Office of the Legislative Auditor - Financial Audit Division

Report Summary

Board of Accountancy

July 1, 1998, through June 30, 2001

Overall Audit Conclusion:

The Board of Accountancy managed its financial activities in a reasonable and prudent manner. The board collected the appropriate level of fees to recover its operating costs. Except as noted below, the board provided reasonable assurance that assets were safeguarded, financial activity was properly recorded in the accounting system, and financial operations complied with applicable legal provisions.

Key Findings:

• The board did not open and date-stamp license applications immediately upon receipt during peak renewal periods. Also, the board suspended date-stamping applications during the 2002 peak license renewal period. Therefore, we could not verify if the board receipts were deposited daily in compliance with statutory requirements. Our analysis of license renewals due by December 31, 2000, however, showed that approximately $100,000 was deposited during the first two weeks of January. Furthermore, over half of the renewals we tested were date-stamped as received three or more weeks after the applicant signed the renewal form. In fiscal year 2001, the board collected approximately $700,000 in revenues.
• The board did not execute contracts or encumber funds before incurring certain obligations. Contracts for exam space rental, worth approximately $5,600 each, were not executed prior to the May 1999 and 2001 exams. Also, contracts were not executed for computer consulting services totaling approximately $77,000 in fiscal year 1999 and early fiscal year 2000. In addition, the board did not encumber funds for exam order and grading costs, ranging from $62,000 to $71,000 each, prior to the November 1998, 1999, and 2000 exams. Not executing contracts or encumbering funds before incurring obligations could cause budgeting problems or contract performance concerns.

The Board of Accountancy is responsible for ensuring that persons engaged in public accounting meet and maintain the qualifications, standards, and professionalism required to competently practice public accounting in Minnesota. Pursuant to Minn. Stat. Chapters 214 and 326.165-326.229 (2001), the board administers the Uniform Certified Public Accountant Examination, issues and renews licenses to certified public accountants, renews licenses to licensed public accountants, and regulates the profession. The board regulates the practice of public accounting by enforcing its rules and applicable laws on ethics and by monitoring continuing professional education requirements and investigating complaints. Dennis Poppenhagen is the executive secretary of the board.