The Board of Accountancy met on Wednesday, July 28-29, 2004 in the conference room of the Eide Bailly office at 200 E. 10^th Street, Suite 500, Sioux Falls, South Dakota. Chair John Graham called the meeting to order at 8:00 a.m. Other Board members present were Marty Guindon, Mary Day, John Mitchell, David Olson and John Peterson. Also present were Sherri Sundem Wald, Legal Counsel and Executive Director, Bobbi Barnhill.

John Graham asked if there were any additions to the agenda. The following items were added to the agenda:

The nominating committee appointed the following officers for the 2005 fiscal year:

John D. Graham, CPA – Chair

Marty L. Guindon, CPA – Vice Chair

John M. Mitchell, CPA – Secretary-Treasurer

A motion was made and seconded to approve the June 29, 2004 board meeting minutes, the motion was unanimously carried.

A motion was made and seconded to approve the revised financial statements through June 30, 2004, the motion was unanimously carried.

A motion was made and seconded to approve the issuance of permits and certificates through July 26, 2004, the motion was unanimously carried.

The Executive Director presented 2005 fiscal year budget to the board for discussion. The Executive Director will revise as discussed for further discussion and subsequent approval at the August 2004 board meeting.

Annual Board Meeting, Sioux Falls

July 28-29, 2004

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The Executive Director presented the Uniform CPA Examination scores for board approval. A motion was made, seconded and unanimously carried to approve candidate’s scores for the first window of the computerized testing.

The Executive Director presented examination statistics to the board by university. The national average has been reported to hover in the mid-40 range. The average for the first window of computerized testing in South Dakota was 41%.

A discussion ensued regarding the education breakout sessions at the NASBA Regional meetings. The consensus during the educational breakout session was for boards to advocate for an un-mandated curriculum, however, offering recommendations to colleges and universities for various pathways dependent on the career choice of the individual within the accounting profession. To aide the board in their continued discussion regarding the 150 semester hour requirement, the Executive Director will request a generic frequency distribution printout from the Board of Regents which covers the past seven years for graduates of the master degree programs at the state colleges and universities holding a major in liberal arts, business and accounting. This data will be used to ascertain the historic make up of the additional 26 hours required.

The board chair, John D. Graham adjourned the meeting for lunch at 12:00 P.M.

The board chair, John D. Graham reconvened the meeting at 1:30 P.M.

John D. Graham requested Sherri Sundem Wald give a report to the board on the open records and open meeting requirements, previously prepared. Ms. Wald clarified any perceived ambiguities as required by the board members.

The board entered into a discussion of the proposed Continuing Professional Education (CPE) rules for the purpose of making general revisions. A discussion ensued, the revisions were noted and the Executive Director will prepare a revised copy for the board members to be reviewed at the August 2004 board meeting.

A motion was made, seconded and unanimously carried to enter executive session for the purpose of discussing investigations. A motion was made, seconded and unanimously carried to come out of executive session.

Dave G. Olson, requested Ethics courses be added to a future board meeting agenda.

John D. Graham adjourned the meeting at 5:30 P.M.

John D. Graham called the meeting to order at 8:30 A.M. on Thursday, June 29, 2004.

The board reviewed a report given by the Executive Director on the change of hours at the Prometric testing site.

Annual Board Meeting, Sioux Falls

July 28-29, 2004

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The board reviewed an individual’s request to use the designation MPA on business cards. A motion was made, seconded and unanimously carried to deny the request pursuant to SDCL: 36-20B-55 and 36-20B-56. A motion was made, seconded and unanimously carried to deny the request by letter drafted on behalf of the board members by the Executive Director.

A hearing for reinstatement of license was held at 9:00 A.M. on Thursday, June 29, 2004. The hearing was brought to order by board chair, John D. Graham. Board members present were, Marty L. Guindon, John M. Mitchell, Mary S. Day, Dave G. Olson, and John E. Peterson. Also present were Executive Director, Bobbi Barnhill, Legal Counsel, Sherri Sundem Wald, Attorney, Thomas K. Wilka, and Steven T. Horning.

The board reviewed the petition for modification of reinstatement conditions. As a condition of reinstatement the board required the petitioner acquire $500,000.00 dollars in errors and omissions insurance, and retake and pass the AICPA Ethics Exam. Mr. Horning completed, passed and submitted the AICPA Ethics Exam results to the Board, however he has been unable to secure the necessary errors and omissions insurance. Mr. Horning did find an insurance company willing to underwrite a policy, however their offer was contingent upon his reinstatement by this board as a Certified Public Accountant.

The board agreed to reinstate Mr. Horning’s license(s) provided he agree to the following stipulations:

1. continue to maintain professional errors and omissions insurance in an amount of at least $500,000.00

2. be subject to peer review for the period ended June 30, 2005. Such report will be due no later than December 1, 2005.

3. for 11 years following reinstatement of the Petitioner’s license, to notify the Board of Accountancy if the Petitioner obtains any sales tax license in addition to the three Petitioner held at the time of the hearing in this matter;

4. forfeit his certificate and the firm permit upon his conviction for any misdemeanor or felony involving fraud or dishonesty;

5. provide the Board of Accountancy on an annual basis (between January 1 and February 15 or each year) a list of any business interest in which the Petitioner or any member of Petitioner’s immediate family (defined as anyone living with Petitioner) has an interest;

6. for 11 years following reinstatement of the Petitioner’s license, file with the Board of Accountancy a copy of any sales tax audit conducted on any business in which the Petitioner has ownership interest.

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July 28-29, 2004

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1. That Steven T. Horning shall complete the following continuing professional education requirements:
   1. Twenty-four hours of qualified CPE credits during the 12

      months preceding the reinstatement order, which time period is extended for 90 days from the date of this hearing; and

   2. Forty hours of qualified CPE credits will be completed by June 30, 2005; these CPE credits are in addition to the hours required by paragraph 2a, above, and shall include a minimum of 24 CPE credit hours in compilation and review services to include financial statement presentation and disclosure.

2. Steven T. Horning agrees that should he fail to meet or fail to comply with any of the above conditions, he will voluntarily surrender his certificate and firm permit and waive any and all due process rights he may have to a hearing.

The above stipulations were entered into and signed by Sherri Sundem Wald and Thomas Wilka. An Order of Reinstatement was entered into and signed by John D. Graham, Chairman of the Board of Accountancy and attested to by Bobbi Barnhill, Executive Director to the Board.

The hearing was concluded at 12:00 P.M.

The board discussed the inactive status pursuant to SDCL: 36-20B-27. The Executive Director will draft a letter for Sherri Sundem Wald’s approval requesting additional information from the licensee which substantiates he/she should be exempted from active status.

The board approved the CBT Administration Task Force Score Approval/Release Survey completed by the Executive Director.

The Executive Director shared the most recent report of the Examination Review Board with the members of the Board.

Future meeting dates were discussed and set as follows:

August 11, 2004, Conference Call, 10:00 A.M. (CST)

September 27, 2004, Conference Call 10:00 A.M. (CST) – Tentative

October 29, 2004 – Pierre, Legislative Audit Conference Room, 8:30 A.M.

October 29, 2004 – Pierre, Legislative Audit Conf. Room - 9:00 A.M. Rules Hearing

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December 10, 2004, Eide Bailly Conference Room, Sioux Falls, 8:30 A.M.

January 28, 2005, Conference Call, 10:00 A.M. (CST)

March 25, 2005, Conference Call, 10:00 A.M. (CST)

April 29, 2005, Rapid City, South Dakota, Casey Peterson & Associates, 8:30 A.M.

All business having come before the board was concluded and the meeting was adjourned by the chair at 12:30 P.M.

John D. Graham, CPA, Chair

Bobbi Barnhill

Executive Director

John M. Mitchell, CPA

Secretary/Treasurer