STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF LABOR & EMPLOYMENT ) SECURITY, DIVISION OF EMPLOYMENT ) AND TRAINING, )

)

Petitioner, )

)

vs. ) CASE NO. 81-3194

) TRI-COUNTY COMMUNITY COUNCIL, ) INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on March 8, 1982, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Sonja P. Mathews, Esquire

Suite 117-Montgomery Building

2562 Executive Center Circle, East Tallahassee, Florida 32301

For Respondent: Agnes Miramontes

301 North Oklahoma Street Bonifay, Florida 32425

BACKGROUND

On December 1, 1981, Petitioner, Department of Labor and Employment Security, Division of Employment & Training, issued its Final Determination as to the expenditure of funds by Respondent, Tri-County Community Council, Inc., under the Comprehensive Employment and Training Act (CETA). In the Final Determination, Petitioner recommended that $652 in expenditures be disallowed for Respondent's failure to comply with applicable regulations, and that it repay the Department that amount of monies.

Respondent disputed this recommendation and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was forwarded to the Division of Administrative Hearings on December 18, 1981, with a request that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated January 20, 1982, the final hearing was scheduled for March 8, 1982, in Tallahassee, Florida.

At the final hearing Petitioner presented the testimony of Henry M. Warren, Division Internal Audit Supervisor, and offered Petitioner's Exhibits 1 and 2, each of which was received into evidence. Respondent presented the testimony of its Executive Director, Agnes Miramontes.

Pursuant to the provisions of Rule 28-5.1055, Florida Administrative Code, the undersigned made a diligent inquiry of Respondent's prospective representative, Agnes Miramontes, during a non-adversary proceeding on the record to assure that Miramontes was qualified to appear in this proceeding and capable of representing the rights and interests of Respondent. Such a finding was made and read into the record.

Proposed findings of fact and conclusions of law were filed by Petitioner on March 18, 1982, and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached, or not supported by competent and substantial evidence.

At the outset of the hearing, Petitioner and Respondent stipulated that (1)a $170 expenditure in dispute was made in accordance with Department regulations and would be allowed if a subsequent Department audit verified said charges, (2) $39 out of a total of $255 in disputed charges should be allowed, and (3) expenditures in the amount of $227 were correctly disallowed. Remaining at issue is whether Respondent should be required to repay $216 in monies allegedly expended in violation of applicable rules and standards.

Based upon all the evidence, the following findings of fact are determined: FINDINGS OF FACT

1. The State of Florida receives grant monies from the United States Department of Labor under the terms of the Comprehensive Employment and Training Act (CETA). The monies are to be used to provide job training and employment opportunities for economically disadvantaged, unemployed or underemployed persons. Petitioner, Department of Labor and Employment Security, Division of Employment and Training, acting on behalf of the State, disburses the federal monies to various units of local government pursuant to contracts entered into by Petitioner and those units. Such contracts require that all monies expended thereunder be in accordance with applicable regulations. As is pertinent here, these regulations include Federal Office of Management and Budget Circular A- 102, Attachment K.

   
   

2. The Department's Internal Audit Supervisor, in conjunction with an outside independent certified public accounting firm, is responsible for auditing CETA contracts to insure compliance with applicable regulations. Any costs found to be in contravention of Federal or State regulations are recommended to be disallowed. After the audit is completed a Final Determination is issued by the Department containing its determination of allowable and non-allowable costs.

   
   

3. As is pertinent here, Petitioner and Respondent, Tri-County Community Council, Inc., entered into Contract Nos. 79MP-1A-02-77-08 and 80ET-81-12-00-08- 011 to expend a certain amount of grant funds during 1978-1980.

4. The former contract included authorization and funds to purchase a desk. Petitioner's initial audit revealed that Respondent utilized those funds to purchase a calculator although the contract did not authorize it to do so. A post-hearing audit disclosed that the calculator was charged to another contract which authorized that expenditure. Therefore, the purchase of the calculator was in accordance with Department rules, and its cost should be allowed.

   
   

5. Under Contract No. 80ET-81-12-00-08-011 Respondent was authorized to expend funds only for specified items. There was no authorization to purchase office equipment, including stands for a CRT system. Applicable regulations provide that, absent specific authority in a contract to purchase an item, a modification of the contract must be obtained. Despite this constraint, Respondent expended $216 for two stands for a CRT system without seeking modification of its contract.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

7. Pursuant to the provisions of Chapter 17, United States Code 801 et seq. the State of Florida received financial assistance from the United States Department of Labor for the purpose of establishing programs to provide comprehensive employment and training services for "economically disadvantaged persons".

   
   

8. Petitioner is responsible for carrying out the duties and responsibilities reposed by the Department of Labor upon recipients of manpower funds received by the State. Subsection 450.55(2), Florida Statutes. These duties include ". . .(signing) contracts on behalf of the state. . .with program operators contracting with the state under the Comprehensive Employment and Training Act. . ." Subsection 450.55(3), Florida Statutes.

   
   

9. Attachment K of Federal Office of Management and Budget Circular No. A-

   102 sets forth criteria and procedures to be followed by state agencies in requiring subgrantees to report deviations from grant budgets and to request approval for budget revisions. As is pertinent here, they require that:

   
   

   3. For nonconstruction grants, grantees shall request prior approvals promptly from grantor agencies when there is reason to believe that a revision will be necessary for the following reasons:

   
   

   (d) The revisions pertain to the addition of items requiring approval in accordance with the provisions of Federal Management Circular 74-4.

   
   

10. The evidence discloses that Respondent expended $216 in grant funds for equipment not authorized under its contract. Having failed to obtain a modification to the contract, it should be required to repay the Department that amount of money.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent repay $216 in grant funds expended in a manner

inconsistent with Department regulations.

DONE and ENTERED this 22nd day of March, 1982, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1982.

COPIES FURNISHED:

Sonja P. Mathews, Esquire Suite 117-Montgomery Building

2562 Executive Center Circle, East Tallahassee, Florida 32301

Agnes Miramontes

301 North Oklahoma Street Bonifay, Florida 32425

Docket for Case No: 81-003194

Orders for Case No: 81-003194