The California State Board of Accountancy is looking for someone to carry legislation that would allow them to raise the pay offered to board investigators. Both the board president and outside critics agree that the pay for these investigators is probably too low to attract a large enough number of qualified applicants.
The need for qualified investigators has been highlighted by the financial scandals that have rocked the country in recent months and years. But any rise in pay would also have to take place in the midst of perhaps the worst budget crisis in state history—a budget crisis caused, in part, by those very same financial scandals.
“Those wages are set by the legislature, not by ourselves,” said board president Bob Peterson. “It’s certainly made it difficult to hire people.”
The pay for an investigative certified public accountant for the Board ranges from about $61,000 to $74,000. A supervising investigative CPA makes between $67,000 and $81,000. As state jobs go, these pay quite well.
But CPAs are also highly educated and expected to work long hours. In the private sector, a well-qualified CPA can make twice what the state is paying. Even in the down economy, a quick search of jobs websites shows multiple advertised positions paying $120,000 to $140,000.
While many other boards hire investigators who don’t actually hold the qualifications of the professional group they police, it requires a lot of specialized knowledge to find accounting irregularities, Peterson said.
“We require our investigators to be CPAs because they’re investigating CPAs,” he said.
Carl Olson, chairman of the Fund for Stockowners Rights, said that the lack of pay for investigators is troubling because of the way the board is structured. Its budget is paid for by fees paid its 76,000 licensees in the state. While the state may be in trouble, he said, the board has been sitting on a $25 million bank account. Late last year, the Schwarzenegger borrowed $11 million from this fund to help cover operating expenses in the general fund. It also borrowed money from several other professional boards.
“It’s not tax money, it’s supposed to be a protected fund,” Olson said. “The licensees are being double-taxed, because the money they pay in to be regulated is being appropriated for other purposes.”
Olson said his group has been on a campaign to push the board towards a more aggressive stance—in editorials, appearances at board meetings and public clashes with groups like the National Association of Boards of Accountancy. Even while state retirements funds like CALPERS have lost 20 percent of their value due to rampant financial mismanagement across the country. The California Board and other boards of accountancy have not done enough to investigate and require information from the large companies it watches, Olson said.
“As they’re dithering around, all of these giant fiascos are going unpunished and encouraged,” Olson said. He added: “If you’re going to get a CPA who understands what they need to, you need to pay at least $100,000 to get someone who is competent and devoted.”
Peterson noted that the borrowed money is guaranteed to be returned with interest, and said it was a completely different issue from the pay scale for investigators.
“We’ve got all the positions we need,” Peterson said. “We’ve got to get them filled. Salaries are one of those factors, but there’s a multiple of factors that go into that equation.”