The Issue The central issue in this case is whether the Respondent is guilty of the violation alleged in the administrative complaint dated August 7, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency authorized to regulate and discipline licensees pursuant to Chapters 455 and 473, Florida Statutes. The Respondent is a licensed certified public accountant, license number AC 3214 (election of rights submitted by Respondent). In connection with an investigation of another licensee (not at issue herein), the Respondent submitted to the Department a financial report that Respondent had performed for the entity identified as Moreil Interiors, Inc. (Moreil). That document (Department's exhibit 1) consisted of four pages and represented financial information related to Moreil for a 6 month period ending December 31, 1984. Certified public accounts 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. The financial report identified in paragraph 3 failed to comply with the SSARS in at least four material ways. The level of service indicated by the Respondent's report is not accepted practice for certified public accountants and has been rejected by the American Institute of Certified Public Accountants. The type and number of the deficiencies in that report constitute negligence on Respondent's part and establish a failure to exercise professional competence and due professional care in the performance of accounting services.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Board of Accountancy enter a final order requiring the Respondent to complete 24 hours of continuing education regarding compliance with the SSARS guidelines, and placing the Respondent on probation with his work to be reviewed, at his expense, by a consultant or certified public accountant approved by the Board, for a period of one year following completion of the continuing education. DONE and ORDERED this 19th day of July, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1990. COPIES FURNISHED: Tobi Pam Senior Attorney Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 Frank Berman P.O. Box 14156 North Palm Beach, Florida 33408 Martha Willis Executive Director Board of Accountancy Suite 16 4001 Northwest 43rd Street Gainesville, Florida 32606 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792
The Issue Whether the certificate of Respondent to practice public accounting in Florida should be revoked, annulled, withdrawn or suspended as indicated in the administrative complaint.
Findings Of Fact The parties stipulated to certain facts, as follow: That the Certificate Holder received an undergraduate degree in accounting from the University of Cincinnati in August of 1968. That the Certificate Holder was employed by major CPA firms from August of 1968 to September of 1970 as an accountant. That the Certificate Holder passed the uniform CPA exam in California in 1969, and was granted a CPA license by California upon completion of the necessary experience requirements in May of 1971. That the Certificate Holder attended law school at the Ohio State University from September 1970 through December 1972. In December 1972 he was awarded a Juris Doctor Degree from that institution. That prior to graduating from law school, the Certificate Holder made application to secure a position in accounting. He secured a position with the certified public accounting firm of Arthur Young and Co. in Cincinnati, Ohio, which position commenced on January 1, 1973. That while employed as a certified public accountant by Arthur Young and Co., the Certificate Holder, in the summer of 1973, was offered a position with a certified public accounting firm in Miami, Florida. That in July 1973 the Certificate Holder accepted that position with McClain and Co., CPA's of Miami, Florida, which position was to begin in August 1973. That during the summer of 1973, the Certificate Holder requested the Florida State Board of Accountancy to forward him an application to apply for a reciprocal CPA certificate and the Board responded that an application would not be sent to anyone who was not a resident of the State of Florida. That during the summer of 1973, the Certificate Holder made an application with the Florida Bar to become a member of the Florida Bar. That the Certificate Holder moved his family from Cincinnati, Ohio, to Fort Lauderdale, Florida, in July 1973 and began working on a full-time basis for the Florida CPA firm of McClain and Co. in August of 1973. At that time he again requested an application for a reciprocal CPA certificate; said application being received by the Certificate Holder in late September of 1973. That the Certificate Holder completed the application for a reciprocal CPA certificate and submitted the same to the Florida State Board of Accountancy in October 1973. That in November 1973 the Certificate Holder took the Florida Bar examination in Tampa, Florida. That the Certificate Holder was admitted to the Florida Bar in December 1973 and was granted a reciprocal CPA certificate by the Florida State Board of Accountancy in January 1974. That the Certificate Holder was discharged by the Florida certified public accounting firm of McClain and Co. in may 1974. That the Certificate Holder taught part-time in the Accounting Department of Florida International University beginning in January 1974 thru 1976. After his discharge from the public accounting firm of McClain and Co., he continued at Florida International University on a substantially full-time basis thru the summer of 1974 and into the fall of 1974. That in August 1974 the Certificate Holder opened an office for the practice of law in Fort Lauderdale, Florida, but this office was staffed only on a part-time basis as the Certificate Holder was devoting the great bulk of his time to his teaching activities at Florida International University in Miami, Florida. That in February, 1975, the Certificate Holder opened an office for the practice of law in Fort Lauderdale, Florida, (200 SE 6th Street, Suite 100- B), which office was from that time staffed on a full-time basis by the Certificate Holder. That since February 1975 the Certificate Holder has been actively engaged in the full-time practice of law in the city of Fort Lauderdale, Florida; and That the Certificate Holder has been a resident of and domiciled in the State of Florida from August 1973 thru and including the date of the Stipulation." (Exhibit 1). The parties stipulated at the hearing that the respondent joined the Florida Institute of Certified Practicing Accountants on Jun 17, 1974, as an active member, and changed his status to that of a non-practicing member of the institute on August 22, 1975. Respondent testified at the hearing that his purpose in attending law school in 1970 and eventually obtaining a law degree was predicated upon his desire to advance more rapidly in the tax department of an accounting firm. He had noted that most of the accountants doing tax work in accounting firms generally held law degrees and received higher salaries. Since he was interested in taxation, he did not obtain a master's degree in accounting which involves primarily audit work or preparation of financial statements. Respondent did tax work for an accounting firm in Cincinnati, Ohio, after graduation from law school in 1972 and secured a similar position with an accounting firm in Florida, McClain and Company, in the summer of 1973. He applied for admission to the Florida Bar the same summer because he believed his failure to do so might cause an adverse reaction by prospective employers in the accounting field. Prior to the Florida move, respondent did not seek employment with a law firm because he felt that the opportunities were much better in public accounting and he enjoyed that type of work. After passing the Florida Bar examination in October 1973, respondent did not seek employment in a law firm because he was well satisfied with his accounting position. After he was involuntarily discharged from his job with McClain and Company in May 1974, he sought employment with both accountant firms and law firms in the tax area. Although he began a graduate law program in taxation in January 1974, his purpose was to acquire greater knowledge and ability concerning tax matters for his work in accounting. Respondent testified that at the time he had applied for the Florida reciprocal license as a certified public accountant, he intended to practice public accounting in the State of Florida on a full-time year-round basis. He conceded that he has not been engaged in the full-time practice of accountancy since his termination with the accounting firm in the spring of 1974. (Testimony of Respondent, Exhibits 2, 3). On December 30, 1975, respondent advised the petitioner by means of a "CPA information card" that he was not engaged in the practice of public accounting. By letter of June 21, 1976, petitioner requested respondent to return his certificate along with a stipulation and waiver of hearing. The practice of petitioner in such cases is to request that a registrant waive his right to a hearing on the question of whether or not his certificate should be revoked on the ground that he is not engaged in the full-time year-round practice of public accounting in Florida. In the event the registrant does not agree to waive such a hearing, petitioner normally proceeds to file an administrative complaint seeking revocation of the certificate. (Testimony of Respondent, Composite Exhibit 4).
Recommendation That petitioner's administrative complaint against respondent Thomas F. Luken be dismissed. DONE AND ENTERED this 16th day of November 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of November 1977. COPIES FURNISHED: James S. Quincey, Esquire Post Office Box 1090 Gainesville, Florida 32602 David Hoines, Esquire First National Bank Building Fort Lauderdale, Florida 33394
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 At all times material to this proceeding, Respondent Favret held public accounting license number 0001424 with the State of Florida. Respondent's license to practice public accounting reverted to inactive status by operation of law on January 1, 1980, due to his failure to demonstrate to the Department of Professional Regulation and the Board of Accountancy compliance with the continuing education requirements imposed on licensed public accountants pursuant to Section 473.312, Florida Statutes, and Chapter 21A-33, Florida Administrative Code. The Respondent was aware that his license reverted to inactive status on January 1, 1980, due to his failure to meet professional continuing education requirements. Respondent chose not to comply with the continuing education requirements because he did not wish to maintain an active license and did not feel that formal continuing education was of benefit to him. Between January 1, 1980, and August, 1981, Respondent continued to perform tax advisory services for approximately twenty-five (25 ) clients. His services included the preparation of personal federal income tax returns and all necessary supporting tax schedules. Respondent explained the tax services he provided as including the accumulation of raw data brought in by a client in categories, summarizing the information and then preparing the necessary tax forms. Although the Respondent signed all the tax forms as the preparer, he ceased using the professional designation, "C.P.A." when he received formal notice of the inactive status of his license. To prepare the income tax returns for his clients, knowledge of the present tax laws and regulations, tax accounting and arithmetic were utilized by the Respondent in the tax advisory and preparation services for which he received compensation. The preparation of personal income tax returns involves the use of accounting skills which includes the ability to make a determination of what items need to be recognized and included7 the reasonableness of the items, the proper categorization of the items and whether to apply certain accounting functions such as allocation to the items. 1/
Findings Of Fact Dwight S. Cenac, Respondent, holds certificate No. 3639 as a Certified Public Accountant in the State of Florida. On 2 September 1977 he requested an exemption from the continuing education program required of public accountants to retain their certificate (Exhibit 2). Therein he stated he was not practicing public accounting, the exemption was granted and Respondent's registration card has been endorsed with a statement that Respondent's certificate to practice public accounting in Florida is inoperative. Following his graduation from college in 1970 Respondent worked for the accounting firm of Ernst and Ernst for two years and attained his certificate in 1973. He was employed with Blue Cross of Florida from 1973 until 1977 when he was employed by a health care provider in Puerto Rico to help set up their procedures to improve Medicare and Medicaid payments for services they provided. His understanding of the Medicare regulations and procedures acquired while working at Blue Cross, coupled with the conditions he found in Puerto Rico, led Respondent to believe that many health care providers had need for special consulting in conjunction with their financial record keeping. Health Care Management Consulting, Inc. (HCMC) was formed in 1977 with Respondent as the sole shareholder. In order to acquaint providers with the services he proposed, Respondent prepared a proposal (Exhibit 1) which was sent to health care providers. As a certified public accountant he could not do this without violating the laws and regulations proscribing solicitation by Florida practitioners. In order to overcome this potential problem, Respondent, on 2 September 1977, (by Exhibit 2), notified Petitioner that he was no longer performing public accounting. As the owner and principal operator of HCMC, Respondent does not hold himself out as a CPA, such information is not included in his letterhead or business cards, office or telephone directory or in any public place. His certificates as a Certified Public Accountant are hanging on the wall of his office, but none of his clients ever visit his office. In addition to Respondent, HCMC employs two other consultants who previously worked for Blue Cross, as well as a secretary. Neither of the other two consultants is a certified public accountant, but both perform services for clients similar to those services performed by Respondent. They, as well as Respondent, obtained the special expertise they offer to health care providers while working in the intermediary field between the government and the provider. HCMC provides specialized services not provided by public accountants such as setting up books and records for health care providers, preparing cost reports, providing assistance in setting rates and general familiarity with Medicare rules and regulations. Many of the services provided by HCMC, inasmuch as they involve financial records, are the same type services provided by Florida practitioners. Respondent, by submitting the HCMC Proposal to hospitals, nursing homes and other health care providers is both advertising and soliciting business. HCMC has submitted copies of its Proposal (Exhibit 1) to over 300 hospitals in Florida, and has obtained business previously performed by Florida practitioners. In the Proposal (Exhibit 1) HCMC offers services on a contingent fee basis. These services offered include reimbursement and recoupment of Medicare funds, and the fee paid HCMC is a percentage of the additional funds obtained as a result of the services provided by HCMC. Many of HCMC's services involve increasing reimbursement to the health care provider from Medicare and Medicaid sources. No audits unrelated to Medicare or Medicaid are performed, and financial statements prepared by HCMC do not refer to generally accepted accounting principles and generally accepted auditing standards, nor do they purport to express or disclaim an opinion as to the fairness of the presentation. The work performed by Respondent as an employee of HCMC would not constitute the practice of public accounting if performed by a non-certified person. The other employees of HCMC providing consulting services to health care providers similar to that provided by Respondent, are not in violation of Chapter 473, Florida Statutes.
The Issue Whether Petitioner's "change of status" application should be denied for the reasons set forth in the Notice of Intent to Deny.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Petitioner has an undergraduate and master's degree in civil engineering from the Georgia Institute of Technology (received in 1962 and 1964, respectively) and a law degree from Emory University (received in 1980). In 1968, Petitioner went into the consulting business, and he has had his own business ever since. Since 1968, Petitioner has been licensed as a professional engineer, at one time or another, in approximately 20 different states, including Florida. He has held his Florida license since 1970. The other states in which he is currently licensed are Georgia, Alabama, New York, and Maryland. Petitioner is licensed to practice law in Georgia, but is on inactive status. Petitioner has been licensed as a real estate broker in Florida since 2001 or 2002. Petitioner has been certified as a general contractor in Florida since 1980. He was the qualifier for McKinney Drilling Company from 1980 until 1994. Since 1994, he has been the qualifier for Pressure Concrete, Inc. (Pressure), which approximately a year ago was purchased by Proshot Concrete, Inc. (Proshot). Petitioner has never received any discipline in connection with any of the professional licenses he has held over the years, including the certification allowing him to engage in general contracting in Florida; nor does he have any criminal record. Petitioner has not undertaken any construction or consulting project that has resulted in a lawsuit, judgment, or lien being filed. Petitioner has not been involved in any project where there has been a default triggering a claim against a payment or performance bond. All of the vendors and suppliers he has used on construction projects have been paid. Petitioner has never filed for bankruptcy. There are no lawsuits now pending against Petitioner. In or around September 2006, Petitioner completed and submitted an application to the Board seeking a "change of status" in his certification to enable him (as a general contractor) to qualify Proshot instead of Pressure. Petitioner used a Board-generated form, DBPR CILB 4363-Change of Status Application From One Business Entity to Another (Form), to apply for such a "change of status." The "Financial Responsibility" section of the Form contained the following questions and accompanying instructions: NOTE: If you answer "Yes" to any of the questions below, you must provide an explanation on DBPR 0060-General Explanatory Description form and attach legal documentation, i.e., satisfaction of lien, judgment, payment schedule, etc. If you have been convicted of a felony, you must submit proof of reinstatement of civil rights. The following persons must answer the financial responsibility questionnaire: Qualifying Agent All Owners/Partners Have you, or a partnership in which you were a partner, or an authorized representative, or a corporation in which you were an officer or an authorized representative ever: Undertaken construction contracts or work that a third party, such as a bonding or surety company, completed or made financial settlements? Had claims or lawsuits filed for unpaid past-due bills by your creditors as a result of construction operations? Undertaken construction contracts or work which resulted in liens, suits, or judgments being filed? (If yes, you must attach a copy of Notice of Lien and any payment agreement, satisfaction, Release of Lien or other proof of payment.) Had a lien filed against you by the U.S. Internal Revenue Service or Florida Corporate Tax Division? Made an assignment of assets in settlement of construction obligations for less than the debts outstanding? Been charged with or convicted of acting as a contractor without a license, or, if licensed as a contractor in this or any other state, been subject to any disciplinary action by a state, county, or municipality? (If yes, you must attach a copy of any state, county, municipal or out- of-state disciplinary order or judgment.) Filed for or been discharged in bankruptcy within the past five years? (If "yes," you must attach a copy of the Discharge Order, Order Confirming Plan, or if a Corporate Chapter 7 case, a copy of the Notice of Commencement.) Been convicted or found guilty of or entered a plea of nolo contendere to, regardless of adjudication, a crime in any jurisdiction? Note: If you, the applicant/licensee, have had a felony conviction, proof that your civil rights have been restored will be required prior to Licensure. Petitioner answered "No" to all of these questions, believing, in good faith, that such information was accurate. The final page of the Form contained the following "Attest Statement," which Respondent signed: I have read the questions in this application and have answered them completely and truthfully to the best of my knowledge. I have successfully completed the education, if any, required for the level of licensure, registration, or certification sought. I have the amount of experience required, if any, for the level of licensure, registration, or certification sought. I pledge to comply with the applicable standards of practice upon licensure, registration, or certification. I understand the types of misconduct for which disciplinary proceedings may be initiated. As part of the application process, Petitioner made the necessary arrangements with Advantage Information Services, LLC (Advantage) to directly provide the Board with a credit report. On or about October 26, 2006, Advantage sent the Board a two-page Transunion credit report (Transunion Report) containing Petitioner's "credit profile," along with a one-page report of the results of a "check[]" of public records at the "local, statewide, and national level" (Records Check Report). The Transunion Report revealed a federal tax lien in the amount of $35,100.00 that had been filed against Petitioner in 1997 for unpaid personal income taxes. Petitioner was aware of this lien at the time he filled out the Form, but did not report it in response to Question 4 of the "Financial Responsibility" section because he did not understand the question to ask about liens such as this one which were unrelated to his business activities. The Internal Revenue Service is withholding 15% of Petitioner's monthly Social Security benefit and applying it to reduce the amount Petitioner owes for his unpaid personal federal income taxes. The Records Check Report read as follows: Public records have been checked on a local, statewide, and national level and are incorporated within the report. Additional records are as follows: Cheatham Register of Deeds, TN - Federal Tax Lien Release, 01/11/2005, Case #74147 - Book/Page 131/552 - $30,908.00 - Not Paid. Plaintiff: IRS Walton County Superior Court GA - County Tax Lien, 03/12/1998, $387.00 - Not Paid. Case Number - B3P253C, Book/Page - 3/253 Plaintiff: County Tax Assessor Dekalb County State Court, GA - Civil Judgment, 05/01/1991, $49,283.00 - Not Paid. Case Number - 814497 Plaintiff: Bank South The 1998 Walton County Tax lien noted in the Records Check Report concerned an assessment made on tangible personal property in the form of an airplane owned, not by Petitioner, but by a corporation of which he was the president. The lien did not arise out of any activities in which Petitioner was engaged as a general contractor. The 1991 Dekalb County civil judgment noted in the Records Check Report required Petitioner to repay a bank loan Petitioner had co-signed for a friend. It too had nothing to do with his activities as a general contractor. It was only after the Board had provided Petitioner with a copy of the Records Check Report that Petitioner first became aware of the existence of the 1998 Walton County Tax lien and the 1991 Dekalb County civil judgment.2 As noted above, on April 18, 2007, the Board issued its Notice of Intent to Deny Petitioner's "change of status" application.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board find Petitioner qualified for the "change of status" for which he has applied. DONE AND ENTERED this 1st day of November, 2007, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 November, 2007.
The Issue The issue in this case is whether Respondent is guilty of failing to pay Petitioner for the expenses of an examination and, if so, what penalty should be imposed.
Findings Of Fact Respondent is a licensed Florida domestic insurer operating under a current certificate of authority. Prior to the above-styled proceeding, Petitioner and Respondent were involved in another administrative proceeding. Petitioner seeks in the subject case to impose discipline for Respondent's refusal to reimburse Petitioner for audit expenses incurred during and after the prior administrative litigation. In DOAH Case No. 87-4518, Petitioner alleged, by Notice and Order to Show Cause filed September 11, 1987, that Respondent was in unsound financial condition, using methods of business that rendered its further transacting of insurance hazardous to policyholders and the public, in violation of a lawful order or rule of Petitioner, and in a financial condition that endangered the interests of policyholders, especially because its ratio of net premiums written to surplus exceeded 4:1. The Notice and Order to Show Cause alleges that the projected annualized ratio of net premiums written to surplus would exceed 4:1 by year- end; Respondent was not properly reserving for losses and expenses in connection with liability policies; the annual and quarterly statements reflect a continuing serious deficiency in loss reserves; financial deterioration seriously endangered the welfare of policyholders and the public; and major material discrepancies existed between Respondent's 1986 annual statement filed with Petitioner and Respondent's 1986 audited annual financial statements. The major material discrepancies between the financial statements consisted of allegations that the surplus was overstated by $41,327 in the annual statement filed with Petitioner; the loss adjustment expenses and loss reserves were carried at $1.4 million on the annual statement filed with Petitioner, but $2.7 million on the financial statement; and the unearned premiums were carried at $3.5 million on the annual statement filed with Petitioner, but $2.1 million on the financial statement. Three days prior to the filing of the Notice and Order to Show Cause, Petitioner commenced a financial examination of Respondent. The examination, which began on September 8, 1987, was a target examination. The other type of financial examination conducted by Petitioner is a triennial examination, which is performed not less frequently than every three years. Unlike the triennial examination, a target examination focuses on particular matters--in this case discrepancies between financial statements. Because Respondent commenced doing business on April 5, 1985, it had not yet been the subject of a triennial examination. The target examination is also different from an investigation, which focuses on the business practices of individuals rather than financial matters of insurers. Due to a perceived lack of reliability with respect to Respondent's accounting records, the scope of the examination was extended to include an analysis of all of Respondent's accounts. This broadening of scope took place during the first audit examination, which culminated with the Report on Examination for the period ending June 30, 1987. With respect to its examination of Respondent, Petitioner incurred, during the months indicated, the following audit expenses, all of which are reasonable: September, 1987 $7,889.00 October, 1987 10,682.00 November, 1987 10,678.00 December, 1987 8,931.65 January, 1988 10,401.00 February, 1988 2,051.80 March, 1988 645.40 July, 1988 237.70 August, 1988 5,795.80 September, 1988 5,564.40 October, 1988 2,645.40 January, 1989 610.80 TOTAL $66,132.95 10. On April 13, 1988, counsel for Petitioner and Respondent in DOAH Case No. 87-4518 met to discuss a settlement. Memorializing the meeting, Respondent's counsel acknowledged by letter dated April 13 that Petitioner's counsel indicated a desire "to go back into the company for the purpose of bringing forward the audit that was completed earlier this year." Respondent's counsel suggested a date for Petitioner's auditors to commence another audit and advised that he would postpone discovery in the hopes of settling many of the issues. Negotiations proved successful. On July 14, 1988, the final signatures were affixed to a Joint Settlement Stipulation for Agreed Order (Stipulation). The Stipulation recites in material part: [Petitioner] conducted an investigation of [Respondent], and alleged that it was in violation [of] certain provisions of the Florida Insurance Code. These violations included its ratio of net premiums written to surplus as to policyholders and its statutory insurer capital and surplus requirements. [Petitioner] conducted an examination of the company and on March 24, 1988, issued a Report on Examination of [Respondent] as of June 30, 1987. The Stipulation provides that the Insurance Commissioner may enter an order providing, among other things, that the Stipulation shall be incorporated by reference and that "[e]ach party to this case shall bear its costs, expenses and fees, including attorney's fees." The reference to "expenses" was added at the request of Respondent's counsel. The Consent Order, which was filed August 2, 1988, incorporates by reference the Stipulation and provides that "each party to this proceeding shall bear its own costs and attorney's fees." In November or early December, 1988, Respondent received an invoice for audit examination fees incurred from August through October, 1988. As was the case with prior invoices, the invoice recited a past-due amount. A letter dated December 15, 1988, from Respondent's president responds to the invoice by stating that the past-due amount is "apparently for fees and expenses incurred by [Petitioner] in performance of an audit examination done during the months of September, 1987 through April 1988. This obligation has been satisfied by [the] . . . Stipulation . . .." The December 15 letter does not object to the audit fees incurred during August through October, 1988. The December 15 letter notes that Petitioner, immediately after filing the Notice and Order to Show Cause in September, 1987, began a "complete audit . . . to support its allegations that [Respondent] was in financial circumstances justifying the . . . Order to Show Cause." The letter adds that, pursuant to the Stipulation, Respondent bore its accounting expenses in connection with the audit examination, just as Petitioner must bear its audit examination expenses. The audit examinations conducted prior to the settlement of DOAH Case No. 87-4518 served the purpose of discovery for Petitioner. Respondent never sought a protective order as to these fact-finding efforts. Although Petitioner conducted no investigation, the allegations in DOAH Case No. 87- 4518 involved Respondent's financial condition, not the business practices of individuals, so an investigation would have been inappropriate. The early audit examinations culminated in a Report on Examination for the period ending June 30, 1987. The Report on Examination was issued on March 24, 1988. Later audit examinations culminated in a Report of Examination for the period ending June 30, 1988. This Report of Examination, which was issued on February 26, 1988, states: This is the second report on examination of [Respondent] and represents a continuation and follow-up to the report filed as of June 30, 1987. The effect of the Stipulation and ensuing Consent Order is that Petitioner agreed to absorb all audit examination expenses incurred through the preparation of the Report on Examination for the period ending June 30, 1987. These audit examination expenses ended on or about March 24, 1988, when the first Report on Examination was issued. The March, 1988, audit expenses of $645.40 appear to be related to the issuance of the first Report on Examination because all of the activity occurs in the four days prior and two days after March 24. The audit examination expenses incurred through the preparation of the Report on Examination for the period ending June 30, 1987, total $51,278.85. The letter of December 15, 1988, from the president of Respondent disputes the past-due billing of $51,278.85 because "this obligation" was discharged by the Stipulation. This letter ignores the current billing for audit expenses incurred during August through October, 1988, because the writer knew that these fees were not intended to be covered by the Stipulation. The letter of April 13, 1988, from Respondent's counsel acknowledges the hiatus disclosed by the monthly statements. By April 13, 1988, there had been a break in audit examinations. The April 13 letter discusses an "updated audit" beginning perhaps May 9, 1988; covering the March 31, 1988, quarter; and hopefully taking less than the five months expended in the first audit resulting in the Report on Examination for the period ending June 30, 1987. In effect, the April 13 letter seeks a settlement in the near future, so that discovery need not be begun, while recognizing that another audit would not be completed for several months. The author of the April 13 letter claims that he intended to include in a settlement agreement, which he hoped would be finalized in the near-term, future audit expenses to be incurred over a period of months. If so, the burden was on the author to identify explicitly these future expenses in the Stipulation.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance enter a final order suspending the certificate of authority of Respondent until the earlier of: a) six months or b) such time as Respondent complies with prior lawful orders of the Department of Insurance by remitting the sum of $14,854.10 and pays an administrative fine of $2500. ENTERED this 15 day of July, 1992, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15 day of July, 1992.
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint dated February 5, 1999, and, if so, what penalty should be imposed. The Respondent maintains that the instant action is barred by laches and violates Section 455.225, Florida Statutes.
Findings Of Fact Petitioner is the state agency charged with the responsibility of regulating the practice of certified public accountants licensed within the state. At all times material to the allegations of this case, the Respondent, Robert Jarkow, has been licensed in Florida as a certified public accountant, license number AC0010963. On or about December 1996, the Respondent orally agreed to provide accounting services for an individual named Kasman who was doing business as Traditions Workshop, Inc. (Traditions). Traditions manufactured uniforms and listed the federal government among its clients. Revenues to the company from the sale of uniforms were presumably posted in accordance with written contracts. Although the Respondent participated in the monthly completion of financial records for the company, the exact description of his responsibilities for the company and the individual are not known. It is undisputed that Ms. Kasman asked the Respondent to provide a financial statement for the company as part of an effort to secure a line of credit from a bank in New York. It is also undisputed that Ms. Kasman refused to pay for the statement. According to the Respondent, based upon that refusal, he declined to prepare the instrument. Nevertheless, a document entitled "Financial Statements" was generated with a notation "MANAGEMENT USE ONLY-NOT FOR DISTRIBUTION." The Respondent maintains that the document was not prepared as a financial report and that if generated using his data disk it was done without any intention on his part for the product being used to secure a line of credit. The document did not comply with provisions of accounting practice. The Respondent admitted that when his relationship with the party deteriorated, and payment for services was not rendered, he did not release information to a succeeding accountant. Ms. Kasman needed the information, depreciation schedules, in order to accurately complete tax records for Traditions. The Respondent attempted to locate Ms. Kasman and her bookkeeper for hearing but was unable to do so. Ms. Kasman filed a complaint with the Petitioner against the Respondent that was not investigated until several months after it was filed. The Respondent obtained a civil judgment against Traditions for unpaid accounting fees. The Administrative Complaint filed in this case was submitted over a year after the consumer complaint. Neither party presented testimony from the complainant, her bookkeeper, or her succeeding accountant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a final order finding the Respondent violated Rule 61H1-23.002, Florida Administrative Code, as set forth in Count II of the Administrative Code; imposing an administrative fine in the amount of $1000; and placing the Respondent on probation for one year subject to terms as may be specified by the Board of Accountancy. DONE AND ENTERED this 4th day of December, 2001, in Tallahassee, Leon County, Florida. ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings 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 this 4th day of December, 2001. COPIES FURNISHED: Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Victor K. Rones, Esquire Law Offices of Rones & Navarro 16105 Northeast 18th Avenue North Miami Beach, Florida 33162 Martha Willis, Division Director Division of Certified Public Accounting Department of Business and Professional Regulation 240 Northwest 76 Drive, Suite A Gainesville, Florida 32607 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
