Findings Of Fact Tooze holds certificate number R-0434 as a Certified Public Accountant practicing in the State of Florida and held such certificate in good standing on January 1, 1974. At that time, Tooze was subject to professional certification requirements set forth in Chapter 473, Florida Statutes. The records of the Board reflect that Tooze provided no evidence of the completion of any courses or studies that would give him credits toward the reestablishment of his professional competency in the period between January 1, 1974, and April 2, 1977. On October 15, 1976, Tooze sat for an examination which was approved by the Board and given to practicing Certified Public Accountants pursuant to applicable law requiring re- establishment of professional competency. Tooze received a score of 64 out of a possible score of 100. The established passing grade for the examination is 75. Tooze received nine credit hours for the examination he took. On May 13, 1977, the Board suspended Tooze's certificate R-0434 as a Certified Public Accountant for failing to comply with requirements for the reestablishment of his professional knowledge and competency to practice public accounting. The questions to be answered in the uniform written professional examination administered to Tooze on October 15, 1976, were based upon "Current Authoritative Literature" which included Accounting Principles Board's Opinions, Accounting Research Bulletins, Statements and Interpretations of the Financial Accounting standards Board, Statements on Auditing standards, and the Laws and Rules of the Florida State Board of Accountancy. Tooze challenges sixteen of these one hundred questions on the grounds that the approved answers are incorrect and that the answer selected by Tooze is the proper choice. The questions attacked by Tooze are numbers 13, IS, 18, 51, 56, 61, 63, 67, 72, 74, 78, 80, 82, 95, 96 and 99. The title of the uniform written professional examination is "Examination of Current Authoritative Accounting and Auditing Literature and Rules of the Florida State Board of Accountancy. The approved answer to each of the questions on the examination is that which is mandated by the "Current Authoritative Literature." The examination does not purport to seek answers outside of the requirements of the Current Authoritative Literature. Each of the approved answers in the sixteen questions listed above are consistent with the demands of the Current Authoritative Literature. Each of Tooze's answers is contrary to the provisions of the Current Authoritative Literature. Accordingly, the answers selected by Tooze are not the best answers and were properly graded incorrect on his examination answer sheet.
The Issue The issue in these consolidated cases is whether disciplinary action should be taken against Respondent's license to practice as a certified public accountant in the state of Florida based upon the alleged violations of Chapter 473, Florida Statutes, set forth in the Amended Administrative Complaints filed by Petitioner.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: At all times pertinent to these proceedings, Respondent was licensed to practice as a certified public accountant ("CPA") in the state of Florida, having been issued license number AC0001638. Respondent's most recent business address was 224 North Federal Highway, Suite #4, Fort Lauderdale, Florida 33301. Petitioner has presented evidence of a number of Final Orders entered by the Florida Board of Accountancy (the "Board") against Respondent as a result of prior disciplinary action initiated by Petitioner. While the records presented are somewhat confusing and bear several different case numbers, it appears that, as a result of the various cases, Respondent has been on probation for approximately the last 12 years. According to the records presented, the first action taken against Respondent's license is reflected in a Final Order dated December 31, 1981 and filed on February 8, 1982 in DPR Case Number 0000499. That Final Order indicates that a stipulation executed by Respondent "as to facts, law and discipline" was accepted by the Board "with no changes." The stipulation referenced in that Final Order was not included with the exhibits entered into evidence in this proceeding. Thus, the "facts, law and discipline" are not of record in this case. Next, the Board entered a Final Order dated May 11, 1982 and filed on May 17, 1982 in DPR Case Numbers 16369, 16370 and 15399 imposing a $1,000 fine against Respondent and suspending his license for eighteen (18) months. An Amended Final Order dated September 3, 1982 was filed in DPR Case Numbers 16369, 16370 and 15399 on September 15, 1982. That Amended Final Order accepted a signed stipulation dated July 30, 1982 and modified the Final Order entered on May 11, 1982. In lieu of the fine and suspension imposed in the May 11 Final Order, the Amended Final Order placed Respondent on probation for five years with a requirement for a review of Respondent's practice at the end of each year by a CPA selected by the Department at Respondent's expense. The independent certified public accountant was supposed to submit written and oral reports to the Board and the Department regarding Respondent's compliance with the applicable statutes and rules governing the accounting profession. The Stipulation which was incorporated into the Amended Final Order specifically required Respondent to comply "with all provisions of Chapter 455 and 473, Florida Statutes, and the rules promulgated pursuant thereto." The Stipulation provided in part as follows: The Board shall determine at a public hearing whether [Respondent] has complied with Chapters 455 and 473, F.S. and the rules promulgated thereto. The Board may restrict or prohibit [Respondent's] practice of public accountancy during his period of probation as it deems necessary to protect the public safety and welfare. It is clearly understood and agreed that, in the event the DEPARTMENT, the BOARD or the BOARD'S Probable Cause Panel find sufficient evidence to believe reasonable cause exists that [Respondent] has violated any of the conditions of probation as outlined above, a notice of said violation shall be sent to [Respondent], by certified mail, setting forth the nature of the alleged violation and an emergency hearing will be held by the BOARD or the BOARD'S Probable Cause Panel, and upon a find [sic] of probable cause, [Respondent's] probation may be vacated and his license to practice accountancy in the State of Florida, subject to automatic suspension, with further disciplinary proceedings, pursuant to Chapters 455 and 473, F.S. If Respondent has not complied with all the terms and conditions of this joint stipulation and final order of the BOARD, the BOARD shall enter an Order imposing such further terms and conditions of probation pursuant to the statutory powers set forth in 473.323(1)(3), F.S., and shall further cause said matter to be referred to the BOARD'S Probable Cause Panel or such other jurisdictional authority as may be established for purposes of determining probable cause and initiating further administrative and/or judicial action against the Respondent. * * * [Respondent] expressly waives all further procedural steps and expressly waives all rights to seek judicial review of, or to otherwise challenge or contest the validity of a joint stipulation of facts, conclusions of law and imposition of discipline, and the final order of the BOARD incorporating said stipulation. At a meeting on January 21, 1985, the Florida Board of Accountancy reviewed a report from the consultant hired to conduct the inspection and review of Respondent's public accountancy practice in accordance with the terms of the Amended Final Order entered on September 15, 1982. Based upon its review of the consultant's report, the Board imposed an additional condition of probation that all audits, reviews and compilations prepared by Respondent were to be reviewed prior to their issuance by a CPA selected by Respondent at Respondent's expense. This additional aspect of Respondent's probation was incorporated in a Final Order dated February 15, 1985 and entered on February 28, 1985 in DPR Case Number 0016369. In an Administrative Complaint dated December 4, 1985, Petitioner charged Respondent with violating the terms of his probation by issuing compilations without prior review by another CPA. This Administrative Complaint was assigned DPR Case Number 0063064. As reflected in a Final Order dated February 23, 1987 and filed on March 10, 1987 in DPR Case Number 0063064, Respondent's probation was extended until September 1988 based upon a signed Stipulation dated November 16, 1986 which was accepted by the Board during its meeting on January 30, 1987. As a result of the March 10, 1987 Final Order extending Respondent's probation, Respondent was required to continue to obtain review and approval by an independent CPA prior to issuance of any audited financial statements, reviewed financial statements and compiled financial statements and related accountant's reports. In an Administrative Complaint dated December 7, 1989 in DPR Case Number 0063064, Petitioner charged Respondent with violating Section 473.323(1)(g), Florida Statutes, as a result of his issuance of financial statements without prior review by a CPA as required by the previous Final Orders entered against Respondent. The Complaint did not specify any date(s) or specific financial statements involved. At a meeting on February 22, 1990, the Board accepted a Counter- Settlement Stipulation signed by Respondent on March 26, 1990 in Case Number 0063064. The Board entered a Final Order dated April 4, 1990 and filed on April 10, 1990 confirming its acceptance of the Counter-Stipulation. 2/ The Counter- Settlement Stipulation incorporated in the April 1990 Final Order extended Respondent's probation "until the terms of probation have been met." The terms of probation were stated to be: That the Respondent shall not violate the provisions of Chapters 455 or 473, Florida Statutes or the rules promulgated pursuant thereto or the terms and conditions of this joint stipulation. A Department of Professional Regulation Certified Public Accountant consultant shall interview the Respondent's clients to determine the type of work product they are receiving from the Respondent. A Department of Professional Regulation Certified Public Accountant Consultant shall conduct a review of the Respondent's tax practice along with work papers at the Respondent's expense. The Counter-Stipulation further provided that: Respondent and the Department fully understand that this Stipulation, and the subsequent Final Order incorporating same, will not in any way preclude additional proceedings by the Board and/or Department against the Respondent for acts or omissions not specifically detailed in the investigative findings of the Department upon which a finding of probable cause was made. Respondent and the Department expressly waive all further procedural steps, and expressively waives [sic] all rights to seek judicial review of or to otherwise challenge or contest the validity of the joint stipulation and the Final Order of the Board, if said stipulation is accepted by the Board and incorporated in the Final Order.... In early 1991, Marlyn Felsing, a CPA retained as a consultant to conduct a review of Respondent's work pursuant to the terms of his probation, met with Respondent and reviewed financial statements, work papers and various tax returns prepared by Respondent for his clients. Felsing reviewed the financial statements and/or business tax returns for approximately four of Respondent's business clients and reviewed the personal income tax returns for approximately three of Respondent's clients who were business owners. He also reviewed all of the related work papers and discussed his review with Respondent. Felsing prepared a report dated April 23, 1991 detailing several problems and deficiencies he found during his review. A copy of Felsing's report was offered into evidence in this case and he testified at the hearing regarding many of those findings. This evidence was offered in support of the charges in the First DOAH Complaint (DOAH Case Number 92-3421) as amended. Neither Felsing's report nor any of his findings are specifically alleged in the First DOAH Complaint. That Complaint referenced a probation report which "revealed deficiencies which were brought before the Probable Cause Panel, and it was determined that Respondent had violated the terms of the Final Order." As noted in the Preliminary Statement above, the First DOAH Complaint was filed on January 23, 1992. As reflected in a Final Order dated June 19, 1991, and filed on July 1, 1991 in DPR Case Number 0063064, the Board reviewed a probation report during its meeting on May 21, 1991 and approved a settlement stipulation extending the probation imposed by the April 4, 1990 Final Order for a period of one (1) year. The settlement stipulation referenced in this July 1, 1991 Order has not been offered into evidence in this proceeding. As best can be determined from the evidence presented in this case, the Final Order entered in DPR Case Number 0063064 on July 1, 1991, was entered after review of the probation report prepared by Marlyn Felsing on April 23, 1991. Thus, it appears that the Board has already taken final action with respect to the deficiencies found in Felsing's report. During the Board Meeting on May 21, 1991, the Board also considered whether disciplinary action should be taken against Respondent with respect to another Administrative Complaint filed against Respondent on January 7, 1991. That new Administrative Complaint was assigned DPR Case Number 95979 and contained allegations that Respondent "was associated with personal financial statements for Michael Raybeck which did not meet the appropriate standards." As reflected in a Final Order dated June 19, 1991 and filed on July 1, 1991 in DPR Case Number 95979, the Board during its May 21, 1991 meeting accepted a settlement stipulation signed by Respondent on April 15, 1991. In that settlement stipulation, Respondent admitted the allegations in the Administrative Complaint in DPR Case Number 95979. The Settlement Stipulation provided as follows: * * * Stipulated Disposition 2. Respondent's license to practice public accounting is currently on probation in case number 63064. Probation in this case shall run concurrently with the probation in case number 63064. The same CPA consultant who is assigned to review the Respondent's practice in Case Number 63064 shall also review the personal financial statements the Respondent's office prepares. The consultant shall also review the Respondent's records to determine whether he is accepting commissions. These additional terms shall also be paid for by the Respondent. * * * 5. Respondent and the Department fully under- stand that this Stipulation, and the subsequent Final Order incorporating same, will not in any way preclude additional proceedings by the Board and/or Department against the Respondent for acts or omissions not specifically detained [sic] in the investigative findings of the Department upon which a finding of probable cause was made. * * * 8. This Settlement Stipulation is [sic] an admission of any liability on behalf of the Respondent and is being entered into merely to resolve a dispute. It shall not be admissible in any court of law or any subsequent adminis- trative proceeding for any purpose. As reflected in an Order dated September 29, 1992 and filed on September 30, 1992 in DPR Case Number 90-95979, the Board reviewed a probation report during its September 24, 1992 meeting and determined "that the probation imposed upon Respondent by the Final Order dated July 1, 1991, shall be extended and/or modified as follows: extend probation and defer action until Case Number 90-13254 is resolved." Case Number 90-13254 is the Second DOAH Complaint, which was filed on July 6, 1992 (DOAH Case Number 92-5696). The Second DOAH Complaint includes specific allegations against Respondent based upon his purported preparation of misleading financial statements for American British Enterprises, Inc. and Federal Restaurants, Inc. The Second DOAH Complaint The evidence presented in this case established that Respondent provided a number of accounting services to American British Enterprises, Inc. and Federal Restaurants, Inc. The exact nature and scope of the services provided by Respondent are not entirely clear. Respondent's records of his engagement include a balance sheet of Federal Restaurants as of August 17, 1987; Consolidated Financial Statements of American British Enterprises, Inc. as of August 25, 1987; Interim Compiled Financial Statements, American British Enterprises, March 31, 1988; Financial Statements of American British Enterprises, Inc. November 30, 1988; and Financial Statements of American British Enterprises, Inc., December 31, 1988. The Second DOAH Complaint, as amended, alleges that the financial statements referenced in paragraph 19 above were included in due diligence packages for American British Enterprises and were distributed to broker- dealers. No persuasive evidence was presented regarding any such distribution. The Second DOAH Complaint also alleges that "Respondent distributed misleading financial statements to brokers with the purpose of driving up the price of the stock so they could sell shares they controlled at a profit." No evidence was presented to support this allegation. Respondent's counsel suggested that all of the financial statements in question were simply drafts and were not intended to be issued. The evidence established that Respondent executed a letter in connection with the August 17, 1987 Balance Sheet of Federal Restaurants which provided as follows: I have examined the accompanying Balance Sheet of Federal Restaurants, Inc., as of August 17, 1987 whose sole Assets are Cash and [sic] Purchase Deposit. My examination was made in accordance with standards established by the American Institute of Certified Public Accountants and accordingly, included such procedures as I considered necessary in the circumstances. In my opinion the enclosed Balance Sheet represents the financial position of Federal Restaurants, Inc., as of August 17, 1987 in accordance with generally accepted accounting principals. Similarly, Respondent's records include a signed letter to the Board of Directors of American British Enterprises in connection with the August 28, 1987 Consolidated Balance Sheet. That letter provides that Respondent conducted an examination "in accordance with generally accepted auditing standards and accordingly, included such tests of the accounting records and such other auditing procedures as I considered necessary in the circumstances." The letter further opines that the financial statements "present fairly the Consolidated Financial Position...[of the companies] in conformity with generally accepted accounting principals." Respondent's records also include a signed letter regarding both the November, 1988 and December, 1988 Financial Statements for American British Enterprises indicating that Respondent had conducted an audit in accordance with generally accepted auditing standards and that, in his opinion, the financial statements "present fairly, in all material respects, the financial position" of the company as of the stated date. There is no indication on any of these financial statements that they were drafts that were not to be issued. Aside from the letters noted in paragraph 22, the only evidence presented that any of the financial statements listed in paragraph 19 above were issued was the testimony of one of Petitioner's experts who suggested that the statements had to have been issued since they were found in the SEC's files. However, no direct evidence was presented to establish that any investors or potential investors received the financial statements. Moreover, no evidence was presented that any such investors suffered a loss as a result of their reliance upon the financial statements. Certified public accountants are required to utilize specific guidelines in the performance of accounting services. Those guidelines are codified in the Statements on Standards for Accounting and Review Services ("SSARS"). The failure to abide by the SSARS guidelines constitutes performance below acceptable accounting standards. Petitioner has presented testimony from two experts regarding the deficiencies in the various financial statements referenced in paragraph 19 above. Many of the problems cited by Petitioner's experts relate to alleged deficiencies in Respondent's work papers. Respondent's expert has challenged some of those alleged deficiencies. Because the work papers have not been offered into evidence, it is impossible to resolve some of the conflicts in the experts' opinions. Nonetheless, the evidence was sufficient to clearly and convincingly demonstrate that Respondent's work was not in accordance with generally accepted accounting principals in several respects and the financial reports identified in paragraph 19 failed to comply with the SSARS in several ways. The August 17, 1987 balance sheet of Federal Restaurants indicates that the only assets of the company were cash and a purchase deposit on a contract to acquire a restaurant. The balance sheet of Federal Restaurants as of August 17, 1987 has no notes to it. Accounting Principals Board ("APB") Opinion 22 provides that a description of all significant accounting policies of the reporting entities should be included as an integral part of the financial statements. In this particular instance, the omission of accounting policies is of minor importance since the balance sheet only reflects two assets: cash being held in escrow and a deposit on a contract to purchase a restaurant (the "Purchase Contract"). As discussed below, none of the financial statements prepared by Respondent disclosed the terms of the Purchase Contract. Furthermore, it appears from other documents in Respondent's records that the corporation is wholly owned by American British Enterprises and/or is jointly controlled, but there is no disclosure of that relationship in the financial statements. These omissions are significant deficiencies which have not been explained. Statement of Auditing Standards ("SAS") 41 requires work papers to support the conclusions of an audit. According to SAS 41, the work papers constitute the principal record of the work that the auditor has done and the conclusions that he has reached concerning significant matters. Respondent's records do not include work papers for the August 17, 1987 audit. SAS 22 provides guidance to an independent auditor making an examination in accordance with generally accepted auditing standards on the considerations and procedures applicable to planning and supervision, including preparing an audit program, obtaining knowledge of the entity's business, and dealing with differences of opinion among firm personnel. While there is conflicting evidence as to what was included in Respondent's work papers, the evidence was clear that Respondent's records for the August 17, 1987 audit do not comply with the requirements of SAS 22, because there was no clearly identified planning memos or audit programs. In fact, there is not even an engagement letter. SAS 19 requires an independent auditor to obtain certain written representations from management as part of an examination made in accordance with generally accepted auditing standards and provides guidance concerning the representations to be obtained. Petitioner's experts contend that Respondent's work papers do not include an appropriate representation letter from management for any of the Financial Statements. Respondent's expert contends there was such a letter with respect to the August 27, 1987 Consolidated Financial Statements. While it is not clear what is contained in the records, it is clear that the records do not clarify conflicting documentation in Respondent's work papers regarding the relationship between Federal Restaurants and American British Enterprises. Furthermore, Respondent's records do not include a clear statement from management regarding the terms of the Purchase Contract and the apparent contingencies involved with that Contract. Consequently, Respondent has failed to comply with SAS 19 and SAS 45 (which addresses related-party disclosures). The August 27, 1987 Consolidated Financial Statements are not properly consolidated in accordance with Accounting Research Bulletin ("ARB") 51. In addition, the consolidated Financial Statements do not include the disclosures required by Accounting Principals Board Opinion 22. Respondent's expert contends that the statements were mistakenly entitled and they should have been captioned as "combined" rather than consolidated financial statements. Even if this after the fact justification is accepted, the statements do not adequately disclose the relationship between the companies. Respondent's expert suggests that the August 25 Consolidated Financial Statement for American British Enterprises and Federal Restaurants reflects a voidable acquisition of Federal Restaurants by American British Enterprises. If this interpretation is accepted, the August 17, 1987 Balance Sheet for Federal Restaurants was not necessarily misleading for failure to disclose its relationship with American British Enterprises. However, the August 25, 1987 Consolidated Financial Statements are incomplete since the transaction is not fully explained. Moreover, there is no disclosure that the companies were apparently under common control or ownership. With respect to the November, 1988 balance sheet of American British Enterprises, the evidence established that there was a discrepancy between the amount reflected in the financial statement for a note receivable which was the major asset of the corporation and the confirmation in the work papers regarding that asset. While this discrepancy may have been due to a discount and/or accrued interest, no explanation is provided. The discrepancy constitutes a violation of SAS 1, Section 331, which addresses the appropriate background information for receivables, and SAS 1, Section 530 which addresses the dating of the auditor's report. If the discrepancy is due to a discount, Respondent failed to comply with APB Opinion 6, paragraph 14 which requires unearned discounts to be shown as a deduction from the related receivable and/or APB Opinion 21, paragraph 16 which provides for the discount or premium to be reported on the balance sheet as a direct deduction from or addition to the face amount of the note. The work papers for the November audit do not include a reconciliation between the 1982 financial statements of the predecessor corporation and the 1987 statements. There is no documentation of efforts to communicate with the prior auditor nor is there any discussion of the consistency of application of accounting principals between the two statements. As a consequence, the statements do not conform with SAS 7 which addresses communications with a prior auditor. The work papers fail to reflect any audit work being performed on the appraisal for the equipment collateralizing the note. In addition, the work papers include a confirmation from the stock transfer agent that doesn't agree with the number of shares reflected on the financial statement. There is no explanation for this discrepancy nor is there any clear indication of the audit work performed. The financial statements also include a footnote referencing a joint venture agreement. Respondent's records do not include any evidence of audit work performed with respect to this venture agreement. The deficiencies noted in paragraph 33 also appear in the December 31, 1988 financial statements for American British Enterprises. Furthermore, Respondent's records do not contain an audit file for this December statement. The November 30, 1988 and the December 31, 1988 audits of American British Enterprises do not contain a segregation between current and noncurrent assets. This deficiency is relatively insignificant since the company was essentially just a holding company. However, it does constitute a violation of ARB 43. Similarly, the cash flows in the financial statements were not presented in the appropriate format or style required by Statement of Financial Accounting Standards 95. However, it appears that all of the necessary information was present. The deficiencies found in the financial statements prepared for Federal Restaurants and American British Enterprises constitute negligence on the Respondent's part and establish a failure to exercise professional competence and due professional care in the performance of accounting services. On or about June 14, 1990, the Securities and Exchange Commission ("SEC") filed a civil lawsuit against Respondent and three other defendants alleging the preparation of false and misleading financial statements for American British Enterprises, Inc. On August 5, 1991, Respondent executed a Consent of Edwin Tunick to the Entry of a Final Judgement of Permanent Injunction in the civil action initiated by the SEC. On September 2, 1991, a Final Judgement of Permanent Injunction as to Edwin Tunick was entered by the United States District Court for the Southern District of Florida (Fort Lauderdale Division) in Case Number 90-6483CIV-ZLOCH. That Final Judgment "permanently restrained and enjoined" Respondent from violating Section 17(a) of the Securities Act, 15 U.S.C. 77q(a) and Section 10(b) of the Exchange Act, 15 U.S.C 78 (j)b and Rule 10b-5 promulgated thereunder. The Final Judgment did not include any specific findings of any violations of the federal securities laws.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Accountancy enter a Final Order dismissing the Administrative Complaint filed in DOAH Case Number 92-3421 (DPR Case Number 91-09729); finding Respondent guilty of violating Sections 473.323(1)(a), (g) and (h), Florida Statutes, and Rules 21A-22.0001, 21A-22.0002, and 21A-22.003, Florida Administrative Code, as alleged in the Administrative Complaint filed in DOAH Case Number 92-5696 (DPR Case Number 90-13254) and dismissing the other charges in that Complaint. As penalty for the violations, Respondent should be fined $1,000, and his license should be suspended for three years. Before resuming practice, Respondent should be required to complete such mandatory continuing education courses as may be mandated by the Board and he should be placed on probation for three (3) years. DONE and ENTERED this 14th day of November, 1994, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 1994.
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint dated February 5, 1999, and, if so, what penalty should be imposed. The Respondent maintains that the instant action is barred by laches and violates Section 455.225, Florida Statutes.
Findings Of Fact Petitioner is the state agency charged with the responsibility of regulating the practice of certified public accountants licensed within the state. At all times material to the allegations of this case, the Respondent, Robert Jarkow, has been licensed in Florida as a certified public accountant, license number AC0010963. On or about December 1996, the Respondent orally agreed to provide accounting services for an individual named Kasman who was doing business as Traditions Workshop, Inc. (Traditions). Traditions manufactured uniforms and listed the federal government among its clients. Revenues to the company from the sale of uniforms were presumably posted in accordance with written contracts. Although the Respondent participated in the monthly completion of financial records for the company, the exact description of his responsibilities for the company and the individual are not known. It is undisputed that Ms. Kasman asked the Respondent to provide a financial statement for the company as part of an effort to secure a line of credit from a bank in New York. It is also undisputed that Ms. Kasman refused to pay for the statement. According to the Respondent, based upon that refusal, he declined to prepare the instrument. Nevertheless, a document entitled "Financial Statements" was generated with a notation "MANAGEMENT USE ONLY-NOT FOR DISTRIBUTION." The Respondent maintains that the document was not prepared as a financial report and that if generated using his data disk it was done without any intention on his part for the product being used to secure a line of credit. The document did not comply with provisions of accounting practice. The Respondent admitted that when his relationship with the party deteriorated, and payment for services was not rendered, he did not release information to a succeeding accountant. Ms. Kasman needed the information, depreciation schedules, in order to accurately complete tax records for Traditions. The Respondent attempted to locate Ms. Kasman and her bookkeeper for hearing but was unable to do so. Ms. Kasman filed a complaint with the Petitioner against the Respondent that was not investigated until several months after it was filed. The Respondent obtained a civil judgment against Traditions for unpaid accounting fees. The Administrative Complaint filed in this case was submitted over a year after the consumer complaint. Neither party presented testimony from the complainant, her bookkeeper, or her succeeding accountant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a final order finding the Respondent violated Rule 61H1-23.002, Florida Administrative Code, as set forth in Count II of the Administrative Code; imposing an administrative fine in the amount of $1000; and placing the Respondent on probation for one year subject to terms as may be specified by the Board of Accountancy. DONE AND ENTERED this 4th day of December, 2001, in Tallahassee, Leon County, Florida. ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative this 4th day of December, 2001. COPIES FURNISHED: Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Victor K. Rones, Esquire Law Offices of Rones & Navarro 16105 Northeast 18th Avenue North Miami Beach, Florida 33162 Martha Willis, Division Director Division of Certified Public Accounting Department of Business and Professional Regulation 240 Northwest 76 Drive, Suite A Gainesville, Florida 32607 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact Pursuant to a stipulation, the following facts are found. Petitioner is a West Virginia corporation, organized under the laws of that state on January 4, 1958. Prior to June 1, 1962, it operated an automobile dealership in Huntington, West Virginia. On June 1, 9162, Petitioner exchanged assets of its automobile dealership for fifty (50 percent) percent of the capital stock of Dutch Miller Chevrolet, Inc., a West Virginia corporation organized to succeed the automobile dealership formerly operated by the Petitioner. Prior thereto, in 1961, the Petitioner had acquired one hundred percent (100 percent) of the capital stock in Palm Beach Motors (the name of which was changed on August 10, 1961 to Roger Dean Chevrolet, Inc.). Roger Dean Chevrolet, Inc. is a wholly owned subsidiary of the Petitioner which operated on property owned by the Petitioner. The years involved herein are the fiscal years ending December 31, 1972 and 1973, during which years the Petitioner's principal income (except for the gain involved herein) consisted of rents received from Roger Dean Chevrolet, Inc. Petitioner and its subsidiary filed consolidated returns for the years involved. During the fiscal year ending December 31, 1972, Petitioner sold its stock in Dutch Miller Chevrolet, Inc. to an unrelated third party for a gain determined by the Respondent to be in the amount of $349,217.00, which, although the sale took place out of the State of Florida, the Respondent has determined to be taxable under the Florida Income Tax Code* (Chapter 220, Florida Statutes). In the fiscal years ending December 31, 1972 and 1973, Petitioner included in Florida taxable income, the amounts of $76.00 and $6,245.00, respectively, from the sale of property on April 23, 1971, such gain being reported for federal income tax purposes on the installment method under Section 453 of the Internal Revenue Code of 1954. Roger H. Dean, individually or by attribution during the years involved herein, was the owner of one hundred (100 percent) percent of the stock of Roger Dean Enterprises, Inc. and seventy-five (75 percent) percent of the stock of Florida Chrysler-Plymouth, Inc. The remaining twenty-five (25 percent) percent of Florida Chrysler-Plymouth, Inc. was owned by Robert S. Cuillo, an unrelated person. The Respondent disallowed the $5,000.00 exemption to the Petitioner in computing its Florida corporate income tax for each of the years in question on the theory that the two corporations were members of a controlled group of corporations, as defined in Section 1563 of the Internal Revenue Code of 1954. By letter dated April 13, 1976, the Respondent advised Petitioner of its proposed deficiencies for the fiscal years ending December 31, 1972 and 1973, in the respective amounts of $19,086.25 and $1,086.79. Within sixty (60) days thereafter (on or about May 10, 1976), Petitioner filed its written protest in response thereto. By letter dated May 27, 1976, the Respondent rejected the Petitioner's position as to the stock sale gain and exemption issues. Thereafter on September 17, 1976, a subsequent oral argument was presented at a conference held between the parties' representatives in Tallahassee, and by letter dated September 23, 1976, Respondent again rejected Petitioner's position on all pending issues raised herein. The issues posed herein are as follows: Whether under the Florida Corporate income tax code, amounts derived as gain from a sale of intangible personal property situated out of the State of *Herein sometimes referred to as the Code. Florida are properly included in the tax base of a corporation subject to the Florida code. Whether amounts derived as installments during tax years ending after January 1, 1972, from a sale made prior to that date are properly included in the tax base for Florida corporate income tax purposes. Whether two corporations one of whose stock is owned 100 percent by the same person who owns 75 percent of the stock in the other, with the remaining 25 percent of the stock in the second corporation being owned by an unrelated person, constitute members of a control group of corporations as defined by Section 1563 of the Internal Revenue Code of 1954. Many states, in determining corporate income tax liability, utilize a procedure generally referred to a "allocation" to determine which elements of income may be assigned and held to a particular jurisdiction, where a corporation does business in several jurisdictions. By this procedure, non- business income such as dividends, investment income, or capital gains from the sale of intangibles are assigned to the state of commercial domicile. This approach was specifically considered and rejected when Florida adopted its corporate income tax code. Thus, in its report of transmittal of the corporate income tax code to the legislature, at page 215, it was noted: "The staff draft does not attempt to allocate any items of income to the commercial domicile of a corporate taxpayer. It endeavors to apportion 100 percent of corporate net income, from whatever source derived, and to attribute to Florida its apportionable share of all the net income." Additional evidence of the legislature's intent in this area can be seen by noting that when the corporate income tax code was adopted, Florida repealed certain provisions of the Multi-state Tax Compact (an agreement for uniformity entered into among some twenty-five states). Thus, Article IV, Section (6)(c), a contained in Section 213.15, Florida Statutes, 1969, which previously read: "Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer's commercial domicile is in this state", was repealed by Chapter 71-980, Laws of Florida, concurrently with the adoption of the Corporate Income Tax Code. This approach has survived judicial scrutiny by several courts. See for example, Johns-Mansville Products Corp. v. Commissioner of Revenue Administration, 343 A.2d 221 (N.H. 1975) and Butler v. McColgan, 315 U.S. 501 (1942). Respecting its constitutional argument that amounts derived as installments during tax years subsequent to January 1, 1972, from a sale made prior to the enactment of the Florida Corporate Income Tax Code, the Petitioner concedes that the Code contemplates the result reached by the proposed assessment. However, it argues that in view of the constitutional prohibition which existed prior to enactment of the Code, no tax should now be levied based on pre-Code transactions. The Florida Supreme Court in the recent case of the Department of Revenue v. Leadership Housing, So.2d (Fla. 1977), Case No. 47,440 slip opinion p. 7 n. 4, cited with apparent approval the decision in Tiedmann v. Johnson, 316 A.2d 359 (Me. 1974). The court in Tiedmann, reasoned that the legislature adopted a "yard-stick" or measuring device approach by utilizing federal taxable income as a base, and reasoned that there was no retroactivity in taxing installments which were included currently in the federal tax base for the corresponding state year even though the sale may have been made in a prior year. The Respondent denied the Petitioner a $5,000.00 exemption based on its determination that the two corporations herein involved were members of a controlled group of corporations as defined in Section 1563 of the Internal Revenue Code. Chapter 220.14(4), Florida Statutes, reads in pertinent part that: "notwithstanding any other provisions of this code, not more than one exemption under this section shall be allowed to the Florida members of a controlled group of corporations, as defined in Section 1563 of the Internal Revenue Code with respect to taxable years ending on or after December 31, 1972, filing separate returns under this code." Petitioner's reliance on the case of Fairfax Auto Parts of Northern Virginia, 65 T.C. 798 (1976), for the proposition that the 25 percent ownership of an unrelated third party in one of the corporations precluded that corporation and the Petitioner from being considered a "controlled group of corporations" within the meaning of Section 1563 of the Internal Revenue Code, is misplaced in view of the recent reversal on appeal by the Fourth Circuit. Fairfax Auto Parts of Northern Virginia v. C.I.R., 548 F.2d 501 (4th C.A. 1977). Based thereon, it appears that the Respondent correctly determined that the Petitioner and Florida Chrysler-Plymouth, Inc., were members of the same controlled group of corporations as provided in Section 1563 of the Internal Revenue Code and therefore properly determined that Petitioner was not entitled to a separate exemption. Based on the legislature's specific rejection of the allocation concept and assuming arguendo, that Florida recognized allocation income for the sales of intangibles, it appears that based on the facts herein, Petitioner is commercially domiciled in Florida. Examination of the tax return submitted to the undersigned revealed that the Petitioner has no property or payroll outside the state of Florida. Accordingly, it is hereby recommended that the proposed deficiencies as established by the Respondent, Department of Revenue, be upheld in its entirety. RECOMMENDED this 7th day of July, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 David S. Meisel, Esquire 400 Royal Palm Way Palm Beach, Florida 33480 Thomas M. Mettler, Esquire 340 Royal Poinciana Plaza Palm Beach, Florida 33480
The Issue The issues are whether Respondent committed an unlawful employment practice against Petitioner, and if so, what corrective action should be taken.
Findings Of Fact Petitioner is a forty-one-year-old black male. He is a 1977 graduate of the University of Florida with a bachelor's degree in Business Administration. His undergraduate major was Finance. Petitioner has approximately 30 credit hours in Accounting from the University of North Florida, which he earned between 1983 and 1988. Petitioner is currently enrolled in the University of North Florida's Masters of Public Administration program. He has completed 30 of the 39 required credit hours in that program. From November of 1979 to March of 1991, Petitioner worked for Occidental Chemical Company as an accountant. After leaving this job, Petitioner was self-employed from April of 1991 to December of 1991. Respondent's District Two office in Lake City, Florida, hired Petitioner on March 6, 1992, as a Purchasing Agent I. Respondent hired Petitioner under administrative rules pertaining to career service employees as promulgated by the Department of Management Services. Petitioner received a copy of Respondent's disciplinary and conduct standards when he was hired. Petitioner worked as a Purchasing Agent I until September of 1992. His salary during that time was $609.00 bi-weekly. In September of 1992, Respondent promoted Petitioner to the position of Accountant II in Respondent's Office of Financial Services. His bi-weekly salary was $752.91, a 23.5 percent increase. As soon as Petitioner became a member of the fiscal section, he received five weeks of intensive training relative to vouchers. This training was necessary because Respondent's central office was beginning to relinquish many functions to its district financial offices, including the vouchering process. Petitioner's direct supervisor in the fiscal section was Faye McClellan. She occupied the position of Accounting Services Supervisor I. Petitioner was indirectly supervised by David Sheffield, District Financial Administrator. On March 1, 1993, David Sheffield hired Karin Davis Charron, a white female, as an Accountant I in Respondent's Office of Financial Services. Her salary was $674.14 bi-weekly, or ten percent above the minimum for an Accountant I. Prior to her employment with Respondent, Ms. Charron had 15 credit hours in Business Administration and Accounting, which she earned at Lake City Community College. Her prior work experience included the following: (a) head cashier at a food store, October of 1983 to June of 1984; (b) accountant/bookkeeper in private business, July of 1984 to September of 1985; (c) Fiscal Assistant I, Department of Corrections, November of 1985 to April of 1987; (d) Secretary Specialist/Cashier, Department of Corrections, April of 1987 to May of 1988; and (e) Fiscal Assistant II, Department of Corrections, May of 1988 to March of 1993. In March of 1993, Petitioner completed his probationary period as an Accountant II. On March 27, 1993, Faye McClellan and David Sheffield gave Petitioner an overall performance rating of "exceeds." On June 1, 1993, Petitioner was promoted to the position of Accountant III. At this time, Petitioner's salary was increased by 10 percent to $828.20 bi-weekly. On August 20, 1993, Respondent hired Ricky Haddock, a black male, as a Fiscal Assistant II at a bi-weekly salary of $549.90. Ricky Haddock testified that soon after he was employed, Ms. Charron told him that "we can make your life a living hell." This statement is not credible due to Mr. Haddock's poor memory concerning the circumstances under which Ms. Charron allegedly made this statement. On or about March 11, 1994, Respondent promoted Ms. Charron to Accountant II with a bi-weekly salary of $766.94, a ten percent increase. Subsequently, Dave Sheffield received a promotion and vacated his position as District Financial Administrator. Linda Green, a white female, took his place. Ms. Green had over ten years of managerial experience when she accepted this position. As manager of the fiscal section, Linda Green became responsible for the direct supervision of Faye McClellan. She was Petitioner's and Ms. Charron's indirect supervisor. On or about March 17, 1994, Faye McClellan gave Petitioner a special performance appraisal. The appraisal form indicates that Petitioner, as an Accountant III, had attended voucher quarterly meetings, SAMAS contract training, payroll training, ADA training, and conduct standards training. The appraisal form described Petitioner as a team player. Of special note was his participation in the Youth Motivator Program in the Columbia County School System. Petitioner received a overall performance rating of "exceeds." Linda Green concurred in Ms. McClellan's assessment of Petitioner's job performance. On September 9, 1994, Respondent promoted Petitioner to the position of Accountant IV. The promotion increased Petitioner's salary by ten percent to $938.36 bi-weekly. Linda Green, as manager of the financial office, recommended Petitioner for this promotion. As an Accountant IV, Petitioner's duties primarily consisted of auditing consultant contracts. These contracts are the most complicated contracts that the financial office processes. Petitioner was also responsible for the payroll and for the supervision of other contract auditors. About two months after Petitioner became an Accountant IV, his immediate supervisor, Faye McClellan, requested and received a position reassignment in Respondent's purchasing office. Petitioner filed an employment application to fill the vacancy created by Ms. McClellan's reassignment. On November 21, 1994, Respondent promoted Petitioner to the position of Accounting Services Supervisor I. The promotion increased Petitioner's salary by 19 percent to $1,161.31 bi- weekly. Linda Green recommended Petitioner for the Accounting Services Supervisor I promotion. She became his direct supervisor. As Accounting Services Supervisor I, Petitioner was responsible for the direct supervision of several subordinate Fiscal Assistants and Accountants, including Ms. Charron. Petitioner was the only black supervisor in Respondent's second district. Historically, the financial section is one of the more racially diverse offices in District Two. From November of 1994 through June of 1995, there were approximately ten people working in the fiscal section. Three of these employees were black. At least two employees were members of other minorities. Petitioner, Ricky Haddock, and two other minority employees were the only employees in the financial office with a college education. On December 23, 1994, Respondent promoted Ms. Charron to Accountant IV. Her bi-weekly salary became $928.50 which was equivalent to the minimum of the pay grade for that position. Linda Green recommended Ms. Charron for the promotion to Accountant IV. Petitioner participated on the panel that selected Ms. Charron as the most qualified candidate to fill Petitioner's former position. In so doing, he reviewed her application and interviewed her for the job. There is no credible evidence to support Petitioner's current allegation that Linda Green allowed Ms. Charron to misrepresent her qualifications for the position of Accountant IV. Ms. Charron's application in February of 1994 for the position of Accountant II, and her application in November of 1994 for the position of Accountant IV, accurately describe all duties and responsibilities that she performed at Stafford's Fire Extinguisher Service in 1984-1985. In 1994, an applicant for the position of Accountant IV was required to have a bachelor's degree in accounting, or a certificate as a Certified Public Accountant, or equivalent work experience in accounting. Neither the Petitioner nor Ms. Charron possessed a bachelor's degree in accounting or a certificate as a Certified Public Accountant when Respondent promoted them to their respective Accountant IV positions. Nevertheless, the evidence indicates that they were well qualified for the position of Accountant IV, at the time of their respective appointments, based on a combination of their education and work experience. Petitioner had a bachelor's degree in Finance, over eleven years of accounting experience in private industry, and more than four years of experience in state governmental accounting. Ms. Charron, on the other hand, had less then one year of formal education in business administration/accounting, over one year of accounting experience in private industry, and more than eleven years of experience in state governmental accounting. State employees have to comply with numerous statutes and rules which do not apply to private enterprise. In this case, Ms. Charron's experience in working for the state more than compensated for her lack of formal education. As Accounting Services Supervisor I, Petitioner's supervisory responsibilities increased. In February of 1995, he directly supervised Rick Haddock and three other Fiscal Assistant II positions, two of which were vacant. He also had direct supervision over Ms. Charron. Ms. Charron, in turn, was responsible for the direct supervision of four other Accountant positions. On February 13, 1995, Petitioner signed a Review and Performance Planning (RAPP) form. This was a new form which Respondent began using just prior to implementing a major career service reform within the agency. The form states that from February 1, 1995, through January 31, 1996, Petitioner would be evaluated based on his performance of the following duties: Supervise district vouchering section. Active participation/supervision vouchering section. Coordinate workloads. Provide liaison with personnel, DOT and State Comptroller. Assist in Legislative budget request. Assist with budget preparation for various programs. Assist in formulating budget information into the different entities LBR's. Manage contract section. Manages all contracts. Verifying information and all supporting documentation for payments to vendors. Audit district disbursements. Audit disbursement for accuracy in accordance with GAP and pertinent federal/state/department rules/ regulations/statutes. The RAPP form lists the following as Petitioner's departmental responsibilities: 1. Coaching; 2. Delegation; 3. Management control; 4. Leadership/Influence; 5. EEO/Affirmative Action; 6. Performance goals; 7. Planning and organization; 8. Judgment; Resources; and 10. Safety practices. Linda Green wanted to increase the cross-training of all employees so that work would not become back-logged when one of them took leave. She also wanted to give Petitioner an opportunity to broaden his experience in other functions of the financial office. In order to accomplish her goals, Ms. Green gave Petitioner additional budget responsibility and deleted his property administration duties in February of 1995. Linda Green gave Petitioner's property administration duties to Ms. Charron. From February 1995, through May 1995, Ms. Charron spent a portion of her time working on the inventory. Ms. Charron continued to work on several special projects to supervise other accountants. As Accounting Services Supervisor I, Petitioner's desk was located in a glass enclosed area within a larger office. Petitioner was supposed to be a "working" supervisor. However, Petitioner spent an inordinate amount of time in his office with the door closed. During these times, Petitioner had long social visits with an employee from another office in the building. He discussed personal matters with an auditor from the central office on the phone for extended periods of time. At times Petitioner's door was locked, so staff could not use the computer which was located in his office. Petitioner's subordinates were reluctant to disturb Petitioner during these times even if they had a question they needed to ask him. They began to complain to Linda Green about Petitioner's unavailability. Linda Green observed Petitioner sleeping during meetings. At first she ignored the situation. However, employees from other offices began to complain about Petitioner's sleeping during meetings. Linda Green also received complaints from other employees that Petitioner was misusing state property. They claimed that he was receiving facsimile transmissions not related to department business. Linda Green began taking notes about these complaints on her computer. She did not share these notes with Petitioner. Linda Green discussed the prohibitions against misuse of state property in staff meetings. She also discussed her concerns about Petitioner's sleeping in meetings, talking on the telephone, and entertaining visitors with Petitioner personally. In February of 1995, Respondent initiated a new job classification and pay plan. The 1994 Legislature mandated this new system, which is distinct from the career service rules promulgated by the Department of Management Services. The new system is unique to Respondent as an agency. Under the new system, Respondent's employees retain career service status and benefits. However, Respondent changed position descriptions, job classifications, employment qualifications, and pay scale ranges to create more flexibility in hiring, promoting, and reassigning duties of employees within the department. The new system concentrates on the knowledge, skills, and abilities required for each position rather than a minimum qualification for each class specification. Formal education remains important, but it is not the paramount consideration in deciding whether to hire or promote employees. The focus of the new system is to ensure that employees can perform the required functions and duties of the specific positions which they occupy or for which they apply. Under the new system, Respondent can reward employees for productivity by increasing their salary without having to promote them to a new position or reclassify their existing positions. Respondent can increase or decrease salaries within a new classification, depending upon the actual duties assigned and performed by the employees. The new plan reduced the number of career service job classes from over 52 occupational groups with 1700 job classifications to 16 occupational groups divided into six levels. Respondent uses the fourth and fifth levels within an occupational group to recognize the distinctive, but equivalent, value of technical and managerial expertise. For example, each occupational group embraces a Level IV and Level V which corresponds to technical and managerial expertise respectively. A reassignment from a Level V managerial position to a Level IV technical position, or vice versa, is not a demotion or promotion, respectively. The new Level IV and Level V positions allow Respondent to reassign employees to different duties to meet the demands of the changing work load and work force without adversely affecting their work status, employment records, or incomes. Thus, Respondent can shift employees from obsolete duties to new and viable tasks where they are more productive. When Respondent initiated the new system, and for one year thereafter, Respondent's central office had to approve every reassignment from an old career service position "title" to the corresponding new title. In performing this duty, Respondent's central office verified the salary for each position to ensure that the salary corresponded to the duties assigned to that position. The initial reassignments in the new system were effective February 24, 1995. At that time, Linda Green, Ms. Charron, and Petitioner were reassigned to the new Accounting, Audit, and Tax occupational group with no change in their respective salaries. Linda Green was assigned to Level VI, as District Financial Services Manager. Petitioner was assigned Level V, Accounting Services Supervisor I, which required that Petitioner spend over 51 percent of his time supervising other employees. Ms. Charron was assigned to Level III as an Accountant IV. Petitioner continued to be Ms. Charron's direct supervisor. A personality conflict developed between Petitioner and Ms. Charron after she became an Accountant IV in December of 1994. Ms. Charron did not want the employees that she supervised to seek or receive assistance from Petitioner, even though he was her supervisor. If Ms. Charron disagreed with Petitioner, she would go over Petitioner's head to Linda Green to resolve the conflict. Petitioner resented not having total control over all of the employees under his direct and indirect supervision. His attitude became confrontational with other employees when they asked a question or made a comment that he perceived as undermining his authority. At times he was overly assertive in an effort to prove that he was right on one point or another. Linda Green did nothing to open lines of communication between Petitioner, as supervisor, and Ms. Charron, as his subordinate. Petitioner did not seek Ms. Green's assistance in resolving the conflict with Ms. Charron. As the power struggle between Petitioner and Ms. Charron ensued, dissension and poor morale became a problem in the fiscal section. On one occasion, Debbie Williams and Laura Kennon were working with the central office to correct an invoice error on one of Petitioner's consultant contracts. Petitioner questioned the method they were using to correct the problem. He wanted them to correct the error without involving the central office or the State Comptroller's office. Ms. Williams wanted to leave a proper audit trail. Before the situation was resolved, all three employees became angry and confrontational. Around the end of February 1995, a member of the financial services staff requested a meeting to discuss the problems the office was having as a result of the dissension between Petitioner and Ms. Charron. Jean Jones, District Two's Director of Administration attended the meeting. Linda Green and Jean Jones advised the staff that they could go to either Petitioner or Ms. Charron for answers to any questions about their work. Linda Green did not tell her staff in this meeting, or any other meeting, that education did not mean anything in Respondent's financial section. After the meeting was over, Jean Jones told Linda Green that some changes had to be made to better define the lines of communication within the office. Ms. Jones instructed Ms. Green to do some research and develop a solution to the problem. A large part of Ms. Charron's duties included working on special projects. These projects necessitated frequent consultations between Linda Green and Ms. Charron. There is no persuasive evidence that Linda Green showed favoritism to Ms. Charron by conspiring with her against Petitioner in private meetings and conversations. To the contrary, the dissension that existed in the office was the result of a personality conflict between Petitioner and Ms. Charron. Ms. Green's inability to establish a clear chain of command aggravated the situation. Prior to November of 1994, Respondent provided Petitioner with an abundance of training in technical and management subject areas. Some of the technical seminars included consultant procedures and negotiation, contract fund approval and encumbrance, and contractual services training. Other training programs included office staff skills enhancement, employee selection, conduct standards and discipline, district budget development, supervisory decision making, employee performance appraisal, fundamental skills of communication, fundamental skills of management, and Certified Public Management Level I. After November of 1994, Petitioner continued to receive training to enhance his career. Some of the programs he attended included review and performance planning, how to supervise people, managing change, presentation skills, budget and budget orientation, federal aid training, records retention, and management problems of the technical person in a leadership role. Linda Green encouraged Petitioner to participate in the training programs. She gave him the opportunity to develop the skills necessary to enhance his career. In the spring of 1995, Linda Green worked on training plans for all personnel in the fiscal section including Petitioner. On April 7, 1995, Ms. Green discussed Petitioner's training plan with him. On April 25, 1995, a copy of Petitioner's training plan was discovered on his desk with the word "bullshit" written across the bottom. Petitioner admits that he wrote this expletive on his training plan in the presence of Ms. Charron. In April of 1995, the State Comptroller's office rejected and returned a great number of invoices to the financial office. Linda Green responded by assigning Petitioner the responsibility of handling the returns and correcting the errors. In order to stay apprised of the situation, Ms. Green required that all mail relating to returns be directed to her before being delivered to Petitioner. She did not review Petitioner's mail unrelated to the returns. In April of 1995, Linda Green became aware that certain work assigned to Petitioner and/or Petitioner's subordinates was not being performed in a timely manner. Ms. Green had to enlist the help of other personnel to complete the work. In April of 1995, Linda Green initiated the procedure to issue reprimands to Petitioner concerning his continued misuse of the office telephones and facsimile machines, his sleeping on duty, and his social visits that wasted time. However, this procedure was delayed because Petitioner was hospitalized for surgery. Petitioner was out of work on sick leave from April 27, 1995, to May 30, 1995. During his illness, Linda Green extended Petitioner's probationary period for his Accounting Services Supervisor I position. In the 1992-93 fiscal year, the financial services office had approximately 12 primary responsibilities. The financial office gained 10 additional duties in the 1993-94 fiscal year and 18 new duties in the 1994-95 fiscal year. During this time, the number of positions in the financial office doubled. In May of 1995, Linda Green began to plan the reorganization of the financial section. She discussed the reorganization with her supervisor, Jean Jones. They made a decision to divide the responsibilities in the financial services office between Petitioner and Ms. Charron, the two established supervisors. They based the decision in part on a need to accommodate the increased work load. They also decided to split the supervision duties in an effort to improve the lines of communication within the office and to eliminate dissension. Officials in Respondent's central and district offices approved the reorganization. Under the reorganization plan, Ms. Green decided to give Petitioner responsibility for the following: supervising the concentration account; processing purchase orders, local purchase orders, local charge accounts, and utility invoice transmittals; processing travel and individual reimbursements; handling deposits; supervising warrant distribution; and processing mail. Ms. Green deleted Petitioner's duties relative to payroll and contracts. Ms. Charron's duties under the reorganization included supervision of the following: contracts, reconciliations, compliance reports, interest payments, and journal transfers. She assumed supervision of the payroll at the express request of Jean Jones. Additionally, Ms. Charron was assigned numerous special projects. When Petitioner returned to work from sick leave on June 1, 1995, Linda Green discussed the reorganization with Petitioner and Ms. Charron. She advised them that Ms. Charron would supervise four Level Two positions, one of which was vacant. Petitioner would supervise five Level One positions, all of which were occupied. Petitioner and Ms. Charron would report directly to Linda Green. Linda Green decided to have Petitioner supervise the Level One positions because they needed more supervision than the Level Two positions. Petitioner was better qualified than Ms. Charron to supervise the five entry level positions occupied by minority and non-minority employees. On June 15, 1995, Linda Green promoted Ms. Charron to Accounting, Audit, Tax Level V. Her salary was increased by 20 percent to $1,114.20 bi-monthly. The promotion was effective before the expiration of Ms. Charron's probationary period as an Accountant IV. The decisions to reorganize the section and promote Ms. Charron were made while Petitioner was absent on sick leave. Linda Green did not deliberately choose to promote Ms. Charron without consulting Petitioner as her supervisor. Moreover, Ms. Green, as manager, had no duty to consult with Petitioner before reorganizing the office. On June 16, 1995, Linda Green issued two official written reprimands against Petitioner. The first written reprimand involved a violation of Respondent's Conduct Standard 14-17.012(4)(a)6., Florida Administrative Code, for sleeping on duty. The reprimand documented the following occasions that Petitioner violated this conduct standard: November 30, 1994; December 1, 1994; January 5, 1995; March 13, 1995; March 20, 1995; March 21, 1995; March 30, 1995; June 5, 1995; and June 7, 1995. Prior to June of 1995, numerous employees were observed sleeping in meetings. The record contains no evidence that any of them were given written reprimands for sleeping on duty. Except for one of these employees, there is no evidence that their respective supervisors were aware that they were sleeping on duty. One employee, Jim Spencer, was observed sleeping on duty by his direct supervisor, Jean Jones. He was not on permanent career status at the time. Jean Jones decided to extend Mr. Spencer's probationary status rather than issue him a written reprimand. Ms. Jones made a conscious decision to give Mr. Spencer an opportunity to correct his behavior before dismissing him from employment. The second official written reprimand charged Petitioner with violating Respondent's Conduct Standard 14-17.012(4)(a)25., Florida Administrative Code, for unauthorized use or misuse of state property, services, equipment or personnel, and Respondent's Conduct Standard 14-17.012(4)(a)7., Florida Administrative Code, for loafing. This reprimand was the result of Petitioner's continued abuse of telephone privileges from January through June of 1995, misuse of the facsimile machines from February through May of 1995, and extended social visits with an employee from another office from January through March of 1995. Petitioner's alleged misuse of Respondent's facsimile machine was due to his involvement with the Safe and Drug-free Schools Advisory Council sponsored by the Columbia County School Board. Petitioner was cautioned in staff meetings on February 13, 1995, and February 21, 1995, against using state property for personal reasons. After those meetings, he received announcements of advisory council meetings on February 27, 1995, and April 26, 1995. He received a third fax transmission from the school board on May 16, 1995, while he was on sick leave. The school board solicited Petitioner's participation in the advisory council during one of Respondent's staff meetings. Respondent's employees did not have to request leave to attend the meeting. Nevertheless, Respondent did not give its employees permission to use its facsimile machines to receive notices about advisory council meetings or other volunteer work. Petitioner contacted the school board staff to tell them not to send him notices using Respondent's facsimile machines. The record is not clear as to when Petitioner made this request. Petitioner did not receive facsimile transmissions from the school board after he received the reprimand in June of 1995. The record contains evidence of four written reprimands for employee misuse of state property from December 1994, through May 1995. From February 1996, through June 1996, six employees were given written reprimands for misuse of state property. The reprimands of other employees included misuse of telephone privileges, computers, and agency stamps and stationary. These reprimands, together with competent evidence that Petitioner abused his long-distance telephone privileges as set forth below, eliminate any concern that Petitioner received disparate treatment regarding his reprimand for misuse or unauthorized use of state property. There is no evidence that Respondent has ever cited anyone but Petitioner for loafing. Nevertheless, the record supports this charge against Petitioner. Juanita Aiken works in Respondent's central office as an Disbursement Services Analyst. She testified that she often discussed personal matters with Respondent's employees in long- distance telephone conversations before she addressed the business purpose of her call. Linda Green personally informed Petitioner in January of 1995 that he needed to confine his long-distance telephone conversations with Ms. Aiken to department business. Petitioner did not heed her verbal warning. Ms. Aiken's personal telephone conversations with Petitioner did not cease until Linda Green and Jean Jones contacted her supervisor in Tallahassee. In the spring of 1995, Linda Green solicited Debra Williams' help in monitoring Petitioner's personal telephone calls. Ms. Williams declined to become involved and requested that her desk be relocated to another area. Linda Green assigned Ms. Charron a desk in Petitioner's private office in April of 1995. Ms. Charron complained to Ms. Green that Petitioner was talking on the phone for 30 to 45 minutes everyday and sometimes twice a day. The personal nature of the calls made Ms. Charron feel uncomfortable. Olu Olyewole worked for Respondent as a Distributor Computer Systems Analyst. He was responsible for connecting personal computer terminals to the networking system. He visited Petitioner regularly for extended periods of time until Ms. Green complained to his supervisor. When Mr. Olyewole visited Petitioner, the door to Petitioner's private office would often be closed. Early in 1995, Wanda Jean Hills desk was located in the glass-enclosed office with Petitioner's desk. On one occasion she could not get to her desk because she believed Petitioner and Mr. Olyewole were having a private conversation. The long social visits with Mr. Olyewole wasted time in an office that was overburdened with work. The visits interfered the performance of work by Petitioner and his subordinates. Petitioner was unavailable to his subordinates during these visits because they were reluctant to disturb his conversations, even when they needed his assistance. Linda Green did not reprimand any of her subordinates except Petitioner for misuse of state property, sleeping on duty, or loafing. However, there is no evidence that other employees under her authority violated the same conduct standards that Petitioner violated. There is evidence that Linda Green sold Amway products to employees on Respondent's property over a two-month time span. The record does not reflect the exact period of time in which Ms. Green engaged in this activity. The greater weight of the evidence indicates that Linda Green passed out Amway brochures and delivered merchandise before work in the mornings. At times, her co-workers would place an order with Ms. Green during work hours because they were familiar with Amway products and knew that she was an Amway representative. Occasionally, Respondent's employees would hand Ms. Green a check or leave one in her desk during work hours. Linda Green did not aggressively pursue her private enterprise during work hours. There is no evidence that Ms. Green's private business activities interfered with her duties or usurped a significant portion of her time as manager of the financial section. Respondent did not give Linda Green a written reprimand for conducting private business on Respondent's property. The record does not reflect whether Ms. Green was verbally reprimanded. It does not appear that her supervisor, Jean Jones, was aware that Ms. Green was involved in selling Amway products on department property. The record does not contain evidence of any written reprimand based solely on unauthorized solicitation on state property. It does contain evidence that Respondent issued a written reprimand to an employee for conducting personal business while using a state vehicle. The employee's actions, like Ms. Green's, were incidental to the performance of his duties. The employee's supervisor did not require the employee to reimburse the agency for any cost. On June 16, 1995, Linda Green gave Petitioner a special performance appraisal to evaluate his performance as a supervisor since November 21, 1994. To conduct this evaluation, Ms. Green used the performance appraisal form for supervisors and managers that was in effect when Petitioner was promoted to Accounting Services Supervisor I in November of 1994. Linda Green admits that she did not conduct the required initial review of the relevant performance standards with Petitioner within two weeks of his promotion. Nevertheless, Petitioner's claims that he was not familiar with the performance standards used by Ms. Green to evaluate his performance is not persuasive. Petitioner attended at least two seminars in performance appraisal and performance planning. Petitioner was familiar with the performance standards for a supervisor, which became effective after Respondent initiated its career service reform in February of 1995. He signed the RAPP form on February 13, 1995. The standards contained on the new appraisal form are substantially similar to the performance standards listed on the older appraisal form. Linda Green gave Petitioner an overall performance rating of "below" standards. The record supports her determination that Petitioner's work performance began to fall short of expectations after he assumed the position as an accounting supervisor. Linda Green determined that Petitioner's performance in two categories deserved the highest rating of "achieves." These two categories were EEO/AFFIRMATIVE ACTION and SAFETY PRACTICES. Linda Green determined that Petitioner's performance was substantially below expectations in at least one area of each of the remaining six categories for the following reasons: PLANNING, CONTROLLING AND ORGANIZING WORK Petitioner failed to operate his work areas efficiently. He did not notify his supervisor of job related problems. Petitioner did not take necessary and appropriate action on performance and shortcomings of subordinate employees. SUPERVISION/LEADERSHIP OF PEOPLE Petitioner failed to delegate effectively. Petitioner demonstrated dissension toward other staff members. PERFORMANCE APPRAISALS Petitioner did not take necessary and appropriate action on performance shortcomings of subordinate employees. PROBLEM ANALYSIS/DECISION MAKING Petitioner failed to inform and/or consult with necessary persons during the decision- making process. SELF DIRECTION/PERSONAL SKILLS Petitioner failed to use his work time effectively. He abused his telephone privileges. He wasted time visiting with an other employee. JOB PERFORMANCE Petitioner failed to perform specific job assignments as outlined on his position description or as assigned by appropriate management. A job applicant claimed that he earned 2400 credit hours in a U.S. Army finance school within a two-month period. Petitioner offered the applicant a job without verifying this information. Linda Green subsequently determined that the applicant had misrepresented his qualifications and withdrew the job offer. Based on this incident alone, Petitioner did not meet the standard for job performance in general. In December of 1995, Rick Haddock received a promotion to a Level II accountant. His salary increased by 20 percent to $715.27 bi-monthly. In March of 1996, Petitioner had a confrontation with Mary Caldwell, a white female accountant. Petitioner's voice was loud; he sounded very angry and threatening. The disturbance alarmed several employees who were in the vicinity. Ms. Caldwell and Petitioner went into a private office where the argument continued. Petitioner's behavior toward Ms. Caldwell was totally inappropriate. On March 22, 1996, Linda Green gave Petitioner a written reprimand for violation of Respondent's Conduct Standard 14-17.012(4)(a)16., Florida Administrative Code, involving rudeness, display of uncooperative or antagonistic attitude, actions or behavior. That same day, Ms. Green gave Petitioner a mandatory Employee Assistance Program Referral. In June of 1996, Linda Green deleted Petitioner's duties involving the budget and supervision of the vouchering section. Linda Green gave Patsy Green, a white female, Petitioner's budget responsibilities. Linda Green took this initiative because of the increased work load resulting from continued decentralization. The central office initiated a process in 1996 to conduct a periodic formal Quality Assurance Review (QAR) in each district office. The purpose of the QAR was to ensure that all vouchers were correct before they were sent to the billing office of the State Controller. Ms. Green wanted Petitioner to focus his energy on making sure that District Two's vouchers were in compliance with all state regulations. In June, 1996, Linda Green gave Petitioner additional duties including financial audits and investigations, quality assurance reports, reconciliations, comptroller returns, and liaison with the State Comptroller's office. His new duties were in-depth auditing and accounting responsibilities involving job cost reporting and making sure that the accounting system stayed in balance. Petitioner's salary was not decreased when his job description changed. At the same time, Linda Green gave Ms. Charron additional duties including contract funds management, joint participation agreements, settlement agreements, management reports, training, and numerous special projects. Ms. Green deleted Ms. Charron's supervisory responsibilities over the contract section. Linda Green received information in June 1996, that the central office intended to audit the supervisory positions in District Two. The central office wanted to make sure that all Level V positions in the Accounting, Audit, and Tax occupational group were held by employees spending at least 51 percent of their time in supervision. Petitioner and Ms. Charron were not spending 51 percent of their time in supervising the work of other employees. Accordingly, both of them were reassigned on June 14, 1996, to Level IV of the Accounting, Audit, and Tax occupational group. The working title for each of them became Accounting Services Administrator. This change was not a demotion and did not effect their respective salaries. Instead, the reassignments accurately reflected the actual duties of their positions. After Petitioner filed his Charge of Discrimination, Michael Klump, from Respondent's Minority Program Office in Tallahassee, Florida, was assigned to furnish all information requested by FCHR and to prepare the agency's response to the complaint. Mr. Klump's duties did not involve investigating the alleged charges on behalf of FCHR. Respondent's Minority Program Office prepared a letter dated September 11, 1995, addressed to Petitioner. The purpose of the letter was to advise Petitioner that the agency had received the complaint. It states that Petitioner should contact Mr. Klump if Petitioner had any additional information or questions regarding this matter. There is no competent evidence to indicate whether Petitioner received the letter from the Minority Program Office. Mr. Klump visited Respondent's District Two Office in Lake City to gather the information requested by FCHR. He did not interview Petitioner while he was there. Respondent's Minority Program Office does not routinely interview complainants who file a charge of employment discrimination with FCHR unless the complainant responds to a letter similar to the one addressed to Petitioner. There is no credible evidence that Respondent prepared its response and/or position statement to FCHR with the intention of misrepresenting material facts. Linda Green gave Petitioner a copy of her computer notes relative to dissension in the office when he first requested them. However, she edited the notes to delete the names of employees that had complained about Petitioner. At the hearing, Ms. Green produced an unedited copy of the notes which had been updated beyond the time relevant here. There is no persuasive evidence that Respondent intentionally discriminated against Petitioner on the basis of his race or gender or retaliated against him for filing his Charge of Discrimination.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Commission on Human Relations enter a Final Order dismissing Petitioner's claims of racial and gender discrimination and retaliation. Recommended this 15th day of October, 1997, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1997.
The Issue The issue is whether the Stop Work Order issued on July 27, 2007, and the Amended Order of Penalty Assessment were lawful.
Findings Of Fact The Division is a component of the Department of Financial Services. The Department is charged with the administration of portions of the "Workers' Compensation Law." Versa-Tile is a corporation headquartered in Mary Esther, Florida. Versa-Tile is engaged in flooring, which is a construction activity. Michelle Newcomer is an Insurance Analyst II with the working title of Workers' Compensation Compliance Investigator. She maintains an office in Pensacola, Florida. It is her job to travel to work sites and to verify compliance with the Workers' Compensation Law. She is authorized by the Division to issue an SWO and to calculate and assess penalties. On July 24, 2007, Ms. Newcomer was conducting compliance investigations at random sites in the Alys Beach area of Walton County, Florida. While doing so she noticed three individuals in the garage at the rear of a house at 23 Whitby. They were removing tools from a toolbox and "working." Ms. Newcomer identified the men as Adrian Womack and Kent Degallerie. The third man on the site was named "Barker." Barker asserted that he was not doing any work, but was there just to give the men a ride. He was deemed not involved in the work being accomplished at the site. Ms. Newcomer interviewed Adrian Womack and Kent Degallerie. They both told her that they were exempt officers of Versa-Tile. It is found as a fact that the 2006 For Profit Corporate Annual Report of Versa-Tile signed on April 26, 2006, and filed with the Department of State on May 1, 2006, listed Adrian Womack and Kent Degallerie as corporate officers of Versa-Tile. They were not corporate officers of Versa-Tile prior to April 26, 2006. Adrian Womack worked for Versa-Tile from July 29, 2005, until April 25, 2006, as an employee. He was not an officer and was not, and could not be, exempt. Kent Degallerie worked for Versa-Tile from May 6, 2005, until April 25, 2006, as an employee. He was not an officer and was not, and could not be, exempt. Nicholas Womack, who was not present at the Alys Beach site, is listed therein as president of Versa-Tile and has been exempt during all times pertinent. As corporate officers, Adrian Womack and Kent Degallerie could be exempt from the usual requirement that workers be covered by workers' compensation insurance even though they were also employees of Versa-Tile who were paid wages. Ms. Newcomer obtained their full names and social security numbers so that she could verify their claimed exemption. She determined from the Department's Coverage and Compliance Automated System that there were no records of exemption being obtained for them. Ms. Newcomer confirmed with an examiner in the Pensacola office that Adrian Womack and Kent Degallerie were not on the list of exempt persons. She issued a Request for Production of Business Records dated July 24, 2007. She personally served these documents on Adrian Womack and Kent Degallerie. She issued an SWO, dated July 27, 2007, and personally served it on Nicholas Womack. If a person is a ten percent owner of a corporation or limited liability company they are entitled to obtain an exemption from the Department. An exemption is obtained by completing the "Notice of Election to be Exempt" form. This form when properly completed and accompanied by certain required documents, a $50 application fee, and submitted to the Division, will cause the Division to grant an exemption. If the Department determines that a person is exempt upon receiving a properly submitted form and payment, the Department will issue a card reflecting exemption. Neither Adrian Womack nor Kent Degallerie had such a card on July 24, 2007. During all times pertinent, the Department had no record indicating it had received any payment from Nicholas Womack, Adrian Womack, or Kent Degallerie that would have been tendered on behalf of Adrian Womack or Kent Degallerie. On July 27, 2007, Ms. Newcomer met with Nicholas Womack, president of Versa-Tile in her office in Pensacola and personally served him a Request for Production of Business Records. Later, Nicholas Womack provided employment records to Ms. Newcomer. On July 30, 2007, the Department and Versa-Tile entered into an agreement that permitted Versa-Tile to go back to work. Using workers' compensation class code 5348 for employees Adrian Womack and Kent Degallerie, Ms. Newcomer correctly calculated the premium that should have been paid, if they were mere employees, as $8,455.56, and multiplied that figure by the statutory penalty of 1.5. She correctly determined the total to be $12,683.35. The parties stipulated that to the extent the figure applies, it is correct. Nicholas Womack at all times pertinent had an exemption. Adrian Womack and Kent Degallerie were granted exemptions by the Department on July 30, 2007. These were the first exemptions from workers' compensation coverage that they had ever received while in a business relationship with Versa- Tile. The Division receives from 90,000 to 96,000 construction exemption applications yearly. They also receive between 30,000 to 35,000 non-construction exemption applications annually. The applications may be provided by applicants to the Department by hand-delivery at a field office or to the Department headquarters in Tallahassee, or by mail to a field office or to the Department headquarters in Tallahassee. Errors may occur in this process because of mistakes or omissions in the applications filed by the applicant or because of data entry errors by personnel in the Department. However, the process is sufficiently simple and automated that usually, when a complete application is filed, the exemption issues, and the applicant is, thereafter, provided a card reflecting the exemption via mail. There are ten field offices in the state to which applicants may file applications for exemptions. The field office in Panama City, Florida, at least the portion that accepted exemption applications, closed in 2005. However, the forms still listed Panama City as an address to which one might mail an application for exemption. The president of Versa-Tile, Nicholas Womack, has filed for and obtained three exemptions since he created Versa- Tile. Prior to incorporating Versa-Tile, he owned another business by the name of Nicholas Womack Flooring, Inc. He previously had two officers, Michael Smith and Mitchell Smedley, working with him at Versa-Tile, but he removed them as corporate officers so that Adrian Womack and Kent Degallerie could be corporate officers. Mr. Smith's exemption was revoked April 27, 2006, by the filing of a Notice of Revocation of Election to be Exempt with the Department. This roughly coincided with the naming of Adrian Womack and Kent Degallerie as corporate officers. Department of State corporate records, as of May 1, 2006, reflected that Versa-Tile had three officers: Nicholas Womack, Adrian Womack, and Kent Degallerie. In order to obtain a certificate of exemption, Nicholas Womack filed the appropriate form with the Department, along with proof that he held a contractor's license, stock certificates, and $50.00. He followed this process on three occasions while president of Versa-Tile. The evidence of record reveals exemptions granted to Nicholas Womack on January 25, 2005, and May 18, 2006, while president of Versa-Tile. He claims not to ever have received a certificate evidencing exemption from the Department while president of Versa-Tile. Nicholas Womack testified that on only one of the occasions, when he was operating Nicholas Womack Flooring, Inc., did the Department mail him a card reflecting his exemption and stated that occurred in 2001 or 2002. Nicholas Womack understands that by not obtaining coverage under workers' compensation insurance he and the other two corporate officers of Versa-Tile would not be compensated should they be injured on the job. Nicholas Womack explained to Adrian Womack and Kent Degallerie that they were eligible for an exemption, and if they got an exemption and were injured, they would not be covered by workers' compensation insurance. Nicholas Womack testified that thereafter he helped the two men fill out the appropriate forms and ensured that all necessary attachments, including two money orders in the correct amount, were present and then mailed the applications, one in each envelope, to the Department's Panama City office. As soon as the applications were mailed, Nicholas continued allowing the men to work for Versa-Tile without waiting for the exemptions to be granted. Adrian Womack and Kent Degallerie first received exemption on July 30, 2007. Subsequent to July 30, 2007, Nicholas asked Adrian Womack if he had received an exemption card. Adrian Womack said that he had not. Adrian Womack and Kent Degallerie both stated that they had not received an exemption card after filing for exemption in July 2007. Nicholas Womack's testimony that he only received one certificate of exemption in seven years of enjoying an exempt status lacks credibility. Even considering that the Department is large and it annually processes huge amounts of paperwork, it is quite improbable that on six occasions they would fail to send Nicholas Womack a certificate. That being the case, Nicholas Womack's testimony that he mailed completed applications for Adrian Womack and Kent Degallerie to the Department's Panama City office and never received any type of response, when considered in concert with his other testimony, is not credible. It is a fact that Nicholas Womack, Adrian Womack, and Kent Degallerie were eligible for an exemption subsequent to April 26, 2006. If exempt, they were responsible for their own expenses should they suffer an injury while on the job. If they failed to get an exemption, they were likewise responsible for their own expenses should they suffer an injury while on the job. This situation is very different from that where an employer fails to obtain coverage for workers not having an ownership interest in the employer, as was the case with Versa- Tile prior to April 26, 2006.
Recommendation Based upon the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order requiring Versa-Tile and Marble, Inc., to pay a penalty of $12,683.35. DONE AND ENTERED this 25th day of January, 2008, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of January, 2008. COPIES FURNISHED: Kristian E. Dunn, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Michael James Rudicell, Esquire Michael J. Rudicell, P.A. 4303 B Spanish Trail Road Pensacola, Florida 32504 Daniel Sumner, General Counsel Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue for determination is whether Respondent should grant Petitioner's application for a sales tax exemption certificate as a charitable institution within the meaning of Section 212.08(7), Florida Statutes. 1/
Findings Of Fact Respondent is the governmental agency responsible for issuing sales tax exemption certificates in accordance with Section 212.08(7). Petitioner is a non-profit, Florida corporation and a charitable organization, within the meaning of Section 501(c)(3) of the Internal Revenue Code, for purposes of the federal income tax. On December 29, 1995, Petitioner applied for an exemption from state sales and use tax ("sales tax") as a charitable institution. On February 8, 1996, Respondent denied Petitioner's application. The parties stipulated that Petitioner is a non-profit corporation. The parties further stipulated that the only exemption under which Petitioner may qualify for a sales tax exemption is the exemption for a charitable institution. In order to qualify as a charitable institution, Petitioner must provide one or more of seven services listed in Section 212.08(7). The parties stipulated that the only service Petitioner arguably provides as a charitable institution is that of raising funds for medical research within the meaning of Section 212.08(7)(o)2b(V). It is uncontroverted that Petitioner does not provide medical research directly. Petitioner raises funds for its national organization. The national organization then disburses funds raised by local affiliates. Petitioner failed to submit any competent and substantial evidence showing the disposition of funds by its national organization. Petitioner failed to show that its national organization either provides direct medical research or raises funds for one or more organizations that provide medical research.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order and therein DENY Petitioner's request for a sales tax exemption. RECOMMENDED this 4th day of June, 1996, in Tallahassee, Florida. DANIEL S. MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of June, 1996.
Findings Of Fact Leslie H. Roth is a licensed CPA in the State of Florida, holding License No. R0004593. He was employed by the CPA firm of Rachlin & Cohen from December 2, 1974, through August 26, 1977. During that period of employment he was paid a salary plus a commission based upon the number of clients he brought to the firm and the fees he generated. The Respondent left that firm on August 26, 1977, and became an employee of Holiday Inn at Calder Race Course in Miami. Upon leaving the firm of Rachlin & Cohen the Respondent signed acknowledgements disclosing the status of the clients' work to which he had been assigned and the related amount of money owed to the firm. When he left that firm, the firm owed him no additional commissions or salaries. The Respondent failed to remit to Rachlin & Cohen the fees collected from their clients for whom he had performed services and when Rachlin & Cohen attempted to collect those fees some of the clients claimed they had already paid the Respondent. Rachlin & Cohen, therefore, filed suit in circuit court and obtained a judgment against the Respondent in the amount of $550 representing the firm's fees collected by the Respondent. In early 1978, while working as a CPA for Holiday Inn at Calder Race Course, the Respondent prepared some unaudited financial statements in order to help the business maintain or keep a loan with a financial institution. These unaudited financial statements are required to comply with applicable generally accepted accounting principles and auditing standards. They contained a technical deficiency because the Respondent failed to disclose an aggregate future minimum lease payment and a potential deficiency in that the notation that the statements were "before final year-end adjustments" did not disclose whether material adjustment needed to be made. The Respondent also was shown to have performed the service of filing a "1120-SK-1 form" for Pro-Management, Inc., while Pro-Management, Inc., was a client of Rachlin & Cohen. Filing s such a form is normally the duty of the regularly retained accounting firm for that company. The Respondent's "reestablishment period" for his CPA license was 1977 through 1979. He was required to file yearly continuing professional education reports related to his reestablishment period. These were due by January 15, of each following year, reporting on his level of compliance with continuing professional education (CPE) requirements for the preceding year. In 1977, when the period started, the CPE requirements were 30 hours per year, with at least 8 hours of accounting and auditing. If not completed the first year and any time during the 3-year period, he would have to completed 120 hours of CPE courses, including at least 32 hours of accounting and auditing. In October, 1977, the law changed and licensees could choose to complete the old requirements or the new ones which were 24 hours per year including at least 64 hours of auditing and accounting, but licensees could not use a combination of those. If a licensee files such a form substantially late it must be accompanied by a verification of attendance at the subject CPE courses. The CPA is also required to maintain documentation of CPE courses attended for 3 years following his reestablishment period. The Respondent filed a CPE education report for 1977 on January 1, 1978. It was reviewed and returned February 1, 1978, with a letter by the Board explaining that the Respondent had reported one course incorrectly for "accounting and auditing" when it was only half-approved for that category. He also was informed by the Board that he reported 7 hours of accounting and auditing credit for Dade County, Florida Institute of CPA Monthly Meetings, but with no dates and no titles of sessions attended. The Respondent returned the 1977 form to the Board's office January 7, 1980, along with the 1978-1979 CPE report forms, approximately 2 years late with regard to the 1977 form and 1 year late with regard to the 1978 reporting period. The forms filed by the Respondent reflected that in 1977 he had obtained 22 hours of accounting and auditing and 34 hours total CPE. He still supplied no dates for the meetings of the Dade County Chapter of FICPA, nor had he apportioned hours properly. He reported 15 hours accounting and auditing and 37 hours total CPE for 1878, but again he included FICPA monthly meetings for 4 hours of his accounting and auditing requirement and 4 hours for "other." Under the category "Accountants for Public Interest," he reported 3 hours accounting and auditing and 10 hours "other," but with no itemization of the programs attended on his 1979 form. The 1979 form was, however, timely filed. The hours reported by the Respondent which were verified still did not fulfill the continuing professional education requirements imposed by the Board for the years involved. The staff of the Board attempted to notify the Respondent of the deficiencies in his reporting and requested verification of his courses attended. The Board received no response from the Respondent. In view of his lack of response and the deficiency in reporting CPE courses attended, the Continuing Education Committee recommended to the Board of Accountancy that the Respondent's license be reverted to inactive status. The Respondent was accordingly notified on March 1, 1980, that his continuing professional education appeared deficient and he was given 30 days to correct the situation. The Respondent did not respond and on May 1, 1980, he was informed by the Continuing Professional Education Committee that it would recommend to the Board that it relegate his license to inactive status. On July 30, 1980, the Respondent was sent another letter with essentially the same information giving him an additional period of time to resolve his difficulty. Finally, at the August, 1980, meeting of the Board of Accountancy the reversion to inactive status was accomplished. The Respondent's license has thus legally been inactive since August 20 of 1980. Since May of 1980, to the date of the hearing, the Respondent has been employed by Gerson, Preston & Co., a CPA firm, where he has utilized his accounting skills and worked as a staff accountant. He has thus practiced as a CPA since August 20, 1980.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that the Respondent, Leslie H. Roth, be found guilty of the charges in the Administrative Complaint herein and that his License No. ROOO4593 be placed in a suspended status for 3 months from the date of the final order herein; that his licensure then be returned to active status, but that he be placed on probation for 3 years and be required to complete 120 hours of continuing professional education, including at least 32 hours of accounting and auditing and that he be fined the sum of $1,000. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 5th day of October, 1981. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of October, 1981. COPIES FURNISHED: Drucilla E. Bell, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Leslie H. Roth Post Office Box 9174 Pembroke Pines, Florida 33024
The Issue The issue for determination is whether Respondent committed an unlawful employment act by discriminating against Petitioner on the basis of race in violation of the Florida Civil Rights Act of 1992, as amended.
Findings Of Fact Ms. Westbrooks is an African-American female. In 2000, Ms. Westbrooks began her employment with the City in a billing position in Customer Service as an Account Clerk. She performed very well in that position and received an above satisfactory rating. In 2002, a Junior Accountant position became available, and Ms. Westbrooks applied for the position. The position description for a Junior Accountant indicates that the position’s duties included “Professional accounting work covering all fixed assets accounting and reporting.” Further, the position description indicates that the minimum qualifications consisted of the following: Associate’s degree in Accounting or related field, with some work experience in an accounting environment OR An equivalent combination of training and experience which provides the required knowledge, skills and abilities. Carlos Perez, the City’s Finance Director and a Certified Public Accountant (CPA), performed the hiring for the Junior Accountant position. He hired Ms. Westbrooks for the Junior Accountant position. Mr. Perez considered Ms. Westbrooks’ performance in the Junior Accountant position as excellent. She consistently received performance ratings of above satisfactory and merit increases. In 2006, an Accountant position became available. The City advertised the position. The announcement for the position indicated that the position’s duties included “complex technical work performing professional accounting work covering all phases of account maintenance, classification, analysis, and expenditure control of all phases of City wide fiscal transactions.” Further, the announcement indicated that the minimum requirements for the position were: Bachelors degree in Accounting, Finance or a closely related field with major coursework in accounting . . . plus one to two years experience in accounting. OR An equivalent combination of training and experience which provides the required knowledge, skills, and abilities. Moreover, the announcement provided that “Only those applicants who most closely meet the specific requirements for the position will be contacted for an interview.” Ms. Westbrooks applied for the Accountant position. No dispute exists that Ms. Westbrooks does not possess a bachelor’s degree in accounting. She has an Associates in Arts (AA) degree in Business Administration, which she obtained in 1993. At all times material hereto, the City had a tuition reimbursement program, wherein an employee of the City could obtain a degree and receive tuition reimbursement for obtaining the degree. Ms. Westbrooks was aware of the reimbursement program but chose not to avail herself of it in order to obtain a bachelor’s degree in accounting. However, she did avail herself of the program to obtain certifications associated with her position as a Junior Accountant. No dispute exists that Ms. Westbrooks met the minimum requirements for the Accountant position, satisfying the alternative requirement of equivalent combination of training and experience. Ms. Westbrooks was provided an interview. An interview panel conducted the interviews and rated the applicants, who were interviewed, on a scale of 0 through 5. The interview panel consisted of the City’s Chief Accountant, Budget Administrator, and Pension Administrator. Only the applicants who had an overall rating of 3.0 or higher on the interview were submitted by the City’s Personnel Administration Director, Rebecca Jones, to Mr. Perez. Ms. Jones is an African American and is female. Mr. Perez makes the final decision as to who is hired for accounting positions. He was the final decision-maker for this Accounting position. Mr. Perez is not African American. Only three persons received an overall interview rating of 3.0 or higher. Ms. Westbrooks was one of the three persons, and she received the highest interview score. On December 6, 2006, Ms. Jones submitted to Mr. Perez the names of the three persons, with their interview scores: Laura Westbrooks 4.0 Ronald Castrillo 3.4 Bayard Louis 3.3 Mr. Perez had never hired an accountant who did not have a four-year college degree, i.e., a bachelor’s degree, regardless of race. His position was that the person hired for the Accountant position, and all of his accountants, needed a four-year college degree because that person, as all of his accountants, would be fourth in line to head the Finance Department, as Acting Finance Director, behind himself, the Assistant Finance Director, and the Chief Accountant—at least once a year he (Mr. Perez), the Assistant Finance Director, and the Chief Accountant all attend a conference together; and that a person with a four-year college degree has the technical ability needed to perform in the position, whereas, a person without a four-year degree would not have the technical ability needed. Further, as to the accounting focus of a junior accountant position versus an accountant position, a junior accountant’s focus is fixed assets, whereas, accountants are involved with all aspects of accounting, which includes and goes beyond fixed assets. Mr. Perez had made Ms. Westbrooks aware of his position, regarding accountants, during her tenure in the Junior Accountant position. Ms. Jones did not consider Mr. Perez’s position and action, regarding the hiring of accountants, as being discriminatory. Mr. Perez’s final requirement of a four-year college degree in order to be hired by him as an accountant became the City’s requirement. Mr. Perez offered the Accountant position to Mr. Castrillo who had an AA degree in Business Administration, a Bachelor’s degree in Accounting and who was scheduled to graduate the following semester with a Master’s degree in Accounting. However, Mr. Castrillo did not accept the position due to the failure to agree on a salary. The Accountant position was re-advertised. Ms. Westbrooks remained eligible for the Accountant position and was, therefore, in the pool of applicants to be considered; but was not re-interviewed because the interview questions did not change On March 8, 2007, Ms. Jones submitted to Mr. Perez the names of the applicants who had an overall rating of 3.0 or higher on the interview, together with their interview scores: Tricia Beerom 4.0 Sampson Okeke 3.4 Mirtha Servat 3.3 Mr. Perez hired Ms. Beerom for the Accountant position. Ms. Beerom had a Bachelor of Science degree in Accounting and Management and was an African-American female. Ms. Westbrooks believed that she was not afforded an opportunity to advance because of Mr. Perez’s position regarding accountants possessing a four-year degree and that, therefore, she was discriminated against. However, even though the City had a policy against discrimination and a procedure to file discrimination complaints, she chose not to proceed through the City’s discrimination process because she had no faith in the City. Ms. Westbrooks believed that she was not going to be treated fairly by the City in any attempt by her to achieve upward mobility, which caused her to continuously experience stress, which negatively impacted her health. She eventually resigned from the City. Ms. Westbrooks’ resignation was effective May 4, 2007. At the time of her resignation, Ms. Westbrooks’ salary was $40,000. After her resignation, she received her contributions to the City’s retirement system in the amount of approximately $13,000. In September 2008, over a year after her resignation from the City, Ms. Westbrooks obtained employment with the University of Miami, School of Medicine, as a Grant and Contracts Specialist, with a salary of $41,500. Ms. Westbrooks did not identify any employees who were in classified positions as herself, who were or were not African American and who had upward mobility in positions, and who did not have four-year college degrees. Classified positions are protected by the City’s Civil Service rules and must be advertised. Ms. Westbrooks did identify City employees who were in unclassified positions, not a classified position like herself, i.e., directors and city manager, who did not have four-year college degrees, and who were and were not African American. Unclassified positions are not protected by the City’s Civil Service rules and need not be advertised. The city manager hires all department directors. No dispute exists that, at all times material hereto, a former Director of Purchasing was a white female and a long term employee, who had an AA, not a four-year degree, and who was promoted through the ranks; a Director of Public Works was a white male and a long-term employee, who had an AA, not a four- year degree, and who was promoted through the ranks. No dispute exists that the City’s City Manager is an African-American male who does not have a four-year college degree. No dispute exists that, at all times material hereto, all of the City’s Department Directors, who are African American, have four-year college degrees. The EEOC instituted an “E-RACE Initiative (Eradicating Racism and Colorism from Employment)” and developed a “set of detailed E-RACE goals and objectives to be achieved within a five-year timeframe from FY [fiscal year] 2008 to FY [fiscal year] 2013.” Included in the E-RACE Initiative, were “Best Practices for Employers and Human Resources/EEO Professionals,” which included best practices for recruitment, hiring and promotion. The E-RACE Initiative was implemented by the EEOC subsequent to the action complained of by Ms. Westbrooks and was not demonstrated to be federal law, rule, or regulation; and was, therefore, not shown to have the force or impact of law. The E-RACE Initiative is not applicable to the instant case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that the City of North Miami did not commit a discriminating employment practice against Laura A. Westbrooks in violation of the Florida Civil Rights Act of 1992, as amended, by failing to hire her for an accounting position. DONE AND ENTERED this 1st day of September, 2009, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of September, 2009.
