STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 82-882

) SUWANNEE RIVER ECONOMIC 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 June 14, 1982, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Chad J. Motes, Esquire

Montgomery Building, Suite 131 2562 Executive Center Circle, East Tallahassee, Florida 32301

For Respondent: Frances Jackson

Post Office Box 70

Live Oak, Florida 32060 BACKGROUND

On March 14, 1982, Petitioner, Department of Labor and Employment Security, Division of Employment and Training, issued its Final Determination as to the expenditure of funds by Respondent, Suwannee River Economic Council, Inc., under the Comprehensive Employment and Training Act (CETA). In the Final Determination, Petitioner recommended that certain expenditures be disallowed for Respondent's failure to comply with applicable regulations, and that it repay the Department all monies improperly expended.

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 March 31, 1982, with a request that a Hearing Officer be assigned to conduct a bearing. By Notice of Hearing dated April 29, 1982, the final hearing was scheduled for May 28, 1982, in Tallahassee, Florida. By agreement of the parties the matter was rescheduled to June 14, 1982, at the same location.

At the final hearing Petitioner presented the testimony of James Harris, Division Internal Auditor, and offered Petitioner's Exhibits 1-3, each of which

was received into evidence. Respondent presented the testimony of its Executive Director, Frances Jackson.

Pursuant to the provisions of Rule 28-5.1055, Florida Administrative Code, the undersigned made a diligent inquiry of Respondent's prospective representative, Frances Jackson, during a non-adversary proceeding on the record to assure that Jackson 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.

The parties were given the opportunity to file proposed findings of fact and conclusions of law; however, they waived their right to do so.

At the outset of the hearing Petitioner agreed that $1,277 in question costs should be allowed. During the course of the hearing Respondent agreed that $88 in costs should be repaid. Remaining at issue herein is whether Respondent should be required to repay $6,478 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 to economically disadvantaged, unemployed or underemployed persons. Petitioner, Department of Labor and Employment Security, Division of Employment and training (Division), 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.

   
   

2. The Division, in conjunction with an 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 Division containing its determination of allowable and non-allowable costs.

   
   

3. As is pertinent here, Petitioner and Respondent, Suwannee River Economic Council, Inc., entered into Contract Nos. 79MP-2U-03-44-17 and 80ET-86- 03-71-17-021 authorizing the expenditure of an undisclosed amount of grant funds between October 1, 1973 and September 30, 1980.

   
   

4. A subsequent audit by Alexander Grant and Company, an independent accounting firm, questioned the propriety of certain expenditures made by Respondent under those contracts. A Final Determination was then entered by Petitioner recommending that the questioned costs be disallowed. At issue herein are two items totaling $6,478 and which relate to the enrollment of two participants in programs for which they were allegedly ineligible.

   
   

5. In April, 1979, Respondent assumed the responsibility of operating a contract previously operated by the Florida State Employment Service (FSES) for Lafayette County. All participants were automatically transitioned to Respondent at that time. Documentation pertaining to participants was not received by Respondent until the contract had expired. When an audit by the

   Division was eventually performed, it found that one Terry Sullivan, who had received $4,824 in wages and fringe benefits, was ineligible for enrollment in the program since he had failed to demonstrate he was unemployed for thirty days prior to the date of his application. Sullivan's application had been filed in 1977 and responsibility for determining his initial eligibility was that of the FSES. Because the initial eligibility was determined by FSES, and no documentation was available to verify Sullivan's eligibility until after the contract term had expired, the costs should be allowed.

   
   

6. Under Contract No. 80ET-86-03-71-17-021, Respondent enrolled Andrew Dennis in a Title II-D program. During his tenure with the program he received

   $1,654 in wages and fringe benefits. According to income guidelines established by the United States Department of Labor, a participant in a Title II-D program living in a household with two persons could not have income exceeding $5,010 for the six months preceding the date of application. Dennis' application reflected he had earned $5,680, which exceeded prescribed income limitations.

   Accordingly, Dennis was ineligible for enrollment, and the costs associated with that participant should be disallowed.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

8. Petitioner has challenged the propriety of a $4,824 expenditure for an ineligible participant under a Title II-D contract in Contract No. 79MP-2U-03- 44-17. There is no dispute between the parties that the individual was not eligible for enrollment in the program. However, the evidence discloses that the Florida State Employment Service (FSES) certified the participant as being eligible in 1977, and Respondent assumed the operation of the program in 1979. Moreover, Respondent received no documentation concerning the individual until after the program was terminated, thereby preventing it from initially screening the application, and making the required periodic verification checks. Under these circumstances, Respondent should not be held accountable for the mistakes of the FSES, and the questioned costs should be allowed.

   
   

9. Petitioner also questions the costs associated with an ineligible participant under Contract No. 80ET-86-03-71-17-021. The evidence supports a conclusion that the participant was indeed ineligible for enrollment in the program, and the costs associated therewith ($1,654) should be disallowed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent repay $1,654 in questioned costs under Contract

No. 80ET-86-03-71-17-021. The questioned costs pertaining to Contract No. 79MP- 2U-03-44-17 should be allowed.

DONE and ENTERED this 25th day of June, 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 25th day of June, 1982.

COPIES FURNISHED:

Chad J. Motes, Esquire

Suite 131-Montgomery Building

2562 Executive Center Circle, East Tallahassee, Florida 32301

Frances Jackson Post Office Box 70

Live Oak, Florida 32060

Wallace E. Orr, Secretary Department of Labor and

Employment Security

206 Berkley Building

2562 Executive Center Circle, East Tallahassee, Florida 32301

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF EMPLOYMENT AND TRAINING

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

Petitioner,

vs. CASE NO. 82-882

SUWANNEE RIVER ECONOMIC COUNCIL, INC.

Respondent.

/

FINAL ORDER

The undersigned, as Director of the Division of Employment and Training, has reviewed the findings and recommendations of Donald R. Alexander, Hearing Officer, Division of Administrative Hearings, which were based upon the evidence presented at a hearing held in Tallahassee, Florida on June 14, 1982. The findings and recommendations are attached hereto, marked Exhibit "A" and thereby made a part hereof.

FINDINGS OF FACT AND CONCLUSIONS

1. The Petitioner has alleged that the Respondent in Administering grants under the Comprehensive Employment and Training Act (CETA) failed to comply with the applicable rules and regulations. As a result thereof, a total of $6,503 was spent in violation of applicable rules and regulations.

   
   

2. The findings of fact and conclusions of law of the Hearing Officer as set out in the Recommended Order are hereby accepted and adopted, except that the undersigned rejects the hearing officer's conclusion of law at paragraph two on page five of the recommended order.

   
   

   The undersigned concludes that according to applicable law the amount of

   $4,824 charged to the contract on account of the ineligible participant is not an allowable expenditure, and that Respondent is liable for the payment of that sum.

   
   

3. It is further found that Respondent did not present adequate evidence to refute the findings of its failure to comply with applicable regulations.

WHEREFORE, it is Ordered:

That Respondent immediately repay $6,503 spent in violation of applicable regulations.

In the event either party disagrees with this determination, an appeal can be filed with Mr. Lawrence Weatherford, Regional Administrator, United States Department of Labor, 1371 Peachtree street, N.W., Room 405, Atlanta, Georgia 30309. The provisions pertaining to the appeal process, 20 C.F.R. 676.88 et. seq., are attached hereto.

Dated this 27th day of, 1982 in Tallahassee, Leon County, Florida.

CHARLES R. RUSSELL, Director

Division of Employment and Training

COPIES FURNISHED:

Frances Jackson

1. Box 70

   Live Oak, Florida 32060

   
   

   Chad Motes

   Suite 131, Montgomery Building 2562 Executive Center Circle East Tallahassee, Florida 32301

   
   

   Henry Warren Internal Audit

   Division of Employment and Training Atkins Building

   2562 Executive Center Circle East Tallahassee, Florida 32301

   
   

   Donald R. Alexander

   Division of Administrative Hearings 2009 Apalachee Parkway

   Tallahassee, Florida 32301

   =================================================================

   AGENCY AMENDED FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA

   DIVISION OF EMPLOYMENT AND TRAINING

   
   

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

   
   

   Petitioner,

   
   

   vs. CASE NO. 82-882

   
   

   SUWANNEE RIVER ECONOMIC COUNCIL, INC.

   
   

   Respondent.

   /

   
   

   AMENDED FINAL ORDER

   
   

   Pursuant to the attached letter of agreement, the Final Order previously entered in this cause is amended as follows:

   
   

   1. The sum of $63 paid to participant Donald Stevens under Contract 80ET- 86-03-71-17-O21 is disallowed due to lack of documentation of eligibility.

      
      

   2. The total amount of disallowed costs which the Respondent is ordered to repay is increased to $6,566 by the addition of the $63 item disallowed in paragraph one above.

WHEREFORE, it is Ordered:

That Respondent immediately repay $6,566 spent in violation of applicable regulations.

Dated this 27th day of January, 1983, in Tallahassee, Leon County, Florida.

CHARLES R. RUSSELL, Director

Division of Employment and Training

COPIES FURNISHED:

Frances Jackson

P.O. Box 70

Live Oak, Florida 32060

Chad Motes

Suite 131, Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32301

Henry Warren, Internal Audit Division of Employment & Training Atkins Building

Tallahassee, Florida 32301

Donald R. Alexander

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

Docket for Case No: 82-000882

Orders for Case No: 82-000882