A recent audit of New Jersey’s licensed bean counters from 2006 to 2008 found that 4 percent of them — about 780 of 20,000 — falsely reported they returned to school for mandated course
Thomas Calcagni, right, director of the New Jersey Division of Consumer Affairs, is seen in his office on Halsey Street in downtown Newark along with Neal Buccino, the division's public information officer. A recent audit found 4 percent of the state's licensed accountants have lied about returning to school for a course on ethics.TRENTON — New Jersey officials say they have uncovered a disturbing trend this year: A record number of accountants — usually considered among the most honest and trusted professionals — have been lying about their education.
Worse yet, they’ve been lying about a class on ethics.
A recent audit of New Jersey’s licensed bean counters from 2006 to 2008 found that 4 percent of them — about 780 of 20,000 — falsely reported they returned to school for the course, which the state requires them to take every three years.
What’s more, many of those caught by the review were also lying about having taken other continuing education classes, required to keep accountants sharp in areas ranging from getting taxpayers the largest refunds to keeping tabs on millions of dollars in public money.
"At a time when we’re seeing increasing financial fraud and the deterioration of trust in the public finance industry, the fact that such a large group of accountants would be so seemingly cavalier about the importance of these courses is troubling," said Thomas Calcagni, head of the Division of Consumer Affairs, which oversees licensed professionals.
The offenders, who were fined from $500 to $8,000 for the violations, included local tax preparers and school accountants to a state official and members of large accounting firms, according to documents obtained by The Star-Ledger through the state open records law.
NEVER GOT AROUND TO IT
Many of the accountants said in interviews they intended to complete the requirements when they sent in their renewal forms, but never got around to it. They also said they misunderstood some of the rules, which are explained in the very law and ethics course they failed to take.
The trend was uncovered by the state Board of Accountancy this year after it implemented a more rigorous process to investigate claims about education credentials made by accountants when they apply for a license and swear, under penalty of law, they are telling the truth.
As a result of the audit, Calcagni said, his division plans to review the way licensing boards for other professionals — including doctors, nurses, pharmacists and psychologists — audit applications to ensure more people are not misrepresenting their credentials to state regulators.
"We expect more from our licensed professionals," Calcagni said. "If they are not honest in their reporting with us, I have real concerns about whether they’re honest with the public."
The results of the audit were disclosed by state officials after a Star-Ledger review of fines issued by New Jersey’s 46 licensing and disciplinary boards. The review found that accountants — voted among the most honest and trusted professionals in a 2008 Gallup poll — have been fined $4.2 million this year, more than the total amount of penalties leveled by all the state boards in each of the past five years.
EDUCATION MANDATES
State rules require accountants to take 120 credits of continuing education courses every three years to renew their license, including a four-credit course on New Jersey’s laws and ethics.
Education mandates are required so numbers crunchers can keep up with the complex and changing rules of tax law and accounting standards, which can make a big difference when analyzing town budgets, auditing the books of large companies and corporations, or helping people figure out how much they owe in income taxes.
State consumer affairs officials rely on professionals to account honestly for their education, and also require each licensing board to perform periodic audits. But there is no standard set of rules for those audits, Calcagni said, and each board goes about the process differently.
The accountancy board used to select about 10 percent of applications randomly to verify their accuracy, said Keith Balla, board president. But this year it compared applications with the enrollment records of the law and ethics course to better target wrongdoing, he said.
Although the percentage flagged by the audit was relatively small, Balla said, no accountant who is serious about his work and serving clients effectively should be failing state requirements.
"It’s disheartening to any other licensee that they wouldn’t take their education seriously and fulfill that obligation," he said.
Louis A. Bruni, chief of fiscal services at the state Department of Agriculture, was fined the maximum $8,000 after the board found he had not completed any of the required classes from 2006 and 2008.
Bruni, who earns $113,024 a year at his state job, requested a waiver from the board for the fine, claiming financial hardship. On Wednesday, he voluntarily surrendered his license, according to a spokesman for Consumer Affairs.
Bruni did not return calls for comment.
Lynne Richmond, a spokeswoman for the state Agriculture Department, said Bruni is a longtime state worker and meets the requirements of his position regardless of whether he holds an accountancy license.
Joanne G. Diggs, manager of Willingboro Township, completed only 86 of the required 120 credits and was fined $1,500. Diggs said she took a law and ethics course, but not one approved by the board. She also said the board did not allow other credits she had taken.
She said she has paid the fine and is making up the courses.
"I didn’t do it on purpose," she said. "I guess I failed to know what the specific rules were at the time."
Ralph Albert Thomas, executive director of the New Jersey Society of Certified Public Accountants, said that although most people followed the rules, he hopes the state’s new auditing procedures will make accountants think twice before rolling the dice on their continuing education.
"People do slip, they forget," Thomas said. "But I think the important thing is that we adhere to a zero tolerance policy because it is the right thing to do. Invariably somebody’s going to fall off the wagon. I’m happy the percentage isn’t in the double digits."