Tier Technologies Inc. / TIER

About Tier Technologies Inc.

10780 Parkridge Blvd., Fourth Floor, Reston, Va. 20191
www.tier.com | 571-382-1000 | Founded: 1991

Industry: Information Technology | Category: Top 100 Companies

Tier has been dogged by accounting difficulties. Toward the end of 2004, PricewaterhouseCoopers severed its relationship with the company. Though it delivered a "clean" audit, the auditors identified material weaknesses in Tier's internal controls over financial reporting. Tier attributed the problem largely to moving its accounting operations from its former headquarters in California to Reston, and the company soon hired McGladrey & Pullen LLP to audit its books. Next the firm announced that it was letting go Chief Financial Officer Jeffrey A. McCandless, who was replaced by David E. Fountain.
In the fall, Tier announced that it would restate its earnings for fiscal years ended Sept. 30 in 2002, 2003 and 2004. In filings with the Securities and Exchange Commission, the company said insufficient funds from child support payments made the accounting corrections necessary. In essence, checks from some deadbeat parents bounced, which caused Tier to miscalculate revenue and pay out more money than it had collected. The company handles approximately $4 billion in child-support payments for eight states. The company said it later expanded the review of its past financial statements to several other matters.
In March of this year, Tier said it expected the restatements to reduce the company's cumulative pretax earnings by only $1.5 million to $2.5 million between Sept. 30, 2001, and June 30, 2005.
But the company's tone turned more dire on April 19, when it said that the law firm of Ropes & Gray LLP, which it retained to lead an independent investigation, "conducted an interview with a former Tier executive that identified a number of serious new allegations relevant to the restatement-related issues that are being reviewed as part of the independent investigation." The law firm advised the board of directors' audit committee and its advisers to make further inquiries.
The restating of earnings delayed Tier's filing of its annual 10-K report, which has threatened its listing on the Nasdaq stock exchange. Tier appealed Nasdaq's notice that it faced potential delisting and was granted a filing extension until June 5.
The company's Official Payments Corp. recently renewed its contract with the D.C. Office of Tax and Revenue.
In its fiscal third quarter, ended June 30, the company said it had earned $1.7 million (9 cents a share), compared with $914,000 (5 cents) in the comparable period a year earlier.

2007 Financial Data

Total employees: 912 | Local employees: 128