STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF LABOR AND )

EMPLOYMENT SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1162

) LAKE COUNTY BOARD OF COUNTY ) COMMISSIONERS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on November 1, 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: Sanford A. Minkoff, Esquire

101 East Maud Street Tavares, Florida 32778

ISSUE

Whether respondent should be required to repay $16,808 in CETA funds allegedly expended for unallowable purposes.

BACKGROUND

By letter dated April 5, 1982, petitioner Department of Labor and Employment Security ("Department") claimed respondent Lake County Board of County Commissioners ("County") should repay a sum of $35,808 in unallowable costs under the terms of a CETA (Comprehensive Employment and Training Act) grant and applicable regulations. The County disputed the Department's claim and requested a hearing. On April 20, 1982, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer to conduct the requested hearing.

On June 29, 1982, the Department reduced its claim for repayment to

$16,808.

Hearing was set for July 12, 1982. On June 11, 1982, the Department indicated that the parties would submit a stipulation of facts, thereby

obviating the need for a hearing. The scheduled hearing was thus continued. After the parties failed to submit a stipulation of facts, hearing was reset for November 1, 1982.

At hearing, the Department called Jerry Jessup as its only witness, and Petitioner's Exhibits A through D were received. The County called Jim Flowers as its witness, and Respondent's Exhibit A 1/ was received.

Neither party submitted proposed findings of fact. No transcript of hearing has been filed.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT

1. From October 1, 1978, to September 30, 1980, the audit period, the County implemented CETA grants of approximately $5,421,000. The Department's Division of Employment and Training, which serves as the state's prime sponsor under CETA, audited the County's records and disallowed certain expenditures. Those which remain in dispute are addressed below. (Testimony of Jessup, Flowers.)

   
   

2. Wage and Fringe Benefits Paid to Kathryn Mabery. (CETA Subgrant Nos. 79MP-26-06-45-01 and 80ET-86-45-01-016, Title II-D)

   
   

3. The Department contends that wage and fringe benefits, totaling $9,258, paid to participant Kathryn Mabery should be disallowed because she was not unemployed 15 out of the 20 weeks prior to her application, the Title II-D eligibility criteria of 20 CFR 675.5-5.

   
   

4. On her August 13, 1979, application, Ms. Mabery indicated that she was last employed by Maryland Fried Chicken on May 13, 1979 2/ On August 15, 1979, the County correctly found her eligible for Title VI funding, which requires that an applicant be unemployed for at least ten out of 12 weeks prior to application.

   
   

5. The County enrolled her as a clerical aide, with a starting date of August 20, 1979. But this was a CETA Title II-D position, not a Title VI position. She was thus paid, out of Title II-D funds, wages and fringe benefits totaling $9,258.

   
   

6. In effect, on August 20, 1979, the County transferred Kathryn Mabery from the Title VI CETA program, for which she was eligible, to a Title II program, a program for which she was not eligible on August 15, 1979. (Testimony of Jessup, Flowers; P-1.)

   
   

7. Wages and Fringe Benefits Paid to Edward Jackson. (CETA Subgrant No. 79MP-3C-06-45-01, Title IV)

   
   

8. The Department contends that wages ($789) and fringe benefits ($44) totaling $833 paid to participant Edward Jackson should be disallowed because he was 13 years old at the time of enrollment. Participants in CETA Title IV programs must be between 14 and 21 years old at the time of enrollment. 20 CFR 676.6-10(b).

9. The County, however, did not know he was 13--and thereby ineligible-- because both Edward Jackson and his mother signed eligibility applications which incorrectly stated he was 14 years old. He was subsequently enrolled in the CETA program, employed in the Mount Dora public works department, and paid a total of $833.

   
   

10. The Department replies that Edward Jackson subsequently submitted to the County a student work permit (required for minors 12 through 15 years old) indicating his true age to be 13, and that the County failed to detect the discrepancy. Work permits, however, are a state requirement; they are not used to determine CETA eligibility. They were, in fact, issued after eligibility certification. When the County received them, they were routinely filed by clerical workers. The Department showed no duty on the part of the County to examine post-eligibility certification documents to confirm the initial eligibility determination.

    
    

11. If the County had been aware of Jackson's true age, it would have immediately terminated him from the CETA program. His enrollment was not the result of a staff error or a failure to follow CETA eligibility procedures. It was attributable to falsification of eligibility certification documents by Edward Jackson and his mother. (Testimony of Jessup, Flowers; R-1.)

    
    

12. Wages and Fringe Benefits Paid to Iola Bing. (CETA Subgrant Nos. 80ET-86-06-45-01-016 and 79MP-2U-06-45-01, Title II-D)

    
    

13. The Department contends that wages ($5,196) and fringe benefits ($1,485) totaling $6,681 paid to participant Iola Bing should be disallowed because she did not meet the "Economically Disadvantaged" eligibility requirement of 20 CFR 675.5. Under that requirement, an applicant who receives "public assistance" is eligible. The County's intake staff determined that, since Ms. Bing was receiving Food Stamps, she satisfied the "public assistance" requirement. Federal and state CETA officials subsequently determined that Food Stamps were not "public assistance" within the meaning of CETA regulations. The Department seeks to retroactively apply that interpretation here.

    
    

14. But the Department has not shown why Food Stamps should not, and cannot reasonably be considered "public assistance within the meaning of 20 CFR 675.5-5 and 676. No federal or state regulation has been cited which explicitly, or implicitly, disqualifies Food Stamps as public assistance." Neither has the Department shown that the County knew, or should have know, that Food Stamps were not "public assistance." Further, it appears that state officials may have advised County CETA workers that Food Stamps were a form of "public assistance."

    
    

15. The Department has not shown, or even asserted, that any of the County's alleged errors were fraudulent; that the County, once it became aware of an ineligible participant or questioned activity, failed to take immediate corrective action; or that the County's eligibility determination procedures were inadequate or CETA management systems were not followed.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes (1981).

17. The Department, through its Division of Employment and Training, administers the federal CETA program in Florida. See, Section 450.50 et seq. Florida Statutes (1981). Here, it alleges that, in several instances, County CETA funds were spent for unauthorized purposes and seeks repayment. It thus has the burden of proving its allegations. See, J.W.C. Co. v. Dept. of Transportation, 396 8o.2d 778 (Fla. 1st DCA 1981).

    
    

18. As to Wages and Benefits Paid Kathryn Mabery. CETA eligibility regulations, 20 CFR 675.5-1(c), provide that participants may transfer between CETA programs "if they meet the eligibility requirements for such other . . . program at the time that they were originally determined eligible for their first CETA . . . program." Id.

    
    

19. The evidence establishes that the County did not abide by this regulation, in that Ms. Mabery was transferred to the Title II-D program, a program for which she was not eligible when she was admitted to her first CETA program. The Department is therefore entitled to repayment of $9,258, monies which were expended in violation of CETA regulations.

    
    

20. As to Wages and Benefits Paid Edward Jackson. Although $833 was paid to this underaged and therefore ineligible participant, there is no showing that the County was, in any way, at fault. It had a right to rely on the information provided by the applicant and his mother.

    
    

21. The federal CETA rules envision that incidents such as this may occur, and allow the federal Grant Officer, or his delegate, to "forgive" repayment.

    20 CFR 676.88. A fair application of these rules supports a conclusion that the County should not be required to repay the disputed $833.

    
    

22. As to Wages and Benefits Paid Iola Bing. The Department has not cited any federal or state rules which declare that Food Stamps do not qualify as "public assistance" within the meaning of CETA rules. Neither has it shown, on the record, why Food Stamps should not be considered "public assistance." See, Anheuser-Busch, Inc. v. Dept. of Business Regulation, 393 So.2d 1177 (Fla. 1st DCA 1981). The Department, therefore, is not entitled to repayment of the disputed $6,681. Even if it were, the repayment should be "forgiven" by application of 20 CFR 676.88.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the County be required to repay the Department $9,258.

DONE and RECOMMENDED this 23rd day of December, 1982, in Tallahassee, Leon County, Florida.

R. L. CALEEN, JR. 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 23rd day of December, 1982.

ENDNOTES

1/ Petitioner's and Respondent's Exhibits will be referred to as "P- " and "R- ", respectively.

2/ By subsequent affidavit, the truth of which was stipulated by counsel, Ms. Mabery stated that her employment ended, instead, on or before May 6, 1979. (R- A)

COPIES FURNISHED:

Chad J. Motes, Esquire

Suite 131, Montgomery Building 2562 Executive Center Circle,

East

Tallahassee, Florida 32301

Sanford A. Minkoff, Esquire

101 East Maud Street Tavares, Florida 32778

Wallace E. Orr, Secretary Department of Labor &

Employment Security Suite 206, Berkley Building

2590 Executive Center Circle, East Tallahassee, Florida 32301

Docket for Case No: 82-001162

Orders for Case No: 82-001162