Here’s an update on several issues related to the Business Computer Training Institute:
More litigation expected: The Pierce County lawsuit benefited only students who attended Business Computer Training Institute campuses in Washington state. Attorney Darrell Cochran said he will file a similar lawsuit in Oregon on behalf of BCTI students there.
Cochran also might sue a private accrediting agency on behalf of BCTI students. A News Tribune investigation found the Accrediting Council for Continuing Education & Training doubted BCTI’s quality for years but failed to act on those concerns until after the school closed.
For more information on the lawsuits, call Cochran at 253-620-6620.
Accounting investigation: A certified public accountant and fraud examiner who reviewed BCTI’s financial statements for The News Tribune questioned the school’s financial standing in the years leading up to its 2005 closure.
The accountant, C. Donald Smith, said the school’s owners apparently transferred more than $6.2 million from BCTI to affiliated companies from 1996 to 2004 without properly classifying the transactions.
The effect might have been to make BCTI’s net worth look fine to federal regulators, though in reality the school appeared to be “worthless,” according to Smith.
At the request of The News Tribune, the state Board of Accountancy reviewed BCTI’s audited financial statements. The board opened an investigation of James Bedinger, the California accountant who prepared the statements.
In December, the Board of Accountancy concluded that Bedinger prepared the statements in accordance with professional standards. But that’s not to say BCTI’s finances were in good shape.
Thomas Sadler, the board’s director of investigations, said he did not analyze the financial statements with the intent of determining BCTI’s financial standing. But he saw enough to conclude “that company’s not very well off.” He said Bedinger provided the information needed for people reading the statement to draw their own conclusion.
Though Bedinger had an individual CPA license to practice in Washington, the agency found his firm was not licensed to operate here. The board fined Bedinger $750 and required him to pay an additional $375 for investigative and legal costs.
New regulations: Last spring the Legislature imposed tougher requirements on private vocational schools. Advocates cited BCTI as an example of why new requirements are needed.
Since then the state Workforce Training and Education Coordinating Board has been developing specific requirements. Among them:
• To demonstrate their financial stability, schools would have to maintain a ratio of current assets to current liabilities of at least 1:1 as well as maintain a positive net worth for its most recent fiscal year and have no operating losses for the past two years.
• Accredited schools would have to submit audited financial statements annually.
• Instructors would need at least two years of work experience, post-secondary education or a combination of the two in the subject they teach.
• The workforce board could designate a school as “at risk” if it fails to meet financial standards, generates substantiated student complaints or experiences a big drop in enrollment or significant staff turnover.
• The board could place schools on probation and take corrective action.
The board will hold a public hearing on the new rules from 3:30 to 6 p.m. Tuesday at the Workforce Training and Education Coordinating Board office at 128 10th Ave. S.W., sixth floor, Olympia.
More information is available online at www.wtb.wa.gov.
