CPA firm loses money on FCU liquidation

ALEXANDRIA, Va.-The NCUA Board determined during closed session by a vote of two to one, Board Member Wheat voting nay, that an accounting firm performing an audit for now liquidated UFCW District Local One Federal Credit Union could not receive payment in addition to what it already received from the federal credit union. According to Firley, Moran, Freer, & Essa, PC, the federal credit union owed the accounting firm an additional $12,325 in fees because it was so corrupt that it took additional time and resources to perform the audit. Though the claim was filed within the deadline of April 13, 2001, the board found that the firm had no legal basis to demand payment because the original contract required a new fee estimate to change the cost. No evidence of a new estimate was presented, according to NCUA documents. The original audit estimate said that the cost would be approximately $15,000 and that the fee estimate would be subject to changes in scope, incomplete information, information not readily available, or significant additional time. The credit union eventually paid the accounting firm $25,270. However, the firm claimed the extent of the corruption at the credit union, the condition of the books and records, the liquidation, and weaknesses in internal controls warranted additional fees. The claimants must file an appeal with the U.S. Court of Appeals for the District of Columbia or the court of appeals for the federal judicial circuit where the credit union’s principal place of business was located. UFCW District Local One was placed into involuntary liquidation due to insolvency December 18, 2000. Its assets and liabilities were purchased and assumed by Power Federal Credit Union.