October 1999

State Education Department to Audit CPA and Provider Compliance with CPE

State Board Hears Updates on Regulatory Issues

By Fong Chan

The State Education Department will conduct audits starting in January of both providers and participants of continuing professional education to determine compliance with state laws and regulations. At the September 22 meeting of the New York State Board of Public Accountancy, Daniel Dustin, the board's executive secretary, stated that the department is concerned about the lack of compliance and, given that the approvals of state CPE providers are all due to expire over the next six months, the SED has decided to examine the program.

Under current department regulations, CPE providers must maintain for five years documentation for each program offered, including the instructor's name and biography, a record of enrollment and participation of CPAs, a course outline, and the program's date and location. Similarly, the licensee also must maintain for five years a record of completed continuing education hours, including title of the program, number of contact hours, sponsor name and number, and date and location of the program.

"The primary focus of mandatory continuing education is to protect the public interest by requiring CPAs and public accountants to maintain a high level of competence to perform professional services for the public," Dustin said. "The Legislature passed a law making participation in continuing education programs mandatory, with certain exceptions, when CPAs or PAs are practicing public accountancy in New York. Sponsors of continuing education courses are also subject to specific regulatory standards. Public accountancy was the second profession in the state to mandate continuing education. As we approach the tenth anniversary of the program, the public must be secure in the knowledge that licensees continue to maintain a high level of competency to practice the profession."

Each month, the department will randomly select a number of licensees and providers to audit. The state will require these selected licensees to submit a summary sheet detailing courses completed during the prior triennial registration period and original course certificates evidencing completion of the courses. The state also will ask selected providers to submit records required by law.

The state is developing a process to handle cases of noncompliance. It may recommend disciplinary actions for licensees who fail to provide the required records. The state also may deny or revoke approval of CPE providers that have violated the law.

The September state board meeting also reported the following:

* As of September, only 10 schools in the state have been approved to provide licensure-qualifying degrees under the new 150-hour curriculum, which the state Board of Regents passed in July 1998. State board members expressed concern over the recent drop-off in CPA candidates and questioned whether the move to 150 hours was a contributing factor. The state board voted to advise the Regents to modify the conditioning requirements for the CPA exam.
* Virginia has filed an appeal with the National Association of State Boards of Accountancy to challenge the determination of NASBA's qualification appraisal committee that Virginia's licensure requirements are not substantially equivalent to the provisions set out in the Uniform Accountancy Act proposed by NASBA and the AICPA. Virginia has decided to implement the 150-hour curriculum in the year 2006 instead of the UAA-required 2005.
* The SED reminded state board members of a 1993 office of the professions policy that prohibits them from serving in any elected or appointed leadership position in a local, state, or national professional association or society that requires its members to advocate and express support publicly for positions of the national organization.
* The SED has retained Robert L. Gray, former NYSSCPA executive director, as a consultant to assist the department in its compliance review of the American Express Tax and Business Services/Goldstein Golub Kessler & Co. transaction. *

The New York State Education Department has renewed the Foundation for Accounting Education's CPE provider status for the three-year period September 1, 1999 through August 31, 2002. FAE's provider number is 000372.