Can the Washington State Board of Accountancy discipline a CPA who works for the State Auditor for things they did as part of their job?

Plain-English summary

The chair of the Washington State Board of Accountancy asked whether the Board can discipline a Certified Public Accountant who works for a state agency (specifically, the State Auditor) for actions taken inside the scope of that employment.

The AG said probably not. The Washington Public Accountancy Act (RCW Chapter 18.04) gives the Board broad disciplinary jurisdiction over CPAs, including license revocation, suspension, conditions, and fines up to $30,000 (RCW 18.04.295, 18.04.345). But RCW 18.04.350(12) carves out an exception: "Nothing in this chapter prohibits any act of or the use of any words by a public official or a public employee in the performance of his or her duties."

The AG read that exception broadly. Because Board discipline forbids conduct (revoking a license, fining a CPA), it counts as "prohibit[ing]" the underlying act. And the legislature said the Public Accountancy Act cannot prohibit any in-scope public-employee act. So the Board cannot discipline a public CPA for in-scope work.

The Board's own 2020 policy (No. 2020-2) had reached a similar conclusion, drawing the line between in-scope work (no Board jurisdiction) and out-of-scope or ethical conduct (Board jurisdiction retained). The opinion endorses that line.

Things that remain inside Board jurisdiction even for state-employee CPAs:
- Acts of fraud or deceit in renewing a CPA license
- Failure to report a public-agency sanction
- Failure to cooperate with a Board investigation
- Acts of fiscal dishonesty, fraud, or self-dealing outside the scope of employment
- Other conduct outside the scope of public employment

Currency note

This opinion was issued in 2021. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why does the Public Accountancy Act carve out public employees at all?
A: The carve-out (RCW 18.04.350(12)) reflects a legislative choice to leave the regulation of public-employee conduct to other oversight mechanisms (legislative auditors, state HR processes, civil and criminal law) rather than layering professional licensing discipline on top. It also avoids putting state-employed CPAs in the position of having a private board second-guess actions they took as part of their public duties.

Q: Are state-employed CPAs unaccountable, then?
A: No. They are still subject to (a) their employer's HR and discipline processes, (b) the State Auditor's own internal oversight, (c) civil suits where applicable, and (d) criminal law for fraud, theft, or other crimes. Plus the Board retains jurisdiction over their out-of-scope conduct and their fitness for licensure (renewal fraud, failure to report sanctions, etc.).

Q: Where does the line between "in scope" and "out of scope" run?
A: The opinion does not draw the line in the abstract: that's a fact-specific question. The Board's Policy No. 2020-2 takes the position that in-scope means "the quality of performance or judgement of a public employee in [the] course of their employment," while out-of-scope includes ethical violations, licensure-requirement failures, and activities outside official duties. The AG opinion says it does not endorse the Board's specific in/out-of-scope line, only the principle that in-scope conduct is outside Board jurisdiction.

Q: Does this apply to other licensed professionals working for state agencies?
A: The opinion is specifically about RCW 18.04.350(12): the Public Accountancy Act's carve-out. Other professional licensing chapters may have similar carve-outs (worth checking Title 18 RCW chapter by chapter), but the AG's reasoning would not automatically extend to a chapter without a comparable provision.

Q: What if the state employee's conduct is also a crime?
A: The carve-out only applies to "Nothing in this chapter prohibits…" So criminal law (Title 9A RCW), civil claims, and other regulatory regimes remain available against a public CPA whose in-scope conduct crosses those lines. The carve-out is just about the Accountancy Act.

Q: Could the legislature change this?
A: Yes. The opinion explicitly notes that "the legislature could provide more express direction as to the Board's jurisdiction with respect to public employees that could change this analysis." The current result is driven by RCW 18.04.350(12); a clarifying amendment would supersede the AG's reading.

Background and statutory framework

The Washington State Board of Accountancy (created by H.B. 646, 48th Leg., Reg. Sess., § 4 (1983)) is the licensing and disciplinary agency for CPAs, CPA-Inactive certificate holders, CPA firms, and firm owners (WAC 4-30-020). Its enforcement powers under RCW 18.04.295 include license revocation, suspension, practice restrictions, and fines up to $30,000. RCW 18.04.345 lists prohibited practices.

RCW 18.04.350 contains a series of exceptions to the Act's coverage. Subsection (12) is the relevant one: "Nothing in this chapter prohibits any act of or the use of any words by a public official or a public employee in the performance of his or her duties."

The interpretive question the opinion turns on is what "prohibits" means. The AG looks at Merriam-Webster: "to forbid by authority" / "to prevent from doing something." Because Board discipline (license revocation, fines, practice restrictions) forbids conduct, the AG concludes it falls within the meaning of "prohibits" in subsection (12). That reading is reinforced by:

• The plain-meaning rule (Arborwood Idaho, 151 Wn.2d 359; In re Residence of Eaton, 110 Wn.2d 892).
• The canon against superfluity (Spokane County v. Dep't of Fish & Wildlife, 192 Wn.2d 453), if the Board could discipline public CPAs for in-scope work, RCW 18.04.350(12) would have nothing to do.
• Deference to the agency's reasonable interpretation of its own enabling statute (Pub. Util. Dist. 1 of Pend Oreille County v. Dep't of Ecology, 146 Wn.2d 778).
• The rule that statements of legislative purpose (here, RCW 18.04.015(1)(b)(i)'s public-protection language) cannot override unambiguous statutory text (State v. D.H., D.B., 102 Wn. App. 620).

Citations and references

Statutes and regulations:
- RCW Chapter 18.04: Washington Public Accountancy Act
- RCW 18.04.015(1)(b)(i), 18.04.295, 18.04.345, 18.04.350(12)
- WAC 4-30-020, 4-30-046
- Board of Accountancy Policy No. 2020-2 (Public Officials and Public Employees)

Cases:
- Arborwood Idaho, L.L.C. v. City of Kennewick, 151 Wn.2d 359 (2004)
- In re Residence of Eaton, 110 Wn.2d 892 (1988)
- Dep't of Transp. v. State Emps.' Ins. Bd., 97 Wn.2d 454 (1982)
- In re Pers. Restraint Petition of McWilliams, 182 Wn.2d 213 (2014)
- Columbia Riverkeeper v. Port of Vancouver USA, 188 Wn.2d 421 (2017)
- State v. D.H., D.B., 102 Wn. App. 620 (2000)
- Spokane County v. Dep't of Fish & Wildlife, 192 Wn.2d 453 (2018)
- Whatcom County v. City of Bellingham, 128 Wn.2d 537 (1996)
- Pub. Util. Dist. 1 of Pend Oreille County v. Dep't of Ecology, 146 Wn.2d 778 (2002)

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/authority-board-accountancy-discipline-employee-state-auditor-actions-taken-during

Original opinion text

Attorney General Bob Ferguson

BOARD OF ACCOUNTANCY—STATE AUDITOR—Authority Of Board Of Accountancy To Discipline An Employee Of The State Auditor For Actions Taken During The Scope Of Employment

The Accountancy Board likely lacks the authority to discipline a certified public accountant employed by the State Auditor for acts taken within the scope of employment, because the Washington State Public Accountancy Act excludes from its scope any act or the use of any words by a public official or public employee in the scope of employment.

September 21, 2021

The Honorable Mark Hugh, CPA

Chair, Washington State Board of Accountancy

PO Box 9131

Olympia, WA 98507

Cite As:

AGO 2021 No. 5

Dear Chair Hugh:

By letter previously acknowledged, you have requested our opinion on one question, which we paraphrase as follows:

Does the Washington State Board of Accountancy have disciplinary authority for violations of the Washington Public Accountancy Act and Board rules over a Certified Public Accountant licensee who is an employee of a state agency for acts performed within the scope of employment?

BRIEF ANSWER

Probably not. The Washington Public Accountancy Act does not explicitly exclude public officials or public employees acting in the course of their employment from the Board of Accountancy's jurisdiction. But the Act does expressly not prohibit "any act of or the use of any words by a public official or a public employee in the performance of his or her duties." RCW 18.04.350(12). Consistent with the Board's interpretation of this statute, we conclude that it precludes the Board from taking action tantamount to "prohibit[ing]" a public employee or official from acting in the course of their official duties, which would include discipline. The legislature could provide more express direction as to the Board's jurisdiction with respect to public employees that could change this analysis.

BACKGROUND

The legislature created the Washington State Board of Accountancy in 1983 as part of its adoption of the Washington Public Accountancy Act (WPAA). Substitute H.B. 646, 48th Leg., Reg. Sess., § 4 (1983). The WPAA "establishes the [B]oard as the licensing and disciplinary agency for certified public accountants (CPA), CPA-Inactive certificate holders, CPA firms, and owners of CPA firms." WAC 4-30-020. According to the Board, its purpose is to "[p]romote the dependability of financial and other information used by providers of capital when assessing the status and performance of those seeking financial resources" by ensuring that persons licensed as CPAs are "[i]nitially qualified, [r]emain qualified, [p]erform competently and [h]eld publicly accountable for the quality of their professional services[.]"[1]

The Board has authority to revoke or suspend CPA licenses, impose conditions on practice, and to impose fines for a variety of causes under RCW 18.04.295 and .345. That authority is subject to RCW 18.04.350(12), which provides that "[n]othing in this chapter prohibits any act of or the use of any words by a public official or a public employee in the performance of his or her duties."

In October 2020, the Board passed Policy No. 2020-2, titled Public Officials and Public Employees.[2] The policy sets out the Board's position on its authority to enforce the WPAA and its rules in light of RCW 18.04.350(12). The Board has adopted a position that its authority over public employees who are licensed CPAs extends to ethical violations, failures to abide by licensure requirements, and activities outside the scope of employment, but not to "the quality of performance or judgement of a public employee in course of their employment." Policy No. 2020-2, at 1 [sic]. According to the policy, conduct of licensed state employees that would fall within the Board's purview include acts of fraud or deceit in renewing a CPA license, failure to report a sanction issued by a public agency, failure to cooperate with a Board investigation, and acts of fiscal dishonesty, fraud, and self-dealing. Policy No. 2020-2, at 2. The policy recognizes that public employees are not required to be licensed as CPAs and disavows authority to discipline public employees who are not licensed as CPAs when performing their official duties. Policy No. 2020-2, at 1.

Your opinion request seeks guidance on whether the Board has disciplinary authority for violations of the WPAA and Board rules over a CPA employed by a state agency for acts performed within the scope of employment.

ANALYSIS

For the reasons discussed more fully below, we conclude that the Board most likely lacks authority to discipline publicly-employed CPAs for acts performed within the scope of employment. Note that this analysis expresses no opinion on whether Board Policy No. 2020-2 properly distinguishes between conduct that falls within and outside the scope of employment.

When interpreting a statute, a court's fundamental objective is to "ascertain and carry out the legislature's intent." Arborwood Idaho, L.L.C. v. City of Kennewick, 151 Wn.2d 359, 367, 89 P.3d 217 (2004). If a statute is unambiguous, its meaning is to be derived from the language of the statute alone. In re Residence of Eaton, 110 Wn.2d 892, 898, 757 P.2d 961 (1988). If, however, the intent of the statute is not clear from the language of the statute by itself, the court may resort to tools of statutory construction to derive a statute's meaning. Dep't of Transp. v. State Emps.' Ins. Bd., 97 Wn.2d 454, 458, 645 P.2d 1076 (1982). Courts determining the plain meaning of a statute may also consider "related statutes or other provisions in the same act that disclose legislative intent." In re Pers. Restraint Petition of McWilliams, 182 Wn.2d 213, 217, 340 P.3d 223 (2014).

Beginning with the plain language, the statute provides that "[n]othing in this chapter prohibits any act of or the use of any words by a public official or a public employee in the performance of his or her duties." RCW 18.04.350(12). Because your question is concerned with acts that constitute the performance of official duties, the issue becomes whether a Board disciplinary action would "prohibit" such conduct.

The plain meaning of a nontechnical statutory term may be discerned from its dictionary definition. Columbia Riverkeeper v. Port of Vancouver USA, 188 Wn.2d 421, 435, 395 P.3d 1031 (2017). Merriam-Webster defines "prohibit" as: "to forbid by authority" and "to prevent from doing something[.]"[3] The WPAA contains numerous requirements that a CPA must observe, as do the Board's rules—all of which are promulgated pursuant to authority granted by the WPAA. E.g., RCW 18.04.345 (listing various prohibited practices); WAC 4-30-046 (requiring licensees to act with "professional competence" when providing professional services). A Board disciplinary action to enforce the WPAA or its own rules can result in revocation of licensure, a fine up to $30,000, or other penalties. RCW 18.04.295. Accordingly, an act taken within the scope of public employment that runs afoul of the WPAA or Board rules could reasonably be said to be "forbidden by authority" and therefore prohibited for purposes of RCW 18.04.350(12).

Under a plain read of RCW 18.04.350(12), then, the WPAA (and by extension, Board rules) cannot impede any act taken by a public employee that is within the scope of employment. It follows that the Board cannot discipline a public employee for such acts, which are effectively not prohibited by the WPAA. And although the legislative purpose of the WPAA includes "protect[ing] the public interest" by requiring that CPAs "conduct themselves in a competent, ethical, and professional manner," RCW 18.04.015(1)(b)(i), a statement of legislative intent is not substantive law and cannot be used to override unambiguous statutory language, State v. D.H., D.B., 102 Wn. App. 620, 627, 9 P.3d 253 (2000).

Even if the statute were ambiguous on the question, the same result would follow using tools of statutory construction. One such rule provides that "[s]tatutes must be interpreted and construed so that all the language used is given effect, with no portion rendered meaningless or superfluous." Spokane County v. Dep't of Fish & Wildlife, 192 Wn.2d 453, 458, 430 P.3d 655 (2018) (quoting Whatcom County v. City of Bellingham, 128 Wn.2d 537, 546, 909 P.2d 1303 (1996)). RCW 18.04.350(12) would serve no apparent purpose if the WPAA were construed to permit the Board to discipline a publicly-employed CPA for acts taken within the scope of employment; such a result could be achieved without the inclusion of RCW 18.04.350(12). Further, an agency's interpretation of an ambiguous statute is accorded great weight, provided it does not conflict with the statute. Pub. Util. Dist. 1 of Pend Oreille Cnty. v. Dep't of Ecology, 146 Wn.2d 778, 790, 51 P.3d 744 (2002). Here, the Board has expressly interpreted RCW 18.04.350(12) to divest it of authority "to judge the quality of performance or judgement of a public employee in course of their employment" while allowing it to discipline for matters it considers to be outside the scope of employment. Board Policy No. 2020-2, at 1 [sic]. This agency interpretation of RCW 18.04.350(12) is consistent with the conclusion reached by this opinion. As noted, however, the legislature may provide more express direction that could change this analysis.

We trust that the foregoing will be useful to you.

ROBERT W. FERGUSON

Attorney General

s/ Gregory K. Ziser

GREGORY K. ZISER

Assistant Attorney General

360-534-4862

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[1] https://acb.wa.gov/about-us/boards-purpose (last visited Sept. 17, 2021).

[2] https://acb.wa.gov/sites/default/files/2020-2PublicOfficialsandPublicEm….

[3] Prohibit, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/prohibit (last visited Sept. 17, 2021).