Attorney General Opinion WW-0239

Honorable Jay A. Phillips Chairman, Texas State Board of Public Accountancy 1810 Rank of the Southwest Building Houston 2, Texas Dear Mr. Phillips: Opinion No. WW-239 Re: Is the Texas State Board of Public Accountancy authorized to hold hear- ings for the purpose of Initiating a complete Investigation as an appropriate step of pro- ceedings instituted for the purpose of cancelling or suspending any certifi- cate or permit granted by the Board? Your letter for an opinion from this office poses the question: is the Texas State Board of Public Accountancy authorized to hold hearings for the purpose of Initiating a complete investigation as an appropriate step of proceedings instituted for the purpose of canoelling or suspending any certificate or permitgranted by the Board? We quote in part from your letter: "It has been the poliay of the Board to hold hearings when matters come to our attention which we believe to be sufficiently important to warrant a complete investigation. II . The Board has interpreted Section of the &blic Accountancy Act of 1945 to permit 23 hearings, and further, It considers hearings simply an appropriate step in making fnvestlga- tions. . . . "When we have had hearings in the past, we have sought to have witnesses appear to give testimony In respect of their knowledge pertaining to matters being lnqulred Into. Also, at the hearings we have invited the person complained of to appear and such person has been permitted to have his attorney with him. It is always explained to the person complained of that he is not required to testify under oath." Honorable Jay A. Phillips, Page 2 (WW- I. The Public Accountancy Act has been codified as Article 41a, Vernon's Civil Statutes and, Insofar as this opinion is concerned, the pertinent parts of said Act provide as follows: Section 4 establishes .the Texas State Board of Public Accountancy. Section 5. "The Board shall administer the provisions of this Act.',The Board . . , may adopt such rules as it deems neoessary for the orderly conduct of its affairs. The Board may promulgate, and may amend from time to time, rules of professional conduct appropriate to establish and maintain a high standard of inte- grity in the profession of public accountancy, after notice Tao all holders of valid permits to practice public accountancy in this state. . . ." The notice sets forth the proposed rules, and/or amendments, and those receiving such notice vote upon the proposal. The Board then announces the results of the voting. The rule or amendment shall not be operative until approved by a majority of.those voting. Section 22. "The Board shall have ~the power to institute proceedings against any person holding a certificate or permit under this Act to revoke or suspend the certificate or permit of such person who shall be charged and found guilty of: "(a) The practice of any fraud or deceit In obtaining a certxficate or a permit; "(b) Any gross negligence or misconduct in the practice of public accountancy; l!(c) Violation of any of the provisions of this Act or any of the rulesor regulations promul- gated by the Board." Hearings or investigations by administrative agencies are generally incidental to their functioning; they are modes of arriving at the facts of a case. 1 Tex. Jur. sup. 111, Administrative Law and Procedure, Sec. 27. In many situations the,exerclse or performance of a statutory power or duty by an agency 1s dependent upon the existence or non-exlstenoe of c~ertain facts, and it is plainly necessary that the agency first ascertain whether Honorable Jay A. Phillips, Page 3 (WW-, 1. the requisite facts exist in order that it may thereafter take such action as may be proper, In the light of the facts, to effectuate the purposes, of the statute which It Is charged to administer. 1 Tex. Jur. Sup. 113, Administrative Law and Procedure, Sec. 30. the the Under Article 41a, Vernon's Civil Statutes, supra, Texas State Board of Public Accountancy is charged with administration of'said Act. It is the duty of the Board to determine for itself whether it shall request the Attorney General to file suit, in the name of the Board as plaintiff, against the person complained of as defendant, for the pur- pose of cancelling or suspending said person's certificate or permit to practice accountancy In Texas. In order that the Board may arrive at a satisfac- tory determination of the need for a lawsuit to be filed by the Attorney General upon request of the Board, the Board must be adequately apprised of the facts concerning the case under study. The hearings are either investigatory or designed to permit persons who may not have been reached in a previous process of consultation and conference to come forward with evidence. The purpose is not to try a case, but to enlighten the Board, and to protect the private interests against uninformed and unwise action. Accordingly you are advised that the Texas State Board of Public Accountancy is authorized to hold hearings in connection with its investigation as to whether proceed- ings should be instituted for the purpose of cancelling or suspending any certificate or permit granted by the Board. SUMMARY The Texas State Board of Public Accountancy Is authorized to hold hearings in connection with its investigation as to whether proceedings should be instituted for the purpose of canoelling or suspending any certificate or Honorable Jay A. Phillips, Page 4 (WW- 1. permit granted by the Board. Very truly yours, WILL WILSON Attorney General of Texas BY Marvin R. Thomas, Jr. Assistant MRT:jl APPROVED: OPINION COMMITTEE: H. Grady, Chandler, Chairman Mary Kate Wall Wm. R. Hemphill Roger Daily REVIEWED FOR TKE ATTORNEY GENERAL BY: Geo. P. Blackburn