STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-485

) LAKE COUNTY BOARD OF COUNTY ) COMMISSIONERS, )

)

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 3, 1983, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Chad J. Motes, Esquire

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

For Respondent: Mary M. McDaniel, Esquire

101 East Maud Street Tavares, Florida 32778

BACKGROUND

On January 26, 1983, Petitioner, Department of Labor and Employment Security, Division of Employment and Training, issued its Final Determination as to the expenditure of funds by Respondent, Lake County Board of County Commissioners, under the Comprehensive Employment and Training Act (CETA). In the Final Determination, Petitioner recommended that $4,052 in expenditures be disallowed for Respondent's failure to comply with applicable regulations, and that it repay the Department that amount of monies.

Repondent disputed this determination 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 2, 1983, with a request that a Hearing officer be assigned to conduct a hearing. By Notice of Hearing dated April 4, 1983, the final hearing was scheduled for June 3, 1983, in Tallahassee, Florida.

At the final hearing Petitioner presented the testimony of Jerry Jessup, an internal auditor, and offered Petitioner's Exhibits 1-5; all were received in evidence. Respondent presented the testimony of Brenda Pullam, an independent

monitoring chief with the County CETA program and offered Respondent's Exhibit 1 which was received in evidence.

There is no transcript of hearing in this proceeding. The parties were given the opportunity to file proposed findings of fact and conclusions of law; however, they waived their right to do so.

As narrowed by the parties at the outset of the hearing, the issue is whether Respondent should repay Petitioner $1,850 in CETA funds allegedly expended in violation of applicable regulations.

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

1. Petitioner, Department of Labor and Employment Security, Division of Employment and Training (Division), entered into Contract No. 81ET-82-06-45-01- 027 with Respondent, Lake County Board of County Commissioners, authorizing the expenditure by Respondent of an undisclosed amount of grant funds between October 1, 1980 and September 30, 1981. The contract itself was not received in evidence. The funds were grant monies received by the State under the terms of the Comprehensive Employment and Training Act (CETA) and subsequently dispensed to Respondent for operating various employment programs.

   
   

2. An audit of expenditures under the contract was performed by an independent accounting firm. As is pertinent here, the results of that audit questioned $1,850 in expenditures made by Respondent under a Title IV program. Specifically, the firm's audit report recommended that $1,850 in wages and fringe benefits paid to a participant (Shelly L. Sunblade) between February 16, 1981 and July 2, 1981 be disallowed on the ground the participant's family income for the preceding twelve months exceeded eligibility guidelines. The recommendation was adopted by the Division in its Final Determination and Respondent was accordingly requested to refund that amount of money to the State. The Final Determination prompted the instant proceeding.

   
   

3. Shelly L. Sunblade was enrolled as a participant in a Title IV YETP program by Respondent between February 16, 1981 and July 22, 1981. During that period of time she received $1,850 in wages and fringe benefits. Her application for enrollment in the program reveals her family has four members, and received $9,679 in total income during the twelve months preceding the filing of the application.

   
   

4. Guidelines issued by Petitioner to all state operators, including Respondent, on June 25, 1980 provided that the income for a family of four could not exceed $10,170 in a metro area during the preceding twelve months and $9,500 in a non-metro area for the same period of time. Therefore, Sunblade's family income exceeded the limitations for a non-metro area.

   
   

5. The Division issued a "procedural instruction" at some undisclosed date prior to the execution of the contract in question which classified Lake County as a non-metro area. Prior to that, it had been classified as a metro area.

   The procedural instruction was not introduced into evidence, and it was not confirmed whether it was actually sent to Respondent. However, sometime between March and June, 1981 Respondent's intake officers met with Division personnel and were told that Lake County was no longer a metro area and had been reclassified to the non-metro category.

6. Sunblade was terminated from the program on July 22, 1981. It was not known whether the program had run its course or if she was terminated because her ineligibility had been discovered. However, because the contract ran until September 30, 1981, it is found that such termination was due to the County discovering her ineligibility. Sunblade was one of five hundred participants whose files had to be reopened and reviewed in order to determine their eligibility because of the reclassification as a non-metro area.

   
   

7. Respondent contended that it was unaware of the reclassification from metro to non-metro until it met with Division personnel in the spring of 1981. This was after Sunblade had already been enrolled in the program. It contended that because it had some five hundred participants to review, it corrected the mistake as soon as was practicable. The County also pointed out that it expended over one million dollars in 1981 under the CETA program, and the Sunblade error was inconsequential in relation to the total expenditures. Finally, it contended that because the erroneous expenditure was unintentional, some consideration should be given to forgiving the small error.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. Petitioner has challenged the propriety of $1,850 in expenditures on the ground such expenditures were in contravention of applicable federal and state regulations. Specifically, it relies upon HRS Reg. s. 675.5-8(a)(1)(iii),

   45 Fed. Reg. 33859 (1980) which prescribes the eligibility requirements for the youth employment and training program. Among other things, a youth must be "(a) member of a family with a total family income annualized on a six month basis, at or below 85 percent of the lower living standard income level." Under income tables developed by the Division, the participant's family income was limited to

   $9,500 in a non-metro area. The evidence discloses that the participant's family income exceeded this level and she was therefore ineligible to participate in the program. Accordingly, even though the error was unintentional, and is de minimis in relation to the total program, the Division should be repaid $1,850 which represents the costs associated with an ineligible participant in the program.

   
   

10. Respondent acknowledges the above facts but relies on 20 C.F.R. 676.88(1)(c) which basically provides a means for the federal Grant officer to allow the costs associated with ineligible participants when certain conditions have been met. However, this provision is applicable only after all state administrative remedies have been exhausted, and an appeal is taken to the U. S. Department of Labor.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent repay Petitioner in accordance with the Final

Determination issued on January 26, 1983.

DONE and ORDERED this 8th day of June, 1983 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 8th day of June, 1983.

COPIES FURNISHED:

Chad J. Motes, Esquire

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

Mary M. McDaniel, Esquire

101 East Maud Street Tavares, Florida 32778

Honorable Wallace E. Orr Secretary, Department of Labor

and Employment Security Suite 206 Berkley Building

2590 Executive Center Circle, East Tallahassee, Florida 32301

Docket for Case No: 83-000485

Orders for Case No: 83-000485