The city manager hires all department directors. No dispute exists that, at all times material hereto, a former Director of Purchasing was a white female and a long term employee, who had an AA, not a four-year degree, and who was promoted through the ranks; a Director of Public Works was a white male and a long-term employee, who had an AA, not a four- year degree, and who was promoted through the ranks. No dispute exists that the City’s City Manager is an African-American male who does not have a four-year college degree. No dispute exists that, at all times material hereto, all of the City’s Department Directors, who are African American, have four-year college degrees. The EEOC instituted an “E-RACE Initiative (Eradicating Racism and Colorism from Employment)” and developed a “set of detailed E-RACE goals and objectives to be achieved within a five-year timeframe from FY [fiscal year] 2008 to FY [fiscal year] 2013.” Included in the E-RACE Initiative, were “Best Practices for Employers and Human Resources/EEO Professionals,” which included best practices for recruitment, hiring and promotion. The E-RACE Initiative was implemented by the EEOC subsequent to the action complained of by Ms. Westbrooks and was not demonstrated to be federal law, rule, or regulation; and was, therefore, not shown to have the force or impact of law. The E-RACE Initiative is not applicable to the instant case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that the City of North Miami did not commit a discriminating employment practice against Laura A. Westbrooks in violation of the Florida Civil Rights Act of 1992, as amended, by failing to hire her for an accounting position. DONE AND ENTERED this 1st day of September, 2009, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of September, 2009.
Findings Of Fact Petitioner is an attorney licensed to practice in the State of Florida since 1962. Since Petitioner's admission to the Bar, he has continuously practiced law in Live Oak, Florida. Petitioner is a senior partner in the law firm of Airth, Sellers, Lewis, and Decker, practicing at 105 North Ohio Avenue, Live Oak, Florida. Since September 1, 1975, Petitioner has served as the City Attorney for the City. The position of City Attorney is established by charter and the duties of City Attorney are provided in the charter. Like other appointed (Non- elective) City Officers, the Petitioner has a definite term of office and can be removed only for cause. Petitioner's compensation is fixed by City ordinance and currently is $600.00 per month which is a budgeted position and paid from City's regular salaries and wage account. Petitioner also receives additional sums for special services (litigation) he handles for the City. Retirement contributions are made by City based on the $600.00 per month compensation. Petitioner has not claimed any retirement credit for the special services he performs for the City. Deductions are made for federal income taxes and social security from Petitioner's regular compensation but not from compensation paid for special services. Petitioner's "regular legal work" for which he receives a regular monthly compensation consists of: Attendance at City Council (Council) meetings; advice on matters that arise at those meetings; legal opinions on questions presented by the Council or Mayor; independent investigation of, and advice to Council on, situations that may have legal implications for the City; and all other legal work which the Council might request him to do, other than litigation. Petitioner's second type of legal representation is litigation. Petitioner's litigation assignments are given to him by the Mayor or the Council. Petitioner handles all litigation assignments, unless on Petitioner's advice, the Council determines it is appropriate that they obtain different counsel or co-counsel, either with more expertise in a particular area of law, or with offices closest to where the litigation, or part of it, is taking place. Petitioner does not accrue sick or annual leave, but is paid his regular compensation when ill or on vacation because his responsibilities continue. When Petitioner is unable to attend council meetings the Council is not represented at that meeting by another member of the firm, it being the sole responsibility of Petitioner to represent the Council at Council meetings. The Council does not control the day to day methods in which Petitioner considers cases and performs legal judgments, nor does the Council prescribe the manner in which work should be executed in those cases. Other than scheduled Council meetings, Petitioner is not required to maintain regular office hours established by the Council. Petitioner has no budgeted office at the City's offices. The City's staff and typewriters are available to Petitioner for typing and other needs, but he has no authority over any City staff. Petitioner generally uses his private law office staff and word processor for City work. Petitioner's law office is not a budgeted City office. Petitioner uses an office at the City's offices that is also used by Council members and receives some of his mail at the City's offices. As for fringe benefits, Petitioner receives life and health insurance benefits received by other City employees. In addition, Petitioner has complied with the City's request that he participate in several associations and conventions dealing with problems faced by the City. The Council reimburses his travel expenses and pays the membership dues for him. While these arrangements could perhaps be viewed as fringe benefits, Petitioner's participation seems to be a condition of continued employment. Notices of tort claims against the City may be given to Petitioner. Until repealed by law in 1978, Petitioner's duties included the collection of delinquent taxes due the City as a Deputy Tax Collector. Petitioner, upon request of the Bureau of Fire Prevention, shall assist the inspectors in the investigation of any fire which, in the opinion of the fire inspectors, is of suspicious origin. All officers (and employees) of the City are compulsorily required to be enrolled in FRS. However, consultants and professional persons on contract as independent contractors are ineligible for membership in FRS. Since October 1, 1971, the City has participated in FRS. The position of Sanitary Inspector has been abolished within the City. Although the position of City Attorney is vested with corporate authority of the City along with other officers pursuant to Section 1, Chapter 57-1538, Laws of Florida, the record does not reflect that Petitioner exercises any powers of the sovereignty of the City. The Council and Mayor constitute the governing body of the City. Petitioner's initial enrollment in FRS on September 1, 1975 was accomplished by Petitioner's completion and filing of Respondent's FRS form with City. The City in turn forwarded the form to Respondent and began reporting Petitioner on its payrolls. There is no evidence that the initial FRS entry form, filed with Respondent, described Petitioner's work duties or the nature of his employment with the City. Both the City and Respondent enrolled Petitioner in the FRS, believing that Petitioner was eligible for membership. The Respondent did not question or investigate the nature of Petitioner's employment relationship with the City until 1983. As part of Respondent's review process (which was designed to review the actual employment of professional persons), it learned some of the details of Petitioner's engagement with the City on November 30, 1983, when Petitioner (in a response to Respondent's questionnaire by the City) was identified as a professional person under contract. Following a more detailed description of Petitioner's position from the City and Petitioner, the Respondent notified Petitioner on November 1, 1984, that he was ineligible for participation in the FRS. Subsequent to the decision in Potter v. State Department of Administration, 459 So. 2d 1170 (Fla. 2d DCA 1984), the Respondent has informed Petitioner that the effective date of his removal from FRS will be December 1, 1984. Although Respondent stipulated that because of Potter it would not terminate Petitioner until December 1, 1984, there was no stipulation that Petitioner was eligible during any period of time.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent enter a final order declaring Petitioner, Ernest A. Sellers ineligible for membership in the Florida Retirement System effective December 1, 1984. Respectfully submitted and entered this 22nd day of August, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1985.
Findings Of Fact Tooze holds certificate number R-0434 as a Certified Public Accountant practicing in the State of Florida and held such certificate in good standing on January 1, 1974. At that time, Tooze was subject to professional certification requirements set forth in Chapter 473, Florida Statutes. The records of the Board reflect that Tooze provided no evidence of the completion of any courses or studies that would give him credits toward the reestablishment of his professional competency in the period between January 1, 1974, and April 2, 1977. On October 15, 1976, Tooze sat for an examination which was approved by the Board and given to practicing Certified Public Accountants pursuant to applicable law requiring re- establishment of professional competency. Tooze received a score of 64 out of a possible score of 100. The established passing grade for the examination is 75. Tooze received nine credit hours for the examination he took. On May 13, 1977, the Board suspended Tooze's certificate R-0434 as a Certified Public Accountant for failing to comply with requirements for the reestablishment of his professional knowledge and competency to practice public accounting. The questions to be answered in the uniform written professional examination administered to Tooze on October 15, 1976, were based upon "Current Authoritative Literature" which included Accounting Principles Board's Opinions, Accounting Research Bulletins, Statements and Interpretations of the Financial Accounting standards Board, Statements on Auditing standards, and the Laws and Rules of the Florida State Board of Accountancy. Tooze challenges sixteen of these one hundred questions on the grounds that the approved answers are incorrect and that the answer selected by Tooze is the proper choice. The questions attacked by Tooze are numbers 13, IS, 18, 51, 56, 61, 63, 67, 72, 74, 78, 80, 82, 95, 96 and 99. The title of the uniform written professional examination is "Examination of Current Authoritative Accounting and Auditing Literature and Rules of the Florida State Board of Accountancy. The approved answer to each of the questions on the examination is that which is mandated by the "Current Authoritative Literature." The examination does not purport to seek answers outside of the requirements of the Current Authoritative Literature. Each of the approved answers in the sixteen questions listed above are consistent with the demands of the Current Authoritative Literature. Each of Tooze's answers is contrary to the provisions of the Current Authoritative Literature. Accordingly, the answers selected by Tooze are not the best answers and were properly graded incorrect on his examination answer sheet.
The Issue Whether or not existing Rule 21A-20.012 F.A.C. is an invalid exercise of delegated legislative authority. See, Sections 120.52(8) and 120.56 F.S.
Findings Of Fact Petitioner Silvia S. Ibanez is a practicing attorney and a member of the Florida Bar, and holds active Florida CPA License No. 10842, currently in good standing. She is also a Registered Investment Advisor with the Florida Division of Securities and a certified financial planner (CFP). She has been charged with violating Rule 21A-20.012 F.A.C. in DOAH Case No. 91-4100 which is currently pending before the Division of Administrative Hearings. As a licensee with the federal Securities and Exchange Commission, Petitioner is required to, and does, disclose the fact that she is a CPA. Petitioner Ibanez is listed in the yellow pages under the heading "Attorneys" as "Ibanez, Silvia, S., CPA, CFP." On its face, there is nothing false or fraudulent about this listing. As an attorney, Petitioner also places CPA after her name on her business cards and on her letterhead. Respondent contends that because Petitioner "holds out" to the public as a CPA, uses accounting skills, and provides one or more types of management, advisory, or consulting services, she is currently "practicing public accounting." Intervenor James R. Brewster is also a practicing attorney, a Board- certified tax lawyer, and a member of the Florida Bar, and holds an active Florida CPA license. Mr. Brewster has been charged with violating Rule 21A- 20.012 F.A.C. in DOAH Case No. 90-3278 which is currently pending before the Division of Administrative Hearings. The administrative complaint therein charges violations of Rule 21A-20.012 F.A.C. and Sections 473.323(1)(a), (g), and (h) F.S. on the basis that Brewster's law firm letterhead designates him as a "CPA" and the law firm is not licensed by the Board of Accountancy as a public accounting firm. Intervenor American Association of Attorney Public Accountants (AAA- CPA) is a not-for-profit corporation with its principal place of business in Mission Viejo, California. Founded in 1964, the AAA-CPA is an active professional organization of persons dually qualified as both attorneys and CPAs. Its membership is comprised of practitioners in public accounting, law, government, education, and other activities. One of the functions of the AAA- CPA is to engage in the analysis and discussion of ethical and other issues related to practitioners who are dually licensed in the accounting and law professions. This includes monitoring and commenting upon legislation affecting the practice of law and public accountancy and participating in the development of ethical standards of lawyers and CPAs. AAA-CPA's substantial interests are affected by this proceeding in that its members are CPAs who are directly affected by the definition, scope, and regulation of the practice of public accounting by Florida statutes and rules. Respondent Board of Accountancy is an agency of the State of Florida established pursuant to the provisions of Chapter 473 F.S. Pursuant to Section 473.301 F.S., the Board is authorized in the following language to regulate the "practice of public accounting": Purpose.--The Legislature recognizes that there is a public need for independent and objective public accountants and that it is necessary to regulate the practice of public accounting to assure the minimum competence of practitioners and the accuracy of audit statements upon which the public relies and to protect the public from dishonest practitioners and, therefore, deems it necessary in the interest of public welfare to regulate the practice of public accountancy in this state. Respondent Department of Professional Regulation is an umbrella agency for the Board of Accountancy, established under the provisions of Section 20.16 and Chapter 455 F.S. Intervenor Florida Institute of Certified Public Accountants (FICPA) is a Florida not-for-profit corporation with its principal place of business in Tallahassee. Founded in 1905, the FICPA is an active professional organization with approximately 17,800 members. Its membership is comprised of practitioners in public accounting, industry, government, education, law, and other activities. One of the functions of the FICPA is to engage in the analysis and discussion of issues related to the accounting profession. This includes monitoring the scope of services provided by certified public accountants in Florida and throughout the United States, monitoring legislation affecting the practice of public accountancy, and participating in the development of auditing, accounting, and ethical standards of CPAs. Intervenor FICPA's substantial interests are affected by this proceeding in that its members are CPAs who are directly affected by the definition, scope, and regulation of the practice of public accounting by Florida statutes and rules. It is even recognized in the statute. See, Section 473.302 F.S., infra. Challenged existing Rule 21A-20.012 F.A.C., also referred to as the "holding out" rule, provides as follows: 21A-20.012 Holding Out. "Holding himself or itself out" as used in Section 473.302(4), F.S. is defined as publicizing that the licensee is a certified public accountant when providing, or offering to provide services or products to the public, in such a manner that an uninformed person may not be able to differentiate whether or not the licensee may also be in the practice of public accounting. The display of the CPA certificate and license issued by the Department of Professional Regulation shall not constitute holding out under the terms of this rule. All other publication of the fact that a licensee is a CPA constitutes holding oneself out. The specific statutory authorities currently cited by the agency for the rule are Sections 473.302, 473.304 and 473.307 F.S. and the law implemented is cited as Section 473.302 F.S. Section 473.307, dealing with "experience," does not impinge on these proceedings. The remaining authorities provide as follows: Definitions.--As used in this act: "Board" means the Board of Accountancy. "Department" means the Department of Professional Regulation. "Certified public accountant" means a person who holds a license to practice public accounting in this state under the authority of this act. "Practice of," "practicing public accountancy," or "public accounting" means: Offering to perform or performing for the public one or more types of services involving the use of accounting skills or one or more types of management advisory consulting services, by a certified public accountant or firm of certified public accountants, of this state, including the performance of such services in the employ of another person; or Offering to perform or performing for the public one or more types of services involving the use of accounting skills or one or more types of management advisory or consulting services, by any other person holding himself or itself out as a certified public accountant or firm of certified public accountants, including the performance of such services by a certified public accountant in the employ of a person so holding himself or itself out. However, these terms shall not include services provided by the American Institute of Certified Public Accountants, the Florida Institute of Certified Public Accountants, or any full service association of certified public accounting firms whose plans of administration have been approved by the board, to their members or services performed by these entities in reviewing the services provided to the public by members of these entities. [Emphasis supplied] 473.304 Rules of board.--The board shall adopt all rules necessary to administer this act. Every licensee shall be governed and controlled by this act and the rules adopted by the Board. Also relevant to these proceedings is Section 473.322 F.S. which provides as follows: 473.322 Prohibitions; penalties.-- No person shall knowingly: Practice public accounting unless the person is a certified public accountant or a public accountant; Assume or use the titles or designations "certified public accountant" or "public accountant" or the abbreviations "C.P.A." or any other title, designation, words, letters, abbreviations, sign, card, or device tending to indicate that such person holds an active license under this act, unless such person holds an active license under this act; Attest as an expert in accountancy to the reliability or fairness of presentation of financial information or utilize any form of disclaimer of opinion which is intended or conventionally understood to convey an assurance of reliability as to matters not specifically disclaimed unless such person holds an active license under this act. This subsection shall not prevent the performance by persons other than certified public accountants of other services involving the use of accounting skills including the preparation of tax returns and the preparation of financial statements without expression of opinion thereon. Present as his own the license of another; Give false or forged evidence to the board or a member thereof for the purpose of obtaining a license; Use or attempt to use a public accounting license which has been suspended, revoked, or placed on inactive status; Employ unlicensed persons to practice public accounting; or Conceal information relative to violations of this act. Any person who violates any provisions of this section is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. [Emphasis supplied] Although it has not been challenged, Rule 21A-21.009 F.A.C., the "other business activity rule," is relevant to these proceedings. That existing rule currently provides as follows: 21A-21.009 Other Business Activities. A licensee engaged in the practice of public accounting may concurrently engage in another business, occupation, or profession if: The licensee does not hold himself out as a certified public accountant in that activity, The activity is conducted under a name which the public will not associate with licensee's practice of public accounting, The other business, occupation, or profession is not used to promote the practice of public accounting in any manner prohibited by Chapter 473, F.S., Facilities used by the licensee in his public accounting practice and other activity conform to the requirements of 21A-26.001(3), The entity's dealings with the licensee's public accounting clients shall not violate the provisions of Chapter 473, F.S., and 21A, Florida Administrative Code, relating to integrity and objectivity, The entity does not interpret financial statements, forecasts or projections audited, reviewed, compiled or prepared by others. [Emphasis supplied] Although it has not been challenged, Rule 21A-20.011 F.A.C. is relevant to these proceedings. That existing rule currently provides as follows: 21A-20.011 Practice of, or Practicing Public Accountancy. "Practice of, or practicing public accountancy" as defined by Section 473.302(4), F.S., shall exclude any of the following: Services rendered by a licensee as an employee of a governmental unit or an employee rendering accounting services only to his employer as long as that employer is not required to be licensed under F.S. 473, or Activities of licensees who do not hold themselves out as CPAs and who are not associated with financial statements, or Activities of licensees who do not hold themselves out as certified public accountants. [Emphasis supplied] Petitioner's and Intervenor Brewster's CPA certificates (like all Florida CPA certificates) authorize them to display their CPA credentials. The CPA certificate represents that the recipient . . . has passed all examinations and has met all other requirements prescribed by law and by rule of this board for certification as an expert public accountant, and is therefore entitled to append the letters CPA after this registrant's name to evidence registration by this board as a Certified Public Accountant. [Emphasis supplied] The Board's only classifications of CPA licenses/licensees are "active" or "inactive." "Active" and "inactive" refer to the status of the CPA license and do not refer to or imply that the licensee is actively practicing public accounting. One can be an actively licensed CPA and not be practicing public accounting. Attainment of the CPA credential is an accomplishment that is recognized in the business community. The CPA credential of a Florida-licensed CPA connotes high competency and achievement levels in the discipline of accounting. Truthful communication of the CPA credential by actively licensed CPAs for identification purposes constitutes valuable disclosure to the public. The use of the term "CPA" implies a specific competency to the public. The fact that Petitioner Ibanez or Intervenor Brewster is a CPA is valuable to their respective legal clients. CPA status is a valuable property right to each CPA, and the ability of a practicing attorney to publicize the fact that s/he also holds an active CPA license is a valuable asset to that individual. It is conceded by all parties that it is possible to practice law and public accounting in the same business activity. There are firms that simultaneously hold themselves out as law firms and public accounting firms. The activities of other regulated professionals, such as members of the Florida Bar, which overlap those of practicing CPAs are subject to the regulatory standards of their principal regulated professions and applicable judicial and administrative remedies for malpractice and negligence. It is conceded by all parties that many activities conducted by professionals and nonprofessionals, other than by CPAs and other than by attorneys, are identical to activities performed by CPAs engaged in public accounting. For instance, anyone can legally prepare a tax return. Bookkeepers and free-lance tax assistors of all sorts are unregulated in any way. The only activity among public accounting activities that is a unique activity of CPAs is the "attest" function. See, Section 473.322(1)(c) F.S. Truthful use, communication, or disclosure of the CPA credential by an actively licensed CPA does not per se constitute false, misleading, or deceptive advertising. The evidence does not support a finding that withholding truthful disclosure that one has earned the CPA credential benefits the public welfare or effects the purposes of the enabling legislation, or indeed, how such nondisclosure could promote them, particularly since it has been shown that persons of considerably lesser competency and achievement levels in the discipline of accounting may legally offer to the public almost all the services provided by CPAs. Prior to 1984, when the "holding out" rule was adopted, a Florida- licensed CPA who offered one or more types of accounting services to the public or who offered one or more types of management advisory or consulting services to the public was considered to be "practicing public accountancy," whether or not that person appended the initials "CPA" after his or her name. The "holding out" rule became effective on September 17, 1984. Chapter 89-87 Laws of Florida amended Section 473.302(4) F.S. (i.e., the definition of public accountancy) but the amendment did not change the previously existing "holding out" language therein. The "holding out" rule was adopted more than one year before the initiation of this rule challenge. There is no dispute among the parties that the definition within the challenged Rule 21A-20.012 F.A.C. is circular. In attempting to define the term "holding out" so that the use of that term in Section 473.302(4) F.S. may be clarified, the rule incorporates the statutory phrase "practice of public accounting," and the term "practice of public accountancy/accounting" in Section 473.302(4)(b) F.S. incorporates the term "holding out," 1/ as does Rule 21A- F.A.C., 2/ which creates exemptions to the statute. At least one purpose of the second sentence of the existing rule seems to have been to allow all CPAs to display their CPA certificates on their inner office walls without fear of disciplinary action by the Board. The Board's expressed rationale for excluding "display of a CPA certificate" from its "holding out" rule is premised on the fact that during an office visit, a CPA can immediately disabuse any individual of the fact that s/he is practicing public accounting once that individual is inside the CPA's office. However, Petitioner demonstrated, and the Board conceded, that an individual may have the opportunity to disabuse members of the public that s/he is engaged in the activity of the practice of public accounting or that s/he is offering all the services normally associated with a CPA, as opposed to law or some other profession, at least where there is direct contact by letter or telephone. Clearly, there are many ways a nonattesting, actively licensed CPA who is dually licensed can clarify to those seeking his or her services which profession, function, or service s/he is willing to perform for that client. On the other hand, the challenged rule does not deal with all members of the public, or members of the public specifically seeking CPA services, or members of the public seeking some other service. The rule deals with "uninformed persons." As used in the rule, the term "uninformed person" is undefined and has been subject to differing speculative interpretations by the Board and by non-Board witnesses, some of which interpretations address such broad categories as anyone using a telephone book. The Board also suggested that only display of the original CPA certificate on an inside office wall would be exempt from prosecution for publication, but a reasonable person could interpret the rule on its face to permit posting the CPA certificate or an exact facsimile of the certificate on a sign outside an office building or circulating as business cards exact reduced- size copies of the certificate even though these types of "publication" or "display" would not provide the same opportunity as an office visit would provide for the CPA to disclose to individuals the actual services the CPA was offering to perform. Accordingly, there has been no rational basis for the "holding out" rule's distinction between "display" of the licensee's CPA certificate and other forms of truthful, nonmisleading publication of the CPA licensure/status. The agency's expressed rationale behind its adoption of the "holding out" rule was to define the meaning of the statutory term "holding out," as used in Section 473.302(4) F.S., a term which has also been adopted into a number of other rules (see, supra), so as to provide guidance on when a person who has been licensed as a CPA is engaged in the "practice of public accounting." Specifically, the Board maintained that the "holding out rule" and the "other business activity rule" give licensees two options. Under the first option, the "holding out" rule permits licensees to retain their CPA certificates when not in compliance with all of the provisions of Chapter 473 F.S. and the rules promulgated thereunder, as long as they do not publicize themselves as CPAs. Alternatively, the Board perceives that under the second option, if licensees do publicize themselves as CPAs when performing services for the public, licensees become subject to regulation by the Board and are held to the standards of competency and conduct which are applicable to all CPAs who use their accounting skills for the public while trading on the fact of their licensure as a Florida CPA. However, the words "publicizing" and "publication" as used in the "holding out" rule are also undefined. Although Respondents submitted that the "common usage" of these words is sufficient to embrace listings in the yellow pages, it is also quite possible to give these words a far broader reading to encompass the "assumption" and "use" of the designation "CPA" and the "assumption" and "use" of the CPA credential, which "assumption" and "use" are specifically reserved to all actively licensed CPAs and which designation is permitted to be inserted after their names on signs, cards, or devices by Section 473.322(1)(b) F.S. [see Finding of Fact No. 11] and by the CPA certificate itself which permits them to "append" CPA after their names [see Finding of Fact No. 14]. The rule has actually subjected CPAs, and specifically has subjected Petitioner and Intervenor Brewster, to DPR disciplinary proceedings independent of any other act or wrongdoing merely for any "publication" of the CPA credential in a form other than display of the original CPA certificate on an inner office wall. The rule may automatically subject attorney-CPA licensees to DPR disciplinary proceedings independent of any other act or wrongdoing merely on the basis of passive, truthful communications which are otherwise in full compliance with the standards of the Florida Supreme Court and Florida Bar. The rule has the potential for being interpreted so as to prohibit CPAs such as Petitioner and Intervenor Brewster from making disclosures of their earned status as CPAs to various regulatory bodies to which they are required by law to disclose that information. See, Findings of Fact 1 and 2, supra. The rule can be invoked to limit their income by chilling their appearances as expert CPA witnesses for a fee even if they never work for an uninformed layman at all. Applicants for certain state employments and candidates for public office may run afoul of the rule due to the disclosure requirements of public office. Even at risk is the CPA called as a factual witness who is then sworn to tell the truth and asked innocuous biographical information. One's desire to attain a CPA credential may be chilled by the hazard of using it. Chapter 473 F.S. contains limitations on competitive negotiation, prohibits accepting contingent fees, prohibits the payment of certain commissions, and establishes other prohibitions to which persons who are deemed to be "practicing public accountancy" must adhere. Some of these prohibitions are contrary to normal, ethical practice of other professions, i.e., acceptance of contingent fees by lawyers. If the rule remains intact, the Board and DPR under Chapters 473 and 455 F.S. have the potential of breaching the confidentiality of CPA-attorneys' legal clients' files. See, Section 473.316(5) and 473.318 F.S. Since attorneys are exclusively overseen by the Florida Supreme Court, the rule potentially violates the doctrine of "separation of powers" among the three branches of state government. Therefore, the definitional rule creates a wedge whereby the Board may insinuate its discipline into other professions and confuses dually licensed CPAs from knowing how they may behave in each profession without running afoul of discipline in the other. In application with other rules, the "holding out" rule sets confusing and varying standards for agency decisions involving attorneys, bankers, CPAs employed by private corporate employers, and CPAs with their own financial consultant firms. The Board of Accountancy has issued a series of letter opinions based on the "holding out rule" or based on that rule read in conjunction with Rule 21A-21.009 F.A.C., the "other business activity rule," which indicate that a Florida CPA who does not "hold out" to the public as a CPA and who is not associated with financial statements is permitted by the Board to engage in other business activities without complying with the provisions of Chapter 473 F.S., that is, not being subject to DPR discipline, because the Board does not view that CPA in those activities as "practicing public accountancy." Also, the Board of Accountancy has issued a series of opinions to the effect that, by virtue of Section 473.302(4) F.S. and the "holding out rule," a CPA who "holds out" (publicizes his or her status as a CPA) is automatically, by definition, "practicing public accounting," regardless of what actual business activity s/he is performing. These opinions also indirectly insinuate the Board of Accountancy into many other professions, including the practice of law, which the Board has no statutory mandate to regulate pursuant to Section 473.301 F.S. The plethora of opinions issued by the Board dramatize the confusion experienced by CPAs who have sought to have the Board interpret the rule in question on a case-by-case basis. Testimony of the Chairman of the Board was offered to establish that absent the challenged rule, the Board cannot reasonably regulate negligence in the profession and that absent the rule, only fraud could be prosecuted by the Board. He testified that, in his opinion, the challenged rule means that a CPA performing tax services for a client is not doing "public accounting" if "CPA" is not appended after the CPA's name in advertising and that that CPA cannot be disciplined by the Board for negligence, any more than he could be disciplined if he were a non-CPA doing tax services. The Chairman further opined that a CPA doing tax services is doing public accounting only if he appends CPA after his name, and in that instance, the Board can and will discipline that CPA for negligence, should he commit any. Further, the Chairman indicated that if Rules 21A-21.009, 21A-20.011, and 21A-20.012 F.A.C. were not simultaneously in place, the actively licensed CPA who places CPA after his name could not be disciplined by the Board for negligence, but only for fraud. Precisely how this would occur was not made clear, but upon the foregoing, together with the Board opinions admitted in evidence, it is concluded that the Board has utilized what purports to be purely a definitional rule to establish disciplinary jurisdiction and that in certain instances the rule puts DPR in the precarious position of only being able to prosecute CPAs with "CPA" appended after their names, but not CPAs who perform the same services and who do not append "CPA" after their names. Such a result is nonsensical. The Board does not seriously suggest that if Rule 21A-20.012 F.A.C. is invalidated, Rule 21A-20.011 would provide a blanket exclusion from all provisions of Chapter 473 F.S. for CPAs "using" or "assuming" or "publicizing" their status. At a minimum, such CPAs would have to maintain their credential as would any other CPA for good character, payment of fees, and recertification for competency based on continuing education. What has actually occurred here is that the Board has consciously utilized Rules 21A-20.011 and 21A-20.012 F.A.C. so as to not enforce Section 473.302(4)(a) as written and so as to selectively enforce only Section 473.302(4)(b) F.S. Then, by its selective enforcement of Rule 21A-20.012, the Board has gone a step further. The Board has "interpreted" Section 473.302(4)(b) to include within Board jurisdiction not those functions, activities, or skills a CPA practices or holds out to the public for a fee as constituting "practicing public accountancy" but has made the definition of "practicing public accountancy" encompass any disclosure of CPA status or skill attainment, regardless of the disclosure's truth and regardless of whether or not the CPA is utilizing any of the functions, activities, or skills of a CPA. By so doing, the Board has exceeded its statutory mandate and legislative purpose as set forth in Section 473.301 F.S. On its face, Rule 21A-20.012 F.A.C. consists of three sentences, which, in relationship to each other, are inconsistent and contradictory. Specifically, sentence ONE seems to be based on the overall representation made by a CPA to "uninformed persons." It simultaneously presumes fraud in the communication of what otherwise would be truthful, passive information. 3/ Sentence THREE subjects the CPA to discipline absent any fraud and totally without consideration to the impression formed by "uninformed persons" from the use of the CPA designation in any manner other than display of the certificate. 4/ Because there are two incompatible definitions in the challenged rule as now drafted, the Board is at liberty to selectively enforce the statute. One CPA could be prosecuted for simple disclosure of credential status or neutral biographical information (Ibanez). Another CPA might be prosecuted only after examination of the totality of his circumstances to determine if the circumstances mislead "uninformed persons" into believing he abides by all the regulations promulgated under Chapter 473 F.S., and still another CPA would never be prosecuted unless he performs the attest function. This is nonsensical and clearly unfair.
The Issue Whether Petitioner was the subject of an unlawful employment practice as defined in Chapter 760, Florida Statutes.
Findings Of Fact In July of 2006, Respondent advertised an opening for an Accountant II, position #70557, in its revenue and contracts division. The primary responsibility in the position was accounting for and paying or reimbursing expenses in state programs that were funded through federal money by drawing down the accounts in which the federal funds were maintained. Therefore, among other things, the position required accounting experience and a working knowledge of FLAIR. FLAIR is the computerized accounting and records system used by all state agencies in the State of Florida. The vacant position required significant knowledge and experience in both the accounting codes utilized in FLAIR and the computer screens associated with those codes. Additionally, there was a critical need to immediately fill the position with an experienced person because of the involvement with federal funds and due to the fact that another employee, Deborah Schimmel, was performing the work required in her position, as well as, the work required in the vacant position. In 2006, Petitioner, who is Caucasian and 67 years old, applied for the Accountant II position with Respondent. As part of the application process, Petitioner answered a series of qualifying questions relevant to the vacant position. The questions were used by Respondent to help with preliminary screening of the applicants. Some of the questions involved the applicants’ experience with FLAIR, grants and revenue. Petitioner answered the qualifying questions and indicated he had one year of experience with FLAIR, a college degree in accounting and experience with grants. There were four other applicants for the position. Petitioner did not know the race of any of the other applicants for the position and did not offer any evidence regarding the race of these individuals. Salwa Soliman, the Commission’s Revenue and Contracts Manager, was advised that the Accountant II position was vacant and had been advertised. She was also aware that the position needed to be filled as soon as possible with a person who could perform the accounting and billing duties of that position with little or no training. Ms. Soliman reviewed the applications for the vacant position. Based on a review of his application and qualifying questions, Petitioner was granted an interview because he was a veteran, held a bachelor's degree in accounting, had revenue experience and had experience with FLAIR. On October 13, 2006, Petitioner was interviewed for the position by Ms. Soliman and Ms. Schimmel. During Petitioner's interview, it was clear that Petitioner's experience with revenue related to tax returns and not grants. Likewise, Petitioner's experience with grants was only in writing or applying for grants. He had not billed or disbursed federal money from such grants. More importantly, Petitioner's experience with FLAIR was “view only” experience. “View only” experience or authorization meant that Petitioner was only able to view or look at certain screens but not input data or change the screens in FLAIR. Thus, Petitioner did not have experience with data input to FLAIR and/or the pull-down menus associated with such input. In short, Petitioner’s experience and skills did not relate to the work required in the position at issue. Neither tax experience nor grant writing experience was the type of revenue experience required for the vacant position. Additionally, Petitioner did not have sufficient experience or working knowledge of FLAIR to enable him to fill the position with little or no training. Petitioner was not hired for the position. In all likelihood, Petitioner could have been trained for the position. However, due to the nature of the position, Respondent reasonably wanted to hire a person who could immediately fill it. Indeed, none of the applicants for the position were hired because no person had the necessary working knowledge of FLAIR and grant billing to fill the Accountant II position immediately with little or no training required. There was no evidence that Respondent’s reasons for not hiring Petitioner were unreasonable or a pretext for discriminating against Petitioner. When a batch of applicants does not meet Respondent’s needs for a vacant position, Respondent’s policy was to review any applications for other employment opportunities with Respondent submitted within six months of the closing date of the job announcement for the current vacancy. Because of the critical need to fill the Accounting II position, Ms. Soliman asked that other previously submitted applications be forwarded to her by Respondent’s personnel department. In order to transfer an application from one job posting to another job posting, People’s First, the State’s contractor for some personnel matters, must transfer the previously filed application in its database to the file for the current vacancy. Other than requesting the transfer of the application, Respondent is not involved in the actions necessary to transfer an application to another file for a vacant position. In this case, Respondent’s personnel department requested People’s First to transfer applications from an earlier-filled Accountant II position with Respondent. One of the transferred applications was from Debra Shriver who was 23 years old and Caucasian. For unknown reasons, in the computer process of transferring the application, the date on Ms. Shriver’s application was changed. The evidence was clear that Respondent did not ask for or cause the date on Ms. Shriver’s application to change. In fact, the change in the application’s date was immaterial to Respondent’s criteria or requirements in filling the position at issue here and does not demonstrate any fraud, falsification or misrepresentation on the part of Respondent in filling the position. Based on her application, Ms. Soliman interviewed Ms. Shriver for the vacant position. The evidence was clear that Ms. Shriver had the experience and knowledge being sought and required for the position at issue. She was currently working in the grant billing division in another state agency and had significant experience and working knowledge of FLAIR as it relates to grants and billing. Ms. Soliman had worked with the successful candidate before but they were not personal friends. Ms. Soliman knew that Ms. Shriver was a competent employee. Based on these facts, Ms. Shriver was hired for the vacant position and did not require significant training once she began working in that position. There was no evidence that Ms. Shriver’s selection was based on her race or her age. She was selected based on her qualifications to immediately perform in the position for which she was hired. Likewise, there was no evidence that Petitioner was not hired based on his race, which was the same as Ms. Shriver’s, or his age. Petitioner was not hired because he did not have the experience necessary to enable him to immediately begin performing the duties of the position for which he applied. Finally, there was no evidence that Petitioner’s requirements for selecting a person to fill the vacant position or for selecting Ms. Shriver were unreasonable or a pretext for discrimination against Petitioner. Therefore, the Petition for Relief should be dismissed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is therefore RECOMMENDED that a final Order be entered by the Florida Commission on Human Relations dismissing the Petition for Relief in its entirety. DONE AND ENTERED this 8th day of April, 2008, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 2008. COPIES FURNISHED: Albert H. Beddy 7281 Sycamore Road Quincy, Florida 32351 Stan M. Warden, Esquire Emily J. Norton, Esquire Florida Fish and Wildlife Conservation Commission 620 South Meridian Street Tallahassee, Florida 32399-1600 Ken D. Haddad, Executive Director Florida Fish and Wildlife Conservation Commission Farris Bryant Building 620 South Meridian Street Tallahassee, Florida 32399-1600 James V. Antista, General Counsel Florida Fish and Wildlife Conservation Commission Farris Bryant Building 620 South Meridian Street Tallahassee, Florida 32399-1600 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact Pursuant to a stipulation, the following facts are found. Petitioner is a West Virginia corporation, organized under the laws of that state on January 4, 1958. Prior to June 1, 1962, it operated an automobile dealership in Huntington, West Virginia. On June 1, 9162, Petitioner exchanged assets of its automobile dealership for fifty (50 percent) percent of the capital stock of Dutch Miller Chevrolet, Inc., a West Virginia corporation organized to succeed the automobile dealership formerly operated by the Petitioner. Prior thereto, in 1961, the Petitioner had acquired one hundred percent (100 percent) of the capital stock in Palm Beach Motors (the name of which was changed on August 10, 1961 to Roger Dean Chevrolet, Inc.). Roger Dean Chevrolet, Inc. is a wholly owned subsidiary of the Petitioner which operated on property owned by the Petitioner. The years involved herein are the fiscal years ending December 31, 1972 and 1973, during which years the Petitioner's principal income (except for the gain involved herein) consisted of rents received from Roger Dean Chevrolet, Inc. Petitioner and its subsidiary filed consolidated returns for the years involved. During the fiscal year ending December 31, 1972, Petitioner sold its stock in Dutch Miller Chevrolet, Inc. to an unrelated third party for a gain determined by the Respondent to be in the amount of $349,217.00, which, although the sale took place out of the State of Florida, the Respondent has determined to be taxable under the Florida Income Tax Code* (Chapter 220, Florida Statutes). In the fiscal years ending December 31, 1972 and 1973, Petitioner included in Florida taxable income, the amounts of $76.00 and $6,245.00, respectively, from the sale of property on April 23, 1971, such gain being reported for federal income tax purposes on the installment method under Section 453 of the Internal Revenue Code of 1954. Roger H. Dean, individually or by attribution during the years involved herein, was the owner of one hundred (100 percent) percent of the stock of Roger Dean Enterprises, Inc. and seventy-five (75 percent) percent of the stock of Florida Chrysler-Plymouth, Inc. The remaining twenty-five (25 percent) percent of Florida Chrysler-Plymouth, Inc. was owned by Robert S. Cuillo, an unrelated person. The Respondent disallowed the $5,000.00 exemption to the Petitioner in computing its Florida corporate income tax for each of the years in question on the theory that the two corporations were members of a controlled group of corporations, as defined in Section 1563 of the Internal Revenue Code of 1954. By letter dated April 13, 1976, the Respondent advised Petitioner of its proposed deficiencies for the fiscal years ending December 31, 1972 and 1973, in the respective amounts of $19,086.25 and $1,086.79. Within sixty (60) days thereafter (on or about May 10, 1976), Petitioner filed its written protest in response thereto. By letter dated May 27, 1976, the Respondent rejected the Petitioner's position as to the stock sale gain and exemption issues. Thereafter on September 17, 1976, a subsequent oral argument was presented at a conference held between the parties' representatives in Tallahassee, and by letter dated September 23, 1976, Respondent again rejected Petitioner's position on all pending issues raised herein. The issues posed herein are as follows: Whether under the Florida Corporate income tax code, amounts derived as gain from a sale of intangible personal property situated out of the State of *Herein sometimes referred to as the Code. Florida are properly included in the tax base of a corporation subject to the Florida code. Whether amounts derived as installments during tax years ending after January 1, 1972, from a sale made prior to that date are properly included in the tax base for Florida corporate income tax purposes. Whether two corporations one of whose stock is owned 100 percent by the same person who owns 75 percent of the stock in the other, with the remaining 25 percent of the stock in the second corporation being owned by an unrelated person, constitute members of a control group of corporations as defined by Section 1563 of the Internal Revenue Code of 1954. Many states, in determining corporate income tax liability, utilize a procedure generally referred to a "allocation" to determine which elements of income may be assigned and held to a particular jurisdiction, where a corporation does business in several jurisdictions. By this procedure, non- business income such as dividends, investment income, or capital gains from the sale of intangibles are assigned to the state of commercial domicile. This approach was specifically considered and rejected when Florida adopted its corporate income tax code. Thus, in its report of transmittal of the corporate income tax code to the legislature, at page 215, it was noted: "The staff draft does not attempt to allocate any items of income to the commercial domicile of a corporate taxpayer. It endeavors to apportion 100 percent of corporate net income, from whatever source derived, and to attribute to Florida its apportionable share of all the net income." Additional evidence of the legislature's intent in this area can be seen by noting that when the corporate income tax code was adopted, Florida repealed certain provisions of the Multi-state Tax Compact (an agreement for uniformity entered into among some twenty-five states). Thus, Article IV, Section (6)(c), a contained in Section 213.15, Florida Statutes, 1969, which previously read: "Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer's commercial domicile is in this state", was repealed by Chapter 71-980, Laws of Florida, concurrently with the adoption of the Corporate Income Tax Code. This approach has survived judicial scrutiny by several courts. See for example, Johns-Mansville Products Corp. v. Commissioner of Revenue Administration, 343 A.2d 221 (N.H. 1975) and Butler v. McColgan, 315 U.S. 501 (1942). Respecting its constitutional argument that amounts derived as installments during tax years subsequent to January 1, 1972, from a sale made prior to the enactment of the Florida Corporate Income Tax Code, the Petitioner concedes that the Code contemplates the result reached by the proposed assessment. However, it argues that in view of the constitutional prohibition which existed prior to enactment of the Code, no tax should now be levied based on pre-Code transactions. The Florida Supreme Court in the recent case of the Department of Revenue v. Leadership Housing, So.2d (Fla. 1977), Case No. 47,440 slip opinion p. 7 n. 4, cited with apparent approval the decision in Tiedmann v. Johnson, 316 A.2d 359 (Me. 1974). The court in Tiedmann, reasoned that the legislature adopted a "yard-stick" or measuring device approach by utilizing federal taxable income as a base, and reasoned that there was no retroactivity in taxing installments which were included currently in the federal tax base for the corresponding state year even though the sale may have been made in a prior year. The Respondent denied the Petitioner a $5,000.00 exemption based on its determination that the two corporations herein involved were members of a controlled group of corporations as defined in Section 1563 of the Internal Revenue Code. Chapter 220.14(4), Florida Statutes, reads in pertinent part that: "notwithstanding any other provisions of this code, not more than one exemption under this section shall be allowed to the Florida members of a controlled group of corporations, as defined in Section 1563 of the Internal Revenue Code with respect to taxable years ending on or after December 31, 1972, filing separate returns under this code." Petitioner's reliance on the case of Fairfax Auto Parts of Northern Virginia, 65 T.C. 798 (1976), for the proposition that the 25 percent ownership of an unrelated third party in one of the corporations precluded that corporation and the Petitioner from being considered a "controlled group of corporations" within the meaning of Section 1563 of the Internal Revenue Code, is misplaced in view of the recent reversal on appeal by the Fourth Circuit. Fairfax Auto Parts of Northern Virginia v. C.I.R., 548 F.2d 501 (4th C.A. 1977). Based thereon, it appears that the Respondent correctly determined that the Petitioner and Florida Chrysler-Plymouth, Inc., were members of the same controlled group of corporations as provided in Section 1563 of the Internal Revenue Code and therefore properly determined that Petitioner was not entitled to a separate exemption. Based on the legislature's specific rejection of the allocation concept and assuming arguendo, that Florida recognized allocation income for the sales of intangibles, it appears that based on the facts herein, Petitioner is commercially domiciled in Florida. Examination of the tax return submitted to the undersigned revealed that the Petitioner has no property or payroll outside the state of Florida. Accordingly, it is hereby recommended that the proposed deficiencies as established by the Respondent, Department of Revenue, be upheld in its entirety. RECOMMENDED this 7th day of July, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 David S. Meisel, Esquire 400 Royal Palm Way Palm Beach, Florida 33480 Thomas M. Mettler, Esquire 340 Royal Poinciana Plaza Palm Beach, Florida 33480
