Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: Petitioner sat for the certification examination for general contractors administered by the State of Florida in February, 1990. The examination consisted of two parts: GC121 and GC221. GC221 was comprised of 40 questions. Candidates were given four and one half hours to answer these 40 questions. This was an ample amount of time in which to complete the examination. Before the examination, candidates were given a list of reference materials and advised that the questions on the test would be taken from these sources. They were further advised that they would be permitted to bring these listed reference materials to the testing site and to use them in attempting to answer the examination questions. One of the reference materials listed was the "Builder's Guide to Accounting" by Michael Thomset. The "Builder's Guide to Accounting" has a section devoted to the subject of preparing a cash budget. The first three paragraphs of this section read as follows: A cash budget must reflect business realities, since you use it to chart the future course of your operation. If you have never used a budget before, start by estimating your immediate future cash income. Figure out as closely as possible the amount of incoming cash for the next month. Once you know this you can time your own expenses to the availability of these funds. Most businesses have had to budget this way out of necessity at one time or another. But effective cash budgeting does more than allow you to pay your bills. It puts you on a controlled course of financial action designed to achieve long-range goals. There are two principal methods of preparing a cash budget or forecast: the cash movement method and the source and application of funds method. Although there are other forecasting procedures, these two are commonly used because they are easy to prepare and at least as informative as any other method. The cash movement method involves budgeting only the flow of actual cash in and out of your business. Do not list additions to accounts receivable, as no cash changes hands in charge sales. And do not include liabilities. But make an estimate of payments on account. Estimate payments on account over several months, taking the amount of your charge sales from your total income budget. Budget taxes and loan payments as they become payable. This method is especially valuable for builders who have wide variations in their business volume from month to month. Such variations usually follow a predictable course. Building volume is affected by the seasons, zoning and political actions in your community, unusual weather patterns, the rate of community growth, and varying demands for the different types of work you do. Budgeting by the cash method allows you to handle directly cash flow changes that occur because of monthly volume variations. Figure 14-2 shows the form this budget should take. List each type of expected cash receipt and payment. This assures you that funds will be available to pay normal monthly expenses. Carry forward the amount at the end of the period on the last line to the beginning of the next period on the top line of the next column. Include in the cash budget the cost of any fixed assets you acquire, such as the $10,900 under Capital Assets. GC221-#21, the lone question in dispute in the instant case, is a multiple choice question that was drawn from the foregoing excerpt from the "Builder's Guide to Accounting." It is clear from a reading of that portion of the "Builder's Guide to Accounting" excerpted above that the only correct answer to GC221-#21 is (A). Petitioner chose another answer. Accordingly, he did not receive any credit for this question. Petitioner received a grade of 68.50 on GC221, .51 points shy of the grade that he needed to pass this part of the certification examination.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Construction Industry Licensing Board reject Petitioner's challenge to the failing score he received on the February, 1990, certification examination for general contractors. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of September, 1990. STUART M. LERNER 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 25th day of September, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-4164 The following are the Hearing Officer's specific rulings on the findings of fact proposed by Respondent: 1. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. 2-4. Rejected because they are more in the nature of statements of the case than findings of fact. 5. First sentence: Rejected because it is more in the nature of a statement of the case than a finding of fact; Second, fourth and fifth sentences: Accepted and incorporated in substance; Third sentence: Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony; Sixth and seventh sentences: Rejected because they constitute argument concerning the adequacy of Petitioner's proof rather than findings of fact. COPIES FURNISHED: Alan L. Arons, Esquire 1761 West Hillsboro Boulevard Suite 409 Deerfield Beach, Florida 33442-1502 Vytas J. Urba, Esquire Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0750 Fred Seely, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact Petitioner, Wood-Hopkins Contracting Company, is a general contractor specializing in heavy industrial and water-related construction activities. Its principal offices are located at 1901 Hill Street, Jacksonville, Florida. On February 8, 1982, Petitioner filed an application for a certificate of qualification with Respondent, Department of Transportation. A certificate of qualification is necessary in order for any person or firm to bid on road and bridge work to be let by the Department. The application included, inter alia, financial statements for the forty weeks ending October 3, 1981. The statements were prepared by Coopers and Lybrand, an independent accounting firm. On February 10, 1982, Respondent advised Petitioner by certified mail that its application was being denied on the ground "[t]he financial statements submitted (were) of a date of more than 120 days prior to the application." The letter of denial precipitated the instant proceeding. Petitioner is currently qualified to bid on construction projects to be let by the Department. However, its certificate of qualification expires on March 27, 1982. It is also qualified to bid on contracts let by the Department of General Services and the University System for the State of Florida. Prior to 1981, Petitioner's fiscal year-end was the Saturday nearest December 31 of each year. Therefore, its financial statements for 1980 were based upon the fifty-two weeks ended December 28, 1980. Sometime during 1981, Petitioner's parent company, Rowe Corporation, changed the fiscal year-end to the Saturday nearest September 30 of each year. Consequently, its most recent financial statements under the new fiscal year were based upon the forty weeks ended October 3, 1981. Department rules and applicable statutory provisions require that financial statements submitted with an application reflect the financial position of the applicant as of a date not more than one hundred twenty days prior to the date of filing of the application. Petitioner's financial statements preceded the date of filing by one hundred twenty-eight days, or eight days more than the law allows. Petitioner contends that it has been qualified to bid for a number of years, and its financial position has not materially changed even though its statements are more than four months old. It argues that the application of the rule in this case is arbitrary given the fact that it was only eight days late in filing its statements, and that the denial of its right to bid is harsh treatment for such a minor violation of the rule. Respondent processes approximately five hundred applications for certificates of qualification each year. Many of these are not timely filed, thereby prompting requests for waiver of the rule. However, it has a uniform policy of not waiving the rule in any cases, and to require strict compliance with the rule.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner's application for a certificate of qualification be DENIED. DONE and ENTERED this 24th day of March, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1982.
The Issue Whether the Department of Revenue's tax assessment against Petitioner, Christopher McQuade, d/b/a Stage One Computer Systems, issued on September 26, 2000, should be sustained.
Findings Of Fact Petitioner, Christopher McQuade, was owner of a business named Stage One. That company was registered with the Department of Revenue (Department) on November 5, 1993, and was issued tax certificate number 61-09-037987-32/9. Stage One was engaged in the business of selling computers. At all times relevant to the proceeding, Christopher McQuade, d/b/a Stage One Computer Systems, operated an internet service and sold computers and related products. This company was registered with the Department on August 1, 1996, and was issued tax certificate number 61-00-044138-32/3. The Department is the executive agency of the State of Florida charged with the administration and enforcement of Florida’s sales and use tax laws, pursuant to Section 20.21, Florida Statutes. On or about June 8, 1999, the Department notified Petitioner it would conduct an audit of Stage One Computer Systems for the period May 1, 1994 through April 30, 1999. The audit period was later extended to August 31, 1999 (audit period). The Notice of the Intent to Audit Books and Records indicated that the audit would take place at a mutually agreed date, but not before August 6, 1999, and further instructed Petitioner to make specified records available for the Department’s review. The specific records that the Department requested Petitioner to produce for review under the audit were identified in the Notice, Form DR890. Those records included the following records pertinent to Stage One Computer Systems: federal income tax returns; Florida sales and use tax returns; depreciation schedules; general ledgers, cash receipt journals; sales journal; sales invoices; shipping documents; purchase invoices; tax exempt certificates; lease agreements; and documents relating to commissions and/or secondary sellers. As of December 23, 1999, more than six months after Petitioner was notified of the Department’s intent to conduct an audit of Stage One Computer Systems, he had not completely or substantially complied with the Department's request for records. The only documents Petitioner provided to the Department were three Stage One Computer Systems bank statements from January, February, and March 1999, a list of internet subscribers, their e-mail addresses, and prices. The spreadsheet containing this information did not include the services that the customers received or the length of time the named individuals had been Petitioner’s internet customers. The bank statements provided by Petitioner were for the Stage One Computer Systems account. However, Petitioner told Ms. Hoch that in addition to funds for the business, he also deposited his paycheck from his full-time but unrelated job into the Stage One Computer Systems bank account. Despite this assertion, Petitioner provided no documentation that established or distinguished what portion of the funds in the Stage One Computer Systems account were attributable to the business versus Petitioner’s salary from his full-time job. Petitioner's failure to provide the relevant and requested records made it impossible for the Department’s auditor to verify, identify, or segregate that portion of the business revenue derived from the internet access fees and that portion derived from the sale of tangible personal property. Accordingly, the auditor determined that the deposits into the Stage One Computer Systems' bank account represented sales of tangible personal property by the company. The auditor, Marie Hoch, made several attempts to meet with Petitioner but was unsuccessful in doing so. One such meeting was scheduled for January 24, 2000, but was canceled after Petitioner advised Ms. Hoch that he was ill and could not meet with her that day. Petitioner never met with Ms. Hoch and advised the Department that it could not conduct the audit at his home, the business location, in New Port Richey because he was employed full-time in Tampa and was not there during regular business hours. Petitioner acknowledged that through Stage One Computer Systems, he ran an internet service and sold computers on a part-time basis. Nonetheless, Petitioner failed to provide invoices or other documentation to establish the company's sales transactions during the audit period. In telephone conversations with Ms. Hoch, during the audit process, Petitioner stated that at the end of each month he destroyed the invoices, and that any information related to sales that was on his computer could not be retrieved because his computer had crashed. On Petitioner’s monthly state sales tax returns, Form DR15, he declared that all the sales of Stage One Computer Systems were tax exempt. The basis of this declaration was Petitioner’s assertion that providing individuals with internet access is a tax exempt service. However, Petitioner did not provide back-up documents to support the declared exemptions. To receive credit for exempt sales, Petitioner would have had to provide the Department with documentation such as sales invoices showing the name of the customer and the item sold, shipping documents which would have shown where the goods were sent, or resale or exemption certificates. For example, if a shipping document showed that certain tangible personal property sold by Petitioner was shipped out of state, that property would be exempt from sales tax. Likewise, a re- sale certificate or exemption certificate from Petitioner’s customers would establish that the tangible personal property was exempt from sales tax. In absence of any documentation to support Petitioner’s assertion that his sales were tax exempt, the Department treated the sales reported on the Form DR15 for Stage One Computer Systems as taxable. To determine Petitioner’s tax liability for the audit period, Ms. Hoch looked at funds deposited into the Stage One Computer Systems' bank account in January, February, and March 1999 and the gross sales reported in Petitioner’s tax returns filed by Petitioner for those same months. To calculate the underreported sales, Ms. Hoch subtracted the sales amount reported on the tax return from the total amount deposited into the company’s bank account for the corresponding months. Based on this calculation, Ms. Hoch determined the difference between the reported sales and what appeared to be the unreported sales of the company. In the months of January, February, and March 1999, Petitioner filed the state sales tax return or DR15 with the Department. On those forms, Petitioner claimed that Stage One Computer Systems had gross sales of $1,350.00 in January 1999, $0 in February 1999, and $1,243.15 in March 1999. Petitioner declared that the reported gross sales were tax exempt, but provided no documentation to support that declaration. The three bank statements of Stage one Computer Systems reflected one deposit of $4,542.58 in January 1999; four deposits/credits totaling $16,472.05 in February 1999; and six deposits totaling $7,112.11 in March 1999. There were significant discrepancies between the deposits into Stage One Computer Systems' bank account and the gross sales of the company, as reported on the Form DR15. Since Petitioner provided no documentation to the Department to verify or explain the source of these deposits, Ms. Hoch determined that the deposits into Stage One Computer Systems’ bank account were for sales of tangible personal property. To determine the underreported sales, Ms. Hoch calculated the difference between the reported gross sales for January, February, and March 1999 and the funds deposited into the Stage One Computer Systems' bank account for those months. This amount was considered the “taxable difference.” Utilizing the Department's records and limited information provided by Petitioner, the Department determined that for the audit period, Petitioner should be assessed $12,655.95 in taxes, $6,152.05 in penalties, and $2,428.68 in interest, through October 7, 1999. The Department notified Petitioner of this proposed assessment in a Notice of Intent to Make Audit Changes, dated October 7, 1999. After October 7, 1999, based on additional information obtained by the Department and its communications with Petitioner, the Department revised its audit of Petitioner. Rene Seda, an auditor assigned to Petitioner’s case after Ms. Hoch left the Department, revealed that Petitioner, Christopher McQuade, also had an inactive sales account registered in the name of Stage One. In a telephone conversation, Christopher McQuade told Mr. Seda that he had sold tangible personal property under the sales tax account number 61-09-037987-32/9. That number was assigned to Stage One, a company which was owned by Christopher McQuade and registered with the Department in November 1993. According to Petitioner, the Stage One account was closed and replaced by the current account number, 61-00- 044138-32/3, registered to Stage One Computer Systems. The assessment reflected on the October 7, 1999, Notice of Intent to Make Audit Changes covered the taxes owed for the period from November 1996, at or near the time Stage One Computer Systems registered with the Department, to August 1999, the end of the audit period. After Mr. Seda learned that Christopher McQuade had a previously active account under the name Stage One, the Department calculated the estimated taxes for the company’s unreported gross sales of tangible personal property for the period May 1994, at or near the time the company was registered with the Department, through October 1996, when that company was no longer active and its activities were assumed by Stage One Computer Systems. Again, Petitioner failed to provide any documentation to indicate the amount of gross sales that were made by Stage One during the audit period or any other time that it was an active company. In absence of such documentation, Mr. Seda averaged the monthly sales taxes owed by Stage One Computer Systems for the period November 1996 through August 1999, the end of the audit period. Based on this calculation, the estimated average tax owed by Petitioner for each month between May 1994 through October 1996, except for August 1996, was $372.23. The Department records indicate that Petitioner made a tax payment in August 1996, which off- set his tax assessment for that month, reducing his taxes assessment for August 1996 to $20.00. During the audit process, Petitioner told Mr. Seda that Stage One Computer Systems had three servers which were used for the company's business operations, a file server, a web server, and an e-mail server. Based on this information, Mr. Seda determined that the three servers were fixed assets of the business. Subsequently, Petitioner indicated that he did not own the servers. However, Petitioner failed to provide the Department with any documentation to support his claim that someone other than Stage One Computer Systems or Christopher McQuade owned the servers. Using the best information available to him, Mr. Seda estimated the total cost of the three servers to be $15,000.00, or $5,000.00 each. Mr. Seda assumed the servers were purchased at the beginning of the audit period and scheduled the three servers in the first month of the audit period. Based on these estimates and assumptions regarding the three servers used by Stage One Computer Systems in its business operations, the Department assessed Petitioner $900.00 in taxes for those fixed assets. Based on the Department’s review of Petitioner's company, Stage One, on May 30, 2000, the Department issued a second Notice of Intent to Make Audit Changes, which revised totals for tax, penalty, and interest. On September 26, 2000, after the audit process had concluded, the Department issued a Notice of Proposed Assessment and Addendum of Proposed Assessment to Petitioner. The notice and addendum thereto properly assessed Petitioner tax of $24,370.62, penalty of $12,185.43, and interest, through September 26, 2000, of $11,194.81.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered upholding the Department of Revenue’s assessment against Petitioner in full, including all taxes, penalties, and interest for the audit period May 1, 1994 through August 31, 2000. DONE AND ENTERED this 2nd day of August, 2001, in Tallahassee, Leon County, Florida. ___________________________________ CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 230 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 2nd day of August 2001. COPIES FURNISHED: Christopher McQuade Stage One Computer Systems Post Office Box 1712 Elfers, Florida 34680-1712 John Mika, Esquire Department of Legal Affairs The Capitol, PL-01 Tallahassee, Florida 32399-1050 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue in this case is whether Petitioner's application for self-insurance for workers' compensation should be approved.
Findings Of Fact Based upon the observation of the witnesses' testimony and the documentary evidence received into evidence, the following relevant and material facts that follow are determined. The Florida Self-Insurers Guaranty Association, Inc. (Association), is established by Section 440.385, Florida Statutes (2003), and is an organization that provides a guarantee for workers' compensation benefits for companies that are self-insured. The Association pays injured workers their benefits, if the self-insurer becomes insolvent. An insolvency fund is established and managed by the Association, which funds the workers' compensation benefits for insolvent members. The insolvency fund is funded by assessments from members of the Association. Pursuant to Florida Administrative Code Rule 69L-5.102 (formerly Florida Administrative Code Rule 4L-5.102), in order for an employer to qualify for self-insurance under the relevant provisions of law, the applicant must meet the following requirements: (1) have and maintain a minimum net worth of $1,000,000; (2) have at least three years of financial statements or summaries; (3) if the name of the business has changed in the last three years, provide a copy of the Amended Articles of Incorporation; and (4) have the financial strength to ensure the payment of current and estimated future compensation claims when due, as determined through review of their financial statement or summary by the Department. Of the general requirements noted in paragraph 3, above, the only issue in this proceeding regards N.C.M.'s financial strength. An applicant for self-insurance is required to submit in its application audited financial statements for its three most recent years. All financial statements, audits, and other financial information must be prepared in accordance with Generally Accepted Accounting Principles. The Association is required to review each application and the financial documents which are submitted as part of that application to determine if the applicant has the financial strength to ensure the timely payment of all current and future workers' compensation claims. After the Association reviews the application, it makes a recommendation to the Department as to whether the application for self-insurance should be approved or denied. The Department is required by law to accept the Association's recommendations unless it finds that the recommendations are clearly and convincingly erroneous. N.C.M. submitted its application for self-insurance on or about May 6, 2003, and included in its application audited financial statements for its three most recent fiscal years. The statement contained an unqualified opinion from N.C.M.'s accountant. N.C.M. provided information in its application regarding the number of employees, the worker classifications of these employees, and a payroll classification rating that has been established by the National Council on Compensation Insurance. The application made it clear that the Department could use this information to calculate a manual annual rate premium for each worker classification to determine an overall workers' compensation premium based on statewide manual rates. The Association calculated a standard premium of $507,088.75 for N.C.M., after giving credit for its experience modification of .71. N.C.M. confirmed in its application that it was a corporation duly organized and existing in the State of Florida. N.C.M. also supplied information on its corporate officers and copies of its Articles of Incorporation confirming its corporate existence. In its application and at the hearing, N.C.M. agreed that, if accepted for membership, it will maintain security deposits and excess insurance as required by the Department's administrative rules. Upon receipt of N.C.M.'s application, the Association thoroughly reviewed the application and financial statements for the three most recent years. The Association examined the balance sheets to analyze the Company's assets, liabilities, working capital, and equity structure. Additionally, the Association examined N.C.M.'s income statements to analyze the Company's revenues, profits and/or losses, and expenses. The Company's cash flows were examined. The Association calculated various financial ratios for N.C.M. in order to examine, among other things, the company's asset structure, liquidity, total debt to equity structure, and net income or loss as it relates to the company's equity. The analysis and review performed by the Association, as described in paragraph 12, is the same type of analysis the Association performs on every applicant for self-insurance. Because applicants for self-insurance come from various types of industries, it is not useful to establish specific threshold values for various financial ratios in determining financial strength. However, the Association reviews and analyzes the financial statements of each applicant to determine the financial condition of that applicant. The Association's review of N.C.M.'s audited financial statements revealed that the Company had a net loss of $60,937 in the year ending December 31, 2002. The Company also had a loss from operations in its most recent year in the amount of $74,897, or negative .62 of its revenues. This was a significant factor to the Association because it revealed N.C.M.'s lack of profitability for its most recent year. Petitioner's tax return of 2002 showed a profit for the Company. However, the tax returns are not meant to reflect the economic profit of a business and are not prepared in accordance with Generally Accepted Accounting Principles. Rather, the audited financial statements provide more accurate information about the Company’s financial health. N.C.M.'s 2002 net worth was $1,218,895, which exceeded the $1,000,000 minimum net worth requirement established in the applicable rule cited in paragraph 3 above. However, the Association was concerned about N.C.M.'s net worth when taken as a percentage of its workers' compensation premiums, calculated by using the payroll classification information in N.C.M.'s application. The analysis of N.C.M.'s net worth as a percentage of workers' compensation premiums is important because workers' compensation claims can accrue each year and be paid out over a long period of time by the self-insurer. A company with equity that is relatively low in comparison to its workers' compensation exposure might, over time, owe its injured workers as much as, or more than, the equity in the company. This would increase the risk for the injured worker. Upon completing its financial analysis, the Association recommended that N.C.M.'s application for self- insurance be denied. Brian Gee, the executive director of the Association, conveyed the recommendation of denial to the Department in two letters, one dated May 12, 2003, and the other one dated June 19, 2003. The letters were virtually identical, except that the June 19, 2003, letter referred to the specific statute at issue and statutory language that N.C.M. did not have the financial strength necessary to ensure timely payment of all current and future claims. Attached to both the May 12, 2003, and June 19, 2003, letters was a copy of the Association's summary of N.C.M.'s audited financial statements for the years ended December 31, 2002, 2001, and 2000. Based on the review of the financial data, the Association made the following four findings, which it listed in both letters: The Company received unqualified audit opinions on its December 31, 2002, 2001, and 2000 financial statements from Rust & Christopher, P.A. Liquidity - The current ratio has decreased from 1.34 at December 31, 2000 to 1.13 at December 31, 2002. Capital Structure - The total liabilities to book equity ratio has increased since December 31, 2000 from 1.39 to 1.99 at December 31, 2002. Results of Operations - The Company's gross profit margin has negative 0.62 for the year ended December 31, 2002. The Company reported a net loss of $60,937 for the year ended December 31, 2002. Although the above-referenced letters listed findings relative to the Company's liquidity and capital structure, Mr. Gee did not believe that those findings were of "major significance." The Association's letters and accompanying financial data were submitted to the Department for a final decision to be made by the Department. The Department received and reviewed the Association's letters of recommendation and the accompanying documentation. Based on its review of the letter, the Department noted that the Association appeared to have concerns about the Company's liquidity, liabilities, and profitability. However, there was nothing in the letters which indicated that the Association did not consider the findings related to the Company's liquidity and liabilities (capital structure) to be of major significance. The Department sent N.C.M.'s application, which included the financial statements, to an outside CPA firm for review. The outside CPA performed a financial analysis, calculated various financial ratios on N.C.M., and provided a report to the Department. The outside CPA correctly noted in her report that N.C.M.'s gross profit margin for the year ended December 31, 2002, was 15.4 percent. In Finding No. 4 of its letters of recommendation to the Department, the Association had mistakenly mislabeled the Company's net profit margin as the gross profit margin. As a result of that mislabeling in the letters, the finding incorrectly stated that N.C.M.'s gross profit margin was a negative 0.62 percent for the year ending December 31, 2002. In fact, it was the Company's net profit margin for the year ending December 31, 2001, that was negative 0.62 percent. Notwithstanding the incorrect mislabeling of this item in the letters, the financial summary attached to the letters accurately reflected the Company's gross profits and revenue. The financial statement of N.C.M. also reflected that for the year ending 2002, the Company had a gross profit of $1,877,076, and for that same period had a loss from operations of $74,897, or negative .62 percent. The outside CPA also compared various financial information on N.C.M. to an industry average and concluded that "some of the Company's ratios are below the industry ratios." In making these comparisons, the outside CPA researched two companies she believed were in a business similar to N.C.M. The research on these companies provided an industry average for various financial information on companies in the same industry as the two reference companies. In this case, the two reference companies were primarily producers or sellers of concrete products, as opposed to construction companies like N.C.M. Accordingly, the industry ratios contained in the outside CPA's report may be different than the construction industry and not an appropriate basis with which to compare N.C.M. The report of the outside CPA stated that N.C.M. pays approximately $1,000,000 a year in workers' compensation insurance. That figure is higher than the premiums calculated by the Association using statewide manual rates. Instead of using those rates, the outside CPA based her figure on a newspaper article, which stated that Mr. DelDuca, president of N.C.M., pays $1,000,000 for workers' compensation insurance. In her report, the outside CPA cited N.C.M.'s lack of profitability for the year ending 2002 and correctly noted that for that year, the Company reported a net loss of $60,937. The outside CPA notified the Department that she concurred with the Association's recommendation to deny N.C.M.'s application to become self-insured because the Company had not demonstrated it has the financial strength to ensure timely payment of workers' compensation claims. The Department reviewed the outside CPA's report and noted the concerns about the company's debt equity and lack of profitability. Based on the outside CPA's report, the Department correctly determined that the report contained no information that the Association's recommendation was clearly and convincingly erroneous. As a result of its determination that the Association's recommendation to deny N.C.M.'s application for self-insurance was not clearly or convincingly erroneous, the Department denied the application.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order denying N.C.M. of Collier County, Inc.'s application for self-insurance. DONE AND ENTERED this 26th day of February, 2004, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 26th day of February, 2004. COPIES FURNISHED: John M. Alford, Esquire 542 East Park Avenue Tallahassee, Florida 32301 Cynthia A. Shaw, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Mark B. Cohn, Esquire McCarthy, Lebit, Crystal & Liffman Co., L.P.A. 1800 Midland Building 101 West Prospect Avenue Cleveland, Ohio 44115-1088 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Should Petitioner's application for registration as an associated person be approved?
Findings Of Fact From April, 1985 to August 1986, Petitioner was employed as a registered associated person of Dean Witter Reynolds in Tallahassee, Florida. The Reebok Trade On March 11, 1986, Petitioner was instructed by one of his customers to sell 200 shares of stock in Reebok International, Ltd. (Reebok). By mistake, Petitioner executed an order to sell 500 shares of Reebok on behalf of the client. On March 17, 1986, the client came to Petitioner's office and while reviewing the client's account, Petitioner discovered the error he had made on March 11, 1986. Petitioner told his supervisor, Mr. Brock, of the mistake. The supervisor told Petitioner that he should "bust" the trade. This meant reversing the transaction and purchasing 300 shares of Reebok. It is Dean Witter's policy that whenever an error is discovered, it should be covered immediately. Petitioner, however, did not cover the error. From March 11, 1986 to March 17, 1986, the price of Reebok stock had increased. Petitioner decided to wait and see if the price would come down. Sometime after March 17, 1986, Mr. Brock left the firm and a new supervisor, Mr. Cavelle, took his place. On April 30, 1986, Mr. Cavelle noticed the Reebok error in the error account and executed an order to cover the error by purchasing 300 shares of Reebok stock. From March 11, 1986 to April 30, 1986, the price of Reebok stock increased substantially, and the error in the Reebok trade resulted in a loss of $9,225.00 to Petitioner's client. The client was reimbursed by Dean Witter. Petitioner received a written reprimand from Dean Witter and agreed to pay Dean Witter the amount of the loss. While Petitioner remained employed with Dean Witter, $400.00 were deducted from his monthly pay check to pay off the loss. After Petitioner was fired from Dean Witter in early August, 1986, he has only been able to make sporadic payments, totalling approximately $600.00 to $700.00. The Corpen One Transactions Sometime in May, 1986, while Petitioner was still employed at Dean Witter, Petitioner and John Collins formed Corpen One, Inc. (Corpen). The corporation was formed to run a hot dog vending cart operation in Tallahassee, Florida. John Collins was named president and Petitioner was the secretary and treasurer responsible for handling the corporation's finances. In order to raise capital for the corporation, Petitioner found three other persons willing to invest in the corporation. Curtis Davis, J.B. Durham and Jeff Burkett each invested approximately $4,000.00, in return for part ownership of the corporation. With the unused cash which the corporation had, Petitioner opened a bank account with Barnett Bank. From May 15, 1986, to July 17, 1986, Petitioner, without the knowledge of other stockholders, wrote checks to himself from the corporate bank account totalling $3,500.00. The dates and amounts of each check were: May 15, $800; May 19, $1,200; May 27, $800; June 26, $100; July 17, $600. These amounts were used by Petitioner for personal expenses. He treated them as loans from the corporation. Eventually, he repaid the loans with interest equal to what would have been earned had the money been invested in a Dean Witter money market account. Sometime in early July, 1986, Petitioner determined that it would be a good idea to open up a Dean Witter money market account for the funds which the corporation had in the bank account. On July 9, 1986, Petitioner, in his capacity as a Dean Witter employee, assigned a Dean Witter new account number, number 531015757, to the corporation. He did this by personally writing the name Corpen One, Inc. in the Dean Witter "New Account Number Assignment" log. This procedure was contrary to Dean Witter's policy which required that the new accounts clerk assign the new account number. In the clerk's absence, a person other than a broker or salesperson should assign the number. When Petitioner returned to his desk to complete the paperwork necessary to open a new account, he discovered that he needed to have a Federal Tax Identification Number for Corpen in order to open the account. Since Corpen did not yet have such a number, Petitioner never opened the account. During the period of time he borrowed money from the corporation, Petitioner filled out Dean Witter receipts which showed Dean Witter as having received $3,300 from Corpen to be invested in a money market account. The dates and amounts of the receipts were: May 15, $800; May 19, $1,200; May 27, $800; July 17, $500. The receipts were filled out completely and included the account number which Petitioner had assigned to Corpen One for the account which was never opened. Sometime in July or early August, 1986, Mr. Durham and other shareholders of Corpen became concerned with the operation of the corporation. Sales were not as high as expected and the corporation was not doing well. Also, Petitioner wanted to be relieved of his duties, because the time needed to run Corpen was interfering with his duties at Dean Witter. The more Mr. Durham checked into the operation of the corporation, he became convinced that improprieties were taking place. After several meetings took place, Petitioner handed over to Mr. Durham the corporate records in his position. These records included the cancelled checks Petitioner had written to himself and the Dean Witter receipts. When Mr. Durham saw the Dean Witter receipts, he asked Petitioner about them. When he did not receive a satisfactory answer, he took the receipts to Dean Witter and met with Mr. Cavelle, the branch manager. Mr. Cavelle tried to look the account up on his computer and discovered there was no account. He then checked the new account log book and discovered that Petitioner had personally assigned the account number. When Mr. Cavelle asked Petitioner to explain what had happened, he received what he considered a "hazy" explanation, and fired Mr. Hicks. Mr. Cavelle's main concern was that the receipts made Dean Witter potentially liable for the amounts shown in each receipt. After being fired, Petitioner was unemployed for four to five months. From February, 1987 to May 1988, Petitioner worked for Corporate Risk Management, a company managing self-insurance funds for employees. Petitioner is now the manager of the Melting Pot restaurant in Panama City Beach, Florida. For 1987, Petitioner earned approximately $13,000. His current salary is $1,200 per month.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order denying Petitioner's application for registration as an associated person. DONE and ORDERED this 19th day of January, 1989, in Tallahasee, Florida. JOSE A. DIEZ-ARGUELLES Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of January, 1989. APPENDIX The parties submitted proposed findings of fact which are addressed below. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact Proposed Finding Ruling and RO Paragraph of Fact Number Second sentence accepted. Rest of paragraph is rejected as irrelevant or argument. Rejected as irrelevant. First three sentences rejected as argument. Fourth and fifth sentences accepted. Supported by the evidence but unnecessary to the decision reached. The implication in the first sentence that the delay was someone else's fault or that the stock market is to blame is rejected. Petitioner has only himself to blame for the delay. Third sentence is rejected as argument. Fourth sentence accepted. Last three unnumbered paragraphs are argument Respondent's Proposed Findings of Fact Proposed Finding Ruling and RO Paragraph of Fact Number Not a finding of fact. Accepted. See Background section of RO. 3.-4. Not a finding of fact. See Background section of this RO. Accepted. See Background. Not a finding of fact. See Background. Accepted RO1. Accepted RO12. Rejected as recitation of testimony. Also, as to the first sentence, Mr. Durham's testimony on direct was weakened by the cross- examination where his memory of events was tested. As to the second, third and fourth sentences, Mr. Hicks executed the receipts, and borrowed money from Corpen One. However, the evidence fails to establish that Mr. Hicks "converted" to his own use money which was to be invested in the money market account. Rejected as recitation of testimony. But see RO18. Accepted. RO20, 21. Rejected as not supported by the evidence. Rejected as recitation of testimony. Rejected as recitation of testimony except fourth and ninth sentences. ,16.,17. Rejected as not a finding of fact. Rejected as irrelevant. Accepted. RO2.-4. Rejected as recitation of testimony. But see RO6. ,22. Rejected as recitation of testimony. But see RO5.-10. 23. Rejected not as a finding of fact. 24.-28. Rejected as recitation of testimony. COPIES FURNISHED: John D. Hicks 3918-A Raven Street Panama City, Florida 32312 Reginald R. Garcia, Esquire Assistant General Counsel Department of Banking and Finance The Capitol, Suite 1302 Tallahassee, Florida 32399-1302 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350 =================================================================
The Issue The issues in this case are whether Petitioner, Gary P. Santoro (“Petitioner” or “Mr. Santoro”), undeservedly received a failed grade on the Construction Business and Finance Examination (“Examination”) for licensure as an air-conditioning contractor; whether any questions on the examination had more than one correct answer; whether the examination is unfair; whether there is transparency in the examination review process; and whether the examination grading process is arbitrary and capricious.
Findings Of Fact Mr. Santoro took the Examination on November 16, 2018. Petitioner failed the Examination because he scored less than 70 percent correct. The Examination contains 125 questions, 120 of which are scored. The other five are not scored and are considered “pilot” questions for potential use on future examinations. In order to pass the Examination, a candidate must obtain a score of at least 70 percent. All scored questions on the Examination are weighted equally. As a result of failing to pass the Examination, Petitioner was notified of his results. All questions on the Examination had a single correct answer. Cynthia Woodley, Ph.D., employed by Professional Testing, Inc. (“PTI”), as the chief operating officer, is an expert in psychometrics and exam development. She holds a master’s degree in vocational education and a doctorate in curriculum and instruction with a specialization in measurement. Her current position calls for her to manage a number of licensure and certification exam programs. She explained at length how specific questions become part of a professional licensure exam. To develop questions, her company brings in any number of subject matter experts, people actually employed in the professions being tested, and they help develop subject matter questions for a particular exam. That was the process used for development of the Examination in this matter. Once the subject matter experts are trained in exam question writing techniques, they write questions, which are reviewed by other subject matter experts to determine whether the questions are fair and understandable enough to be answered by prospective test takers. Generally, five subject matter experts review each question before it makes its way onto an exam. PTI measures the “P value” of the questions by determining what percent of individuals taking a given exam answer a particular question correctly. For example, a P value of .90 means that 90 percent of the people taking the exam answered a particular question correctly. PTI looks for a wide range of P values in its exam questions. If a P value is too low, say .40, the company might reexamine that question to determine whether it should be removed from future exams since fewer than half the people taking the exam answered it correctly. The business and finance portion of the exam is given to all contractors, regardless of their specialty, with the exception of pool service contractors. Here, Petitioner, a HVAC contractor was administered the same Examination as plumbing contractors, electrical contractors, general contractors, etc. Each of the 120 questions on the exam in this case was equally weighted. There were also five pilot questions inserted into the exam, which did not count towards the total score, but were included as test questions for future exams. Petitioner provided hearsay documents regarding computer hacking and computer glitches associated with some exams administered around the United States. However, he did not connect the articles submitted into evidence to the exam administered in this case or any exam administered by the Department in Florida. Dr. Woodley was familiar with the allegations of computer glitches in testing, but testified that the problems were with K-12 testing in schools, not with professional licensure exams, such as administered by the Department. Therefore, since the hearsay evidence was not linked to the exam at issue or similar professional licensure exams given in Florida, it is entitled to no weight in arriving at the decision in this case. Question BF 1290 has a single correct answer, which is answer “C.” Petitioner selected answer “B.” Petitioner was unable to demonstrate that the answer he selected was correct. Question BF 0473 has a single correct answer, which is answer “A.” Petitioner selected answer “C.” This question asks for an answer of general applicability. Petitioner’s claim that his answer is equally correct is based on a narrow exception in law. Accordingly, Petitioner was not able to demonstrate that the answer he selected was correct. Question BF 0162 has a single correct answer, which is answer “B.” Petitioner selected answer “C.” Petitioner was unable to demonstrate that the answer he selected was correct. Question BF 1691 has a single correct answer, which is answer “C.” Petitioner selected answer “D.” Petitioner was unable to demonstrate that the answer he selected was correct. Petitioner was unable to submit sufficient evidence to show that the Examination is unfair, that there is insufficient transparency in the examination review process, or that the examination grading process is arbitrary and capricious. Accordingly, he cannot prevail in his challenge to the Examination. Petitioner testified that he took and passed the HVAC contractors special license examination on his first attempt. He has taken the Examination on numerous occasions and is yet to be successful. He testified he studied hard for every administration of the exam, but just cannot reach the finish line successfully. While that is unfortunate, the evidence does not support that his failure to succeed on the Examination is the fault of the exam itself or of the Department either in its contracting to have the exam created or in the administration of the exam. From the way he conducted himself at hearing, Petitioner appears to be an intelligent, diligent, and successful individual in his HVAC business. For some unknown reason he has been unable to successfully complete the Examination. His persistence in retaking the Examination multiple times is admirable and should ultimately pay off with his successful passage of the Examination.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Construction Industry Licensing Board enter a final order upholding the Department’s Amended Grade Report finding that Petitioner failed to achieve a passing score on the Construction Business and Finance Examination, which he took on November 16, 2018. DONE AND ENTERED this 23rd day of August, 2019, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 2019. COPIES FURNISHED: Thomas G. Thomas, Esquire Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed) Gary Peter Santoro Hometown Air & Services 8229 Blaikie Court Sarasota, Florida 34240-8323 (eServed) Ray Treadwell, General Counsel Office of the General Counsel Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed) Daniel Biggins, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399 (eServed) Halsey Beshears, Secretary Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed)
Conclusions This cause has come on for final agency action after the filing of a Notice of Voluntary Dismissal With Prejudice (Notice) by Suntree Pharmacy, inc. (Suntree) at the Division Of Administrative Hearings in Case No. 13-4637 on December 27, 2013 and that Division's entry of an Order Closing File And Relinquishing Jurisdiction (Order) on January 9, 2014. Having considered the Notice and the Order and the Order of Conditional Release From Stop Work Order (Release) and the Payment Agreement Schedule For Periodic Payment of Penalty (Payment Agreement) and associated documents (Attachment A hereto), IT IS HEREBY ORDERED that the Notice Of Assignment And Order issued herein on January 30, 2014 is hereby withdrawn as improvidently issued. IT IS HEREBY FURTHER ORDERED that the Order of Conditional Release From Stop Work Order and the Payment Agreement Schedule For Periodic Payment of Penalty are affirmed and remain in full force and effect until all terms and conditions thereof are satisfied. Should any term or condition therein be defaulted on by Suntree, the Release shall be immediately lifted and a bar against further work immediately re- ss igsyerneeminyeevnerttaneimm mee imposed and the Payment Agreement shall be accelerated and the full amount due thereunder shall become immediately due and payable. March THE DONE AND ORDERED this _@rel_day of February, 2014. Robert C. Kneip, Chief of Sta
The Issue The issues in this matter are whether Respondent violated section 112.313(6), Florida Statutes (2013),1/ by obtaining funds from Orange County in the form of a severance payment while remaining employed as General Counsel for the Orange County Clerk of Courts; and, if so, the appropriate penalty.
Findings Of Fact Respondent, Stephan Carter, served as General Counsel for the Orange County Clerk of Courts (the “Clerk’s Office”) from June 2003 through April 1, 2014. Respondent was a public employee at all times material to this action. Respondent was personally hired by Lydia Gardner, the Orange County Clerk of Courts. In January 2005, Respondent and Ms. Gardner executed an employment contract (the “Employment Agreement”). The Employment Agreement was signed by Respondent and Ms. Gardner, in her capacity as the Clerk of Courts, on January 10, 2005, and January 13, 2005, respectively. The Employment Agreement, paragraph 6, entitled “Termination of Employment,” established that the Clerk would pay Respondent a fee should the Clerk terminate the Employment Agreement prior to its expiration date (the “Severance Payment”). Paragraph 6 specifically provided: The Clerk may declare this agreement terminated at any time. . . . The Clerk shall promptly pay to the General Counsel a sum equal to i) the salary and deferred compensation that is accrued but unpaid as of the date of the termination, plus ii) an amount equal to the pro rata portion of his salary for all accrued but unused leave time, plus, iii) an amount equal to the salary and deferred compensation that the General Counsel would have received during the 180 days immediately following the date such termination takes effect, as if this agreement had not been terminated. At the final hearing, Respondent explained that when he accepted the position of General Counsel (then titled “Legal Counsel”) with the Clerk’s Office in June 2003, he informed Ms. Gardner that he would only agree to work for the Clerk’s Office if he could be protected from losing his position. Therefore, Respondent sought and obtained the Severance Payment provision should he be terminated for any reason other than his voluntary resignation. The Employment Agreement provided that Respondent’s term of employment continued until January 6, 2009. On January 7, 2009, Respondent and Ms. Gardner entered a signed agreement wherein the Employment Agreement was “extended indefinitely.” On February 5, 2013, Respondent and Ms. Gardner signed a second amendment to the Employment Agreement.2/ This “clarification of terms” stated: [A]s to the definition of termination in paragraph 6, for the purposes of the contract, termination by the Clerk includes the ending of the employment relationship for any reason other than General Counsel’s voluntary resignation. The amendment also provided that an $11,000 annual payment into Respondent’s deferred compensation plan contained in the original Employment Agreement be considered compensation under Florida Administrative Code Rule 60S-6.001(15)(relating to pensions) and not a fringe benefit. In February 2013, Ms. Gardner became gravely ill. Ms. Gardner’s illness caused her to be absent from the Clerk’s Office. In Ms. Gardner’s absence, Colleen Reilly, the Chief Administrative Officer for the Clerk’s Office, assumed Ms. Gardner’s responsibilities. Ms. Reilly was hired in 2009. At that time, Respondent prepared an employment contract for Ms. Reilly modelled on his own Employment Agreement. In April 2013, Ms. Reilly approached Respondent to talk about their future employment with the Clerk’s Office. Ms. Gardner’s health was deteriorating. Respondent and Ms. Reilly discussed the impact of Ms. Gardner’s death on their positions. Ms. Reilly was also concerned whether the new Clerk of Courts would honor their Employment Agreements. Respondent and Ms. Reilly’s conversation led to a discussion regarding how they could protect the Severance Payments under their respective Employment Agreements. Respondent and Ms. Reilly considered several possibilities. One position was that their Employment Agreements would remain in effect upon Ms. Gardner's death, and they could ask the new Clerk of Courts to honor the payout terms. Respondent, however, determined that the Employment Agreements were not clear on whether he and Ms. Reilly were entitled to the Severance Payments following a change of administration. Therefore, they became concerned whether the new Clerk of Courts would be legally bound to honor the Severance Payments should he or she decide not to retain their services. Respondent, without seeking legal guidance or consulting with outside counsel for the Clerk’s Office, concluded that the Employment Agreements would terminate upon Ms. Gardner’s death. At the final hearing, Respondent explained that he considered his employment to be tied specifically to Ms. Gardner and not the Clerk's Office. Therefore, Respondent reasoned that because both he and Ms. Reilly were hired by and worked directly for Ms. Gardner, her death would terminate their contracts. This termination, of course, would also entitle Respondent (and Ms. Reilly) to the Severance Payment because his employment would have ended for a reason other than his voluntary resignation. Respondent and Ms. Reilly also discussed their plans once their Employment Agreements were terminated. Respondent informed Ms. Reilly that he believed that after the Employment Agreement was terminated, they could continue to work for the Clerk’s Office as “at-will” employees without employment contracts. Respondent encouraged Ms. Reilly to take her Severance Payment then stay in her position with the Clerk’s Office. He intended to do the same. Late in April 2013, Ms. Reilly informed Respondent that she was planning to visit Ms. Gardner, who was on convalescent leave at her home, to ask her to formally terminate the Employment Agreements and make them at-will employees of the Clerk’s Office. Respondent encouraged Ms. Reilly’s endeavor. Respondent then drafted two versions of a memorandum Ms. Gardner could sign to effectuate the termination of their contracts. Ms. Gardner, however, did not agree to terminate the Employment Agreements or sign the paperwork Respondent had prepared. Consequently, the Employment Agreements remained in effect. When Ms. Reilly was not able to obtain Ms. Gardner’s consent to terminate the Employment Agreements, Respondent began to consider Ms. Reilly’s authority to terminate his Employment Agreement. Respondent determined that Ms. Reilly could terminate his contract under section 28.09, Florida Statutes, and they could still receive the Severance Payments. Section 28.09 describes the appointment of a clerk ad interim in the case of a vacancy occurring in the office of a clerk by death. Section 28.09 states that the clerk ad interim “shall assume all the responsibilities [and] perform all the duties” of the clerk. Therefore, because Ms. Reilly would assume all the powers of Ms. Gardner, she would be authorized the terminate his Employment Agreement. Ms. Gardner passed away on May 8, 2013. On May 9, 2013, Ms. Reilly was officially appointed as Clerk Ad Interim for the Clerk’s Office. Also on May 9, 2013, Respondent and Ms. Reilly immediately took steps to obtain their respective Severance Payments. To effectuate their plan, Ms. Reilly promptly terminated both their Employment Agreements using her newfound authority as the interim Clerk. Respondent hoped that this step would remove any questions of their entitlement to the Severance Payment that might be raised by the new Clerk of Courts. Respondent then went directly to the Clerk’s Payroll office. There, he approached Tracy Gasinski, the payroll administrator for the Clerk’s Office. Respondent informed her that Ms. Reilly had approved him to receive a payout. Respondent declared that his payout was authorized because his Employment Agreement was terminated. Respondent also instructed Ms. Gasinski to pay Ms. Reilly’s payout under her Employment Agreement. Respondent stressed that he wanted both payouts processed immediately. Finally, Respondent advised Ms. Gasinski that nobody needed to know about the payout. Ms. Gasinski felt pressured by Respondent. However, based on his representation that Ms. Reilly had approved the payout, she immediately processed a final paycheck for Respondent (and Ms. Reilly), which included the Severance Payment provided in his Employment Agreement. Ms. Gasinski calculated a payout for Respondent in the gross amount of $110,290.61. This figure included a Severance Payment of $76,844.00. In addition, per his request, Respondent was also paid $27,822.10 for all his unused vacation leave (405.57 hours times a rate of $68.60), as well as $5,624.51 for his unused sick leave (327.96 hours times a rate of $17.15). Ms. Gasinski paid 25 percent of Respondent’s sick leave per Clerk’s Office policy. The next day, on May 10, 2013, Ms. Gasinski issued Respondent a check in the amount of $58,400.00 which was deposited directly into Respondent's personal bank account. Ms. Gasinski also deposited a final paycheck into Ms. Reilly's bank account. On or about May 20, 2013, however, Respondent returned to see Ms. Gasinski. He was not happy with his payout. Respondent told Ms. Gasinski that the amount she deposited was incorrect, and he was due more money. Respondent demanded several adjustments which would maximize his Severance Payment. First, referencing the February 5, 2013, amendment to his Employment Agreement, Respondent wanted the $11,000 he received as deferred compensation to be incorporated into his base salary thereby increasing his rate of pay. Second, Ms. Gasinski, in calculating Respondent’s Severance Payment, computed the final payout based on six month’s salary in accordance with the standard practice of the Clerk's Office. Respondent, however, insisted that his Severance Payment be calculated based on “180 days” as specifically stated in his Employment Agreement at paragraph 6. This mathematical adjustment increased Respondent's payout by including payment for all Saturdays and Sundays.3/ Third, Respondent demanded that he receive 100 percent payout for his remaining sick leave instead of just 25 percent as was the Clerk’s Office policy. Fourth, Respondent requested that 56 hours (7 days) be reserved in his vacation leave account and not paid out.4/ Following their meeting, Ms. Gasinski voided the initial payout check. However, she was not comfortable with Respondent’s request based on her understanding of employment contracts. Respondent's and Ms. Reilly's transactions were out of the ordinary course of business for the Clerk's Office. In her experience, final paychecks to Clerk’s Office employees were always accompanied by paperwork from the Clerk’s Office’s Talent Management division. This paperwork came in the form of an Employee Change Notice (“ECN”). However, Respondent did not produce, nor had Ms. Gasinski received, an ECN supporting Respondent’s payout. In Clerk’s Office accounting practices, Talent Management and the Payroll office act as a check and balance for each other. Typically, Talent Management initiates the paperwork, and then Payroll issues the checks. The normal process for a payout when a Clerk's Office employee leaves employment is for Talent Management to notify Ms. Gasinski who then processes the final payout. Respondent did not have the authority to direct Ms. Gasinski to issue the checks. Similarly, Ms. Gasinski did not have the authority to write checks to either Respondent or Ms. Reilly. Furthermore, a final payout upon termination is always via a paper check. Direct deposit to a personal bank account is never an option. The terminated employee picks up the paper check from Talent Management who verifies that the employee's garage pass and badge have been returned. Because of her discomfort with issuing Respondent’s payout check, Ms. Gasinski sought advice from her supervisor, Mike Murphy, the Chief Financial Officer for the Clerk’s Office. Mr. Murphy suggested that Ms. Gasinski contact Talent Management. On May 21, 2013, Ms. Gasinski spoke to Joann Gammichia, the Director of Talent Management, about Respondent’s request for a payout. When Ms. Gammichia learned of the situation, she had immediate concerns. First, Ms. Gammichia wondered why Payroll was issuing a check without any documentation from Talent Management such as an ECN. Ms. Gammichia testified that each employment activity requires completion of an ECN which acts as a recordkeeping system for the Clerk's Office. Because Respondent approached Ms. Gasinski in the Payroll office directly, no ECN or other written record was generated explaining why the Clerk’s Office was issuing the payout to Respondent. Ms. Gammichia explained that the policy of the Clerk’s Office is that payouts, severance checks, termination, or any kind of position change should only occur with an ECN in order to maintain and track the complete history of an employee's tenure with the Clerk's office. Ms. Gammichia also wondered why Respondent went directly to Ms. Gasinski with his demands. The normal starting point for employee changes begins with Talent Management, and the end of the line is financial services and Payroll. The fact that Respondent was attempting to verbally change his employment status in the Payroll office was “highly irregular.” Ms. Gammichia was also puzzled why the Clerk’s Office was issuing a severance payout on an employment contract when the employment was not ending. Consequently, Ms. Gammichia told Ms. Gasinski not to issue the adjusted payout check. Ms. Gasinski then notified Respondent via e-mail dated May 21, 2013, that she could not process the final payout until she received the proper documentation from Ms. Gammichia in Talent Management. Shortly thereafter, Respondent visited Ms. Gammichia’s office to inquire why she was involved in his payout matter. According to Ms. Gammichia, Respondent became “pretty aggressive.” Respondent told Ms. Gammichia that she had no authority or business being involved. It was a personal matter. Respondent warned Ms. Gammichia that she was directly violating an order from Ms. Reilly to make the Severance Payments. Ms. Gammichia informed Respondent that not only was she involved, but she was not authorizing the payout check to go through. Ms. Gammichia further advised Respondent not to contact Ms. Gasinski regarding the payout. Later that day, Ms. Gammichia contacted her supervisor, Cathi Balboa, the Director of Administrative Services for the Clerk’s Office, to discuss Respondent’s payout request. Ms. Gammichia relayed to Ms. Balboa that Ms. Gasinski was upset because she was being asked to prepare a large payout based only on verbal instructions without any supporting paperwork. At the final hearing, Ms. Balboa recalled that Respondent’s urgent request for a payout was highly irregular. Ms. Balboa relayed that the Clerk’s Office should not issue a final payout unless an employee was truly terminated from his or her position. Based on their concerns, Ms. Gammichia and Ms. Balboa called Ms. Reilly, who was sick at home, to confirm whether Ms. Reilly was aware of the payouts that Respondent said she had authorized. Ms. Gammichia also wanted to report the fact that Ms. Gasinski felt that she was being coerced and harassed by Respondent. Ms. Gammichia described Ms. Reilly’s reaction as hostile and negative. Ms. Reilly did not seem happy that others were involved. Ms. Reilly asked Ms. Balboa, “How did you get involved in this?" The next morning, on May 22, 2013, Ms. Reilly returned to the Clerk’s Office and called a meeting with Mr. Murphy, Ms. Balboa, and Respondent. Ms. Reilly opened the meeting by asking Mr. Murphy and Ms. Balboa "what do you think your role is in this organization," and "where do your loyalties lay?" Ms. Reilly then announced that “it was a private matter, it was their personal business, [and] to stay out of it." Ms. Balboa testified at the final hearing that Ms. Reilly intimidated her in their meeting. Mr. Murphy conveyed that he understood that they were not to get involved in the severance payout matter. After the meeting, Ms. Gasinski was told to proceed with the payouts for Respondent and Ms. Reilly. On May 23, 2013, Ms. Gasinski processed a second severance payout check for Respondent and Ms. Reilly. Ms. Gasinski prepared for Respondent a revised final paycheck in the total amount of $156,443.11. This amount included a Severance Payment of $106,387.20. Respondent was also paid $25,826.23 for his vacation leave (349.57 hours times a rate of $73.88), as well as $24,229.68 for all his unused sick leave (327.96 hours times a rate of $73.88). A check in the net amount of $99,125.45 was deposited in Respondent’s personal bank account. On May 23, 2013, Respondent repaid the initial payout of $58,400.00 to the Clerk’s Office by personal check. After Ms. Reilly terminated his Employment Agreement on May 9, 2013, Respondent never left his position with the Clerk’s Office. Respondent considered himself an at-will employee and continued to report to work as General Counsel. There was never any break in his employment. At no time did Respondent (or the Clerk’s Office) initiate or complete any paperwork to rehire Respondent after either Ms. Gardner’s death or Ms. Reilly terminated his Employment Agreement. No documentation was prepared transitioning Respondent from a contract employee to an at-will employee. Respondent continued to perform the same duties under the same terms, conditions, and compensation contained in the Employment Agreement as if he never left office.5/ At the final hearing, Respondent testified why his interpretation of his Employment Agreement justified his actions and motives. Respondent first remarked that his Employment Agreement was not typical for a Clerk’s Office employee. It contained certain provisions which were not to be “exposed generally,” such as the termination clause and the contact termination fee. Therefore, he desired to keep his employment terms quiet. Respondent further disclosed that he did not initiate an ECN because his Severance Payment was not a human resources issue, it was a matter of contract. Respondent also explained that at the end of 2008, when his Employment Agreement was nearing its initial termination date, Respondent became concerned with his future at the Clerk’s Office. He began to wonder what would happen if Ms. Gardner left her position as Clerk. Therefore, he prepared, then executed, the 2009 amendment to the Employment Agreement extending it “indefinitely.” In 2013, Respondent prepared, then executed, the second amendment clarifying the term “termination.” Regarding collecting his Severance Payment without leaving his position with the Clerk’s Office, Respondent contended that just because his Employment Agreement was terminated (thus, entitling him to the Severance Payment) did not mean he had to leave employment with the Clerk’s Office. Respondent characterized the payment as a “contract termination fee.” Therefore, he asserted that the Clerk could terminate his Employment Agreement without actually terminating him from his position as General Counsel. Consequently, nothing prevented him from becoming an at-will employee. Accordingly, when Ms. Reilly terminated the Employment Agreements on May 9, 2013, by exercising her prerogative as the interim Clerk, she also decided that both Respondent and she would stay on with the Clerk’s Office as at-will employees until the new Clerk of Courts determined what to do with them. In February 2014, the new Clerk of Courts, Eddie Fernandez, determined to initiate an investigation to review the propriety of the 2013 Severance Payments to Respondent and Ms. Reilly. On March 28, 2014, Respondent was placed on administrative leave with pay. On April 1, 2014, after the investigation recommended that Respondent’s employment be terminated, Respondent resigned from his position with the Clerk’s Office. As a condition of his resignation, Respondent was not eligible for rehire by the Clerk’s Office. Respondent reimbursed the full amount of the money that he received as the Severance Payment from the Clerk’s Office. Commenting on the circumstances of his resignation and restitution, at the final hearing, Respondent urged that he did not act dishonestly, but, maybe he exercised bad judgment. Respondent also proclaimed that he received his Severance Payment because the interim Clerk ordered it, not by reason of his actions or conduct. Therefore, he personally never violated any duty of his office. Based on the evidence and testimony presented during the final hearing, the competent substantial evidence in the record establishes, by clear and convincing evidence, that Respondent acted corruptly, with a wrongful intent, in seeking and obtaining the Severance Payment when he never intended to leave his public employment with the Clerk’s Office. Accordingly, the Advocate proved that Respondent violated section 112.313(6).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding that Respondent, Steven Carter, violated section 112.313(6), Florida Statutes; and that Respondent be subject to public censure and reprimand. DONE AND ENTERED this 3rd day of January, 2017, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January, 2017.
The Issue Whether Respondent received a salary overpayment from Petitioner.
Findings Of Fact Based on the testimony and evidence presented at the final hearing, the following findings of fact are made. At all times material to this matter, Respondent was a career service employee of Petitioner until her separation on November 2, 2018. On November 21, 2018, Petitioner issued a pay warrant to Respondent for the pay period of November 2, 2018, through November 15, 2018, in the amount of $981.29. Since Respondent was separated from the Department, the pay warrant issued resulted in Respondent being overpaid $981.29. Upon discovering the error, Petitioner issued a letter notifying Respondent of the overpayment. Petitioner later conducted an audit and determined that Respondent’s leave balance and uniform allowance payment should be deducted from the overpayment amount, which resulted in a remaining total of $349.90. On July 10, 2019, Petitioner sent Respondent an amended letter requesting the remaining overpayment balance in the amount of $349.90.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Corrections enter a Final Order requiring Sierra McQueen-Ellis to repay Petitioner $349.90. DONE AND ENTERED this 20th day of December, 2019, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 2019.
