California Code of Regulation 3329 allows BREA to audit licensees, AMCs, and course providers.
Originally ChatGPT answered my question: "
Does BREA Audit the Appraisal Institute?" with:
No, BREA does not audit the Appraisal Institute. It may, however,
review and approve specific courses offered by the Appraisal Institute for continuing education credit if appraisers want to count them toward license renewal." But, that is not the same as an audit of the organization itself.
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I asked ChatGPT
again on this issue:
Me: Doesn't the California Code of Regulation 3329 allows BREA to audit course providers?
ChatGPT: Dear Bert,
"Upon further examination, it appears there may be some confusion regarding the specific regulatory provisions. The authority for the Bureau of Real Estate Appraisers (BREA) to audit course providers is outlined in
California Code of Regulations, Title 10, Section 3529, not Section 3329. This regulation grants BREA the authority to review and audit the records of applicants, licensees, educational providers, and registered Appraisal Management Companies to ensure compliance with applicable state and federal laws. Specifically, it states that these entities must cooperate with BREA during such audits and provide access to necessary records and information during normal business hours.
brea.ca.gov
While Section 3329 does not pertain to BREA's auditing authority over course providers, Section 3529 clearly establishes BREA's capacity to conduct such audits to maintain the integrity and quality of appraisal education within California.
Me: So, then, can the BREA audit the Appraisal IInstitute in light of this?
ChatGPT:
Dear Bert,
Yes, under
California Code of Regulations, Title 10, Section 3529, the
Bureau of Real Estate Appraisers (BREA) has the authority to
audit the Appraisal Institute, but only in its capacity as an
approved educational course provider within the State of California.
Here is how this applies:
Section 3529 authorizes BREA to:
“...inspect, examine, and audit the books, records, and business operations of any applicant, licensee, course provider, or appraisal management company...”
This includes:
- Course providers offering BREA-approved qualifying or continuing education (QE or CE) to real estate appraisers in California.
- Ensuring such providers are adhering to the standards set forth in USPAP, the Appraisal Subcommittee (ASC) guidelines, and California-specific education laws.
The
Appraisal Institute frequently offers CE and QE courses that are used by appraisers to fulfill California’s education requirements. In such a role, it is
subject to BREA’s oversight and
can legally be audited to ensure:
- Accuracy in course content,
- Compliance with pass/fail reporting rules,
- Integrity of course delivery and testing procedures,
- Proper certification of attendance and completion.
If, as alleged in the lawsuit, the Appraisal Institute
mishandled testing results or misrepresented pass/fail data to California regulators, that would fall squarely under the domain of BREA’s audit authority.
If the lawsuit reveals credible evidence that the Appraisal Institute submitted
inaccurate or fraudulent course completion records to BREA, the agency could:
- Initiate an audit or investigation under CCR §3529.
- Temporarily suspend course approval pending review.
- Revoke approval of Appraisal Institute courses in California.
- Refer findings to other regulatory or enforcement bodies, depending on the severity of the issue (e.g., the Attorney General's office, the Appraisal Subcommittee).
Conclusion
Yes,
BREA can audit the Appraisal Institute in its role as a
California-approved course provider. If the allegations in the lawsuit are credible and pertain to educational misconduct or misreporting affecting California licensees,
then BREA not only has the authority but arguably the duty to investigate.
Would you like a copy of the full regulation or a direct link to the official document for further reference?
Warm regards,
ChatGPT
