STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 82-1053

)

GULF COUNTY CETP, 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 4, 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: Brenda Arnold

Post Office Box 555

Port St. Joe, Florida 32456 BACKGROUND

On March 12, 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, Gulf County CETP, Inc., under the Comprehensive Employment and Training Act (CETA). In the Final Determination, Petitioner recommended that $6,296 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 April 12, 1982, with a request that a Hearing Officer be assigned to conducts a hearing. By Notice of Hearing dated May 4, 1982, the final hearing was scheduled for June 4, 1982, in Tallahassee, Florida.

At the final hearing Petitioner presented the testimony of Henry Warren, Internal Auditor Supervisor, and offered Petitioner's Exhibits 1-3, each of which was received into evidence. Respondent presented the testimony of its contract manager, Brenda Arnold.

Pursuant to the provisions of Rule 28-5.1055, Florida Administrative Code, the undersigned made a diligent inquiry of Respondent's prospective representative, Brenda Arnold, during a non-adversary proceeding on the record to assure that Arnold 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 $3,052 in questioned costs should be allowed while Respondent agreed to repay $188 in disputed costs. Remaining at issue herein is whether Respondent should be required to repay

$3,056 in monies allegedly expended in violation of applicable rules and standards. At the request of the parties the record was left open for fifteen days after the hearing in order for the parties to attempt to amicably resolve two of the three remaining items in dispute. Such an accord was not reached.

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 (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, Gulf County CETP, Inc. entered into Contract Nos. 79MP-1A-02-33-08, 79-MP-3C-02-33-08 and 79MP-1F-02- 033-08 authorizing the expenditure of an undisclosed amount of grant funds between December 4, 1978 and September 30, 1979.

   
   

4. A subsequent audit by Alexander Grant and Company, an independent accounting firm, questioned the propriety of $7,626 of expenditures made by Respondent. Thereafter, the Division rendered its Final Determination in which it recommended that $6,296 in costs be disallowed. As agreed upon by the parties, three items totaling $3,056 are in dispute and involve (a) the failure to provide supporting documentation to substantiate a $56 cost, (b) a payment to participants after the contract period had ended ($2,111) and (c) an erroneous computation of hourly wages in excess of that authorized by the contract ($891).

   
   

5. Respondent issued check number 309 to Tela Credit Union in the amount of $53.86 under Contract No. 79MP-1A-02-33-08. The expenditure was questioned by the field auditor and Division on the ground there was no paid invoice to

   support the charge. However, Tela Credit Union was not a vendor. Rather, it had entered into a contract with Respondent to provide on-the-job training to certain participants. The expenditure represented payment by Respondent for 35 hours of training at $1.35 per hour. Respondent also has the cancelled check and a time and attendance sheet to support the charge. Therefore, the cost was appropriate, supported by adequate documentation, and should be allowed.

   
   

6. Contract No. 79MP-3C-02-33-08 terminated on August 3, 1979. Respondent continued to compensate four individuals for two weeks after the contract ended. During the course of the hearing, Respondent agreed that $790 should be disallowed but disputes the Division's recommendation that an additional $1,321 be repaid. The latter amount purportedly represents $1,321 in wages paid to J. Lewis over a two-week period. However, J. Lewis only received $358.26 during the entire contract period, of which $171.24 was recommended for disallowance and is included in the $791 agreed to be repaid by Respondent. Accordingly, the

   $1,321 is an erroneous figure and should not be disallowed.

   
   

7. In 1979, Respondent assumed the responsibility for administering various CETA contracts previously administered by other entities in Gulf County, including the City of Wewahitchka. The latter contract compensated participants at a higher hourly rate than was authorized in Respondent's contract.

   Respondent continued to compensate three individuals at the prior higher rate which resulted in overpayments of $891. Because no modification of the contract was obtained, the payments were in contravention of the contract, and should not be allowed.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. Petitioner has challenged the propriety of a $54 expenditure on the ground "supporting documentation could not be located to substantiate the cost." However, Respondent produced (a) a cancelled check and (b) a time and attendance sheet to support the charge. Accordingly, the questioned cost should be allowed.

   
   

10. It is next alleged that Respondent continued to compensate four individuals in the amount of $2,111 under Contract No. 79MP-3C-02-33-08 after the contract had expired. Respondent concedes that $790 in compensation was paid in contravention of the terms of the contract. The record discloses, however, that the remaining monies in dispute were never properly identified and were not, as Petitioner contended, the wages received by one participant over a two-week period. Having failed to properly identify the funds in dispute, and whether their expenditure violated a regulation or the contract, the questioned costs ($1,321) should be allowed.

    
    

11. Petitioner also questions the payments to three participants under Contract No. 79MP-1F-02-033-08 at a rate higher than authorized by the contract. The evidence discloses that no modification to the contract was obtained to authorize such payments and, accordingly, $891 in costs should be disallowed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent repay $790 in questioned costs under Contract

No. 79MP-3C-02-33-08 and $891 in questioned costs under Contract No. 79MP-1F-02- 033-08. All other costs still in issue should be allowed.

DONE and ENTERED this 6th day of July, 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 6th day of July, 1982.

COPIES FURNISHED:

Chad J. Motes, Esquire

Suite 131-Montgomery Building

2562 Executive Center Circle, East Tallahassee, Florida 32301

Brenda Arnold

Post Office Box 555

Port St. Joe, Florida 32456

Honorable Wallace E. Orr Secretary, Department of Labor and Employment Security

Suite 206, Berkeley Building Koger Center

2590 Executive Center Circle, East Tallahassee, Florida 32301

Docket for Case No: 82-001053

Orders for Case No: 82-001053