What about consumers? Squeezing the CBA hurts profession, consumers.

California regulates professionals such as CPAs via licensing boards and bureaus. These agencies generally are self-funded by the licensing fees paid by the regulated individuals within the profession or industry.

The California Board of Accountancy is having difficulty performing its public interest responsibilities because of the state's budget shortfall even though--if left alone--it would have more than enough money to fund its activities.

Under-staffed

In July 2002, the CBA was authorized 84.3 staff members, including permanent, exam proctors and temporary help. As of July 1, the CBA was down to 63.4 staff members.

While their workload is increasing, more people than ever before are entering the profession, and between 16,000 and 20,000 people sit for the CPA exam every year, the CBA, like other boards within the Department of Consumer Affairs, is suffering from unnecessary cutbacks that won't reduce California's deficit.

The hiring freeze that Gov. Gray Davis ordered two years ago has severely hampered the ability of California's regulatory agencies to do their jobs.

That executive order made provisions to exempt some agencies deemed critical to the health and safety of Californians, but did not exempt regulatory agencies that are self-supporting, such as the CBA, California Medical Board or Contractors Licensing Board.

Within these agencies, staff positions are eliminated if they are vacant for a year, or if they happened to be vacant July 1.

The CBA, like any employer, has experienced turnover for a variety of reasons. Some CBA employees were able to move to agencies that were not subject to the CBA's hiring or promotion freeze.

The net result is that the CBA is no longer able to function efficiently.

Give Them Back the Money

Squeezing the CBA does not reduce California's deficit. The CBA is totally funded by licensee renewal fees, exam fees and the like. No money from the General Fund goes to the CBA and, in fact, last year the Legislature borrowed $6 million from the CBA special fund. Other regulatory agencies were similarly "taxed" by last year's budget, promised that the money would be returned with interest as some undisclosed point in the future.

The intent language in last year's budget banned the CBA and the other boards from raising fees because of the "borrowing", indicating that it should not interfere with the CBA's programs or require a reduction in service. But it is.

Services are being reduced, programs are being eliminated and the lack of ability to fund and staff the CBA is interfering with the board's mission.

Spiraling Decline in Services

CalCPA supports reasonable, effective enforcement as a benefit to the entire profession and public.

This year, CalCPA supported a CBA proposal for a $270,000 budget increase to fund three additional enforcement positions. Not only did the Legislature remove the authorization for the staff increase, it borrowed the $270,000!

What does this mean to you? It now takes six to eight weeks or longer to process an "active" license renewal. Before the hiring freeze the CBA staff was able to process renewal applications in one to two weeks.

Before the hiring freeze the CBA could respond to phone inquiries within 48 hours. It now takes five to 10 days to respond to telephone and e-mail inquiries.

Additionally, it was reported at the last CBA meeting that it is taking up to nine months to complete the initial licensing process with the average being six to eight months. Candidates are having to wait almost a year from the time that they submit an application for licensure.

Accountancy legislation that was passed last year created new responsibilities for the CBA to receive, review and respond to reports of financial statement restatements and reports of civil judgments and arbitrations more than $30,000.

That legislation also instructed the CBA to prepare for an early Sunset Review. Already stretched CBA staff are now being diverted to prepare a report to the Legislature for hearings next year.

Increasing the CBA's responsibility through new legislation and reducing funding simultaneously is contrary to everyone's interest. Because of arbitrary budget cuts and bureaucratic demands, the CBA is unable to efficiently and effectively perform its core missions of licensing qualified candidates and protecting consumers.

Regulatory boards, such as the CBA, were legislatively designed for independence, separation of appointment powers and special funding for the very purpose of allowing them to perform their public interest duties without interference.

What's Next

This matter will be considered by the Government Relations Committee and others to develop recommendations on what if anything can be done.

Other professional associations are being contacted to determine how their regulatory boards are coping. Chances of accomplishing any change in this legislative session are slim since the Legislature is only planning to meet between Aug. 18 and Sept. 12 and most of their attention is predicted to be focused on the Oct. 7 recall election.

The recall deadline is creating a chaotic situation for legislators on both sides of the aisle and emotions are close to the surface. In the interim, CPAs are advised to renew their licenses early to avoid problems and advise candidates to be patient with the CBA.

Bruce C. Allen is CalCPA's director of government relations.