The Issue The issue to be resolved in this proceeding concerns whether the Petitioner qualifies, pursuant to Section 212.08(7)(o)2.d., Florida Statutes, for a consumer's Certificate of Exemption as a state, district, or other governing or administrative office, the function of which is to assist or regulate the customary activities of educational organizations or members.
Findings Of Fact The Petitioner is a "not for profit" corporation that, for all relevant periods of time, has held an exemption from federal income tax as an educational institution pursuant to Section 501(c)(3) of the federal Internal Revenue Code. The purpose of the Society, the Petitioner, is to further the practice of the teaching of photography and to insure high standards in photographic education in the educational institutions in this country and in Florida, particularly post- secondary educational institutions. The Society has been provided facilities at the Daytona Beach Community College, including office space, telephones and facsimile lines. The community college provides publication and marketing services to the Society. There is no formal affiliation between the Society and any higher educational institutions. The community college provides these services to the Society in return for the prestige associated with its being home to the Society. The Society is not accredited as an educational institution in its own right. It is an educational organization consisting primarily of university, college and secondary school educators as members. Its purpose is to advance the field of photographic education and to assist its members in their collective interests and concerns as educators. The Society also assists colleges, universities, and other organizations in achieving their educational mission in terms of education in the field of photography. It therefore functions as an administrative office, " . . the function of which is to assist or regulate the customary activities of educational organizations and members." The Society's national office assists the customary activities of the regional organizations under its umbrella through management of their data bases in support of their regional publications and conferences. The dominant function of those conferences is to promote educational standards in photography and related fields. They are typically attended by graduate students and educators in the field of photographic education. Moreover, the Society's national office examines and approves regional budget funding proposals and disburses funds to regional organizations that are in accord with its national by-laws and policies, so as to provide appropriate control and regulation with regard to its educational mission. The treasurer of the Society for photographic education requires uniform accounting procedures for each of the regional treasury accounts. The Society is thus an umbrella organization for eight regional societies located throughout the country. The Society provides money to these regional organizations and the regions are required to prepare and submit financial statements to the Society. These regional societies operate pursuant to the national by-laws and their officers serve at the pleasure of the national organization. Annual national conferences are held as are regional conferences by the regional societies. Participants at these conferences are offered seminar level courses and workshops in different areas of photography, such as digital imaging. There is also typically a trade show at these conferences where corporations demonstrate new products in the field of photography. Most of the persons attending these conferences are either graduate students or faculty members of various educational institutions. While the Society does not provide educational credit to attend these, the programs at these conferences are educational in nature, designed to further the education of the attendees in the aspects of the field of photographic education. The Society does not regularly provide educational curricula to other organizations.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED: That the Department of Revenue enter a Final Order granting the consumer Certificate of Exemption applied for by the Petitioner. DONE AND ENTERED this 7th day of July, 1998, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF 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 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1998. COPIES FURNISHED: Kevin O'Donnell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 James J. Murphy, Executive Director Society for Photographic Education Post Office Box 2811 Daytona Beach, Florida 32120-2811 Linda Lettera, Esquire Department of Revenue 204 Carson Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Petitioner, the AAI, Florida Chapter, is an affiliate member of the International Association of Arson Investigators, Inc. AAI, Florida Chapter, is a nonprofit corporation exempt from federal income tax under Section 501(c)(6) of the Internal Revenue Code, and is located at 2302 North Wallen Drive, Lake Park, Florida. The governing body for AAI, Florida Chapter, the International Association of Arson Investigators, is a world-wide organization dedicated to the suppression of arson and related criminal activities. The mission of the International Association of Arson Investigators is to provide education, training, and public awareness to combat these crimes. To this end, the International Association of Arson Investigators provides training through regional programs, seminars, and publications. The AAI, Florida Chapter, exists pursuant to a grant of authority from the International Association of Arson Investigators. However, the AAI, Florida Chapter, is a separate and distinct legal entity from the International Association of Arson Investigators. The membership of the AAI, Florida Chapter, is comprised of individuals involved in some professional aspect of arson suppression. Members are typically employed by fire departments, law enforcement agencies, and fire marshals' offices. Petitioner's membership also includes representatives from the Statewide Prosecutor's Office, the Florida Department of Law Enforcement, the various state attorneys' offices, and sheriffs' offices. Petitioner provides training for state agencies and educational organizations, including the Florida Fire College, Federal Law Enforcement Training Center, the National Fire Academy, and school districts, community colleges and public universities in Florida. Petitioner provides the personnel, supplies, equipment and materials for the training programs which it conducts. Some of the training seminars conducted by Petitioner receive law enforcement matching funds, and are approved for continuing education units for law enforcement personnel and for recertification contact hours for fire service personnel. The educational training and programs provided by AAI, Florida Chapter, are offered to various entities on a contractual basis. Notwithstanding Petitioner's contractual relationships with several educational entities, it has no authority or control over those entities. Petitioner is not accredited by nor is it a member of Southern Association of Colleges and Schools, the Florida Council of Independent Schools, or any other organization responsible for accrediting educational entities. Petitioner applied for a consumer certificate of exemption as an educational institution, and contends that the basis for such exemption is that it is an administrative office whose function is to assist or regulate the customary activities of its members.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a final order denying a consumer certificate of tax exemption to Petitioner, the International Association of Arson Investigators, Florida Chapter. DONE and ENTERED this 21st day of May, 1996, in Tallahassee, Florida. CARLOYN S. HOLIFIELD, 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 21st day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5668 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. 1-12. Accepted and incorporated to the extent not subordinate or unnecessary. Respondent's Proposed Findings of Fact. 1. 1-18. Accepted and incorporated to the extent not subordinate or unnecessary. COPIES FURNISHED: Linda Lettera General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Ruth Ann Smith, Esquire Tracy L. Allen, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Guy E. Burnette, Jr., Esquire William R. Lewis, Esquire Butler, Burnette & Pappas Bayport Plaza, Suite 1100 6200 Courtney Campbell Causeway Tampa, Florida 33607-1458 Larry Ruchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner, Seminole Community College, is a community college governed by a community college district board of trustees vested with the responsibility of operating the college in accordance with applicable statutes, rules of the State Board of Education and State Board of Community Colleges, as well as its own rules. Each community college board of trustees is responsible for establishing and discontinuing programs and course offerings. Each community college board of trustees is responsible for the appointment, employment, and removal of personnel. Such personnel includes course instructors employed by the college to teach specific courses or programs offered by the school. The Petitioner offers instruction in courses ranging from basic academic subjects, which might be comparable to high school courses, to sophisticated courses that might be comparable to four-year college courses. Additionally, the Petitioner is the area vocational center and adult continuing education function for Seminole County. Prior to April 9, 1991, the Respondent had been a continuing contract instructor employed by the Petitioner for several years. Respondent was employed to teach the upholstery or reupholstery (upholstery) course/program offered by the college. In the 1986 school year, the upholstery program was given a formal evaluation as it had experienced a decline in student enrollment. Goals were established to encourage student participation in the program and additional development of the program. The evaluation or program review described in paragraph 6 was performed under the guidelines addressed in Appendix K, and resulted in the program being placed on probation for one year with the following condition: that the enrollment goal of an average of 16 full-time or full-time equivalent students per term be established. The probation term ran from April 1, 1986 through, presumably, March 30, 1987. Appendix K is a procedure utilized by the Petitioner to evaluate and review programs or courses offered by the school. On March 27, 1986, the president of the college issued a letter to Respondent advising him of the probation status of the upholstery program. The letter further provided that should the program be terminated, that the instructional position held by Respondent would be terminated. In January, 1991, Dr. Samuels, as Vice President for Instructions, issued a memorandum to the Deans' Council advising them of budget cuts incurred and expected by the college. Further, the memorandum provided that it was expected that instruction would have to absorb a major fraction of the expected future decrease amount. On January 17, 1991, the college president issued a memorandum to all full-time college employees that addressed the cuts experienced to that date and the expectation of cuts for the planning for the next budget year. In connection with planning for the 1991-92 budget year, Dr. Samuels met with the deans for areas of instruction under his supervision and requested that they consider alternatives given budget cuts of three levels: $200,000; $400,000; and $600,000. The goal was to prioritize spending to meet the instructional needs of the college, and to assume potential budget "worst case" scenarios. Dean Tesinsky gave the directors of her applied technologies area the following guidelines to prepare their proposals for services and programs: to preserve full-time faculty positions; to preserve full-time equivalent (FTE) student hours; if possible, to reduce regular part-time support first; and to eliminate unproductive programs. "Unproductive programs" were defined as having low enrollment relative to capacity and a decreasing enrollment trend. Such programs are also referred to as "weak programs" in this record. When the reviews of their programs were completed by the directors under Dean Tesinsky, she reported findings to Dr. Samuels. Such findings recommended the elimination of the upholstery, welding and culinary arts (on- campus) programs at the $600,000 budget cut level. The reviews performed by the directors and Dean Tesinsky did not follow the guidelines set forth in Appendix K. Concurrent with the planning incidental to the budget cuts options, Dr. Samuels reviewed information regarding the course offerings and courses or sections not available at the college but which were in great demand by large numbers of students. Courses of instruction which were identified as being in critical need of full-time instructors were: computer assisted drafting (CAD); biology, with laboratory experience; mathematics, foreign languages, and humanities. Further, there were vocational programs within the applied technologies area where additional sections and, consequently, instructors, were needed to meet student demand for courses. As a result of the foregoing, Dr. Samuels concluded that the budget amounts needed for instructors' salaries would have to increase, not decrease. To that end, Dr. Samuels concluded that monies captured from the elimination of unproductive programs could be redistributed to fund sections in the high demand areas of instruction previously identified. Given the notion that they would have to eliminate Respondent's program, Dean Tesinsky, Dr. Samuels, and Russ Calvet attempted to relocate Respondent to another program or course of instruction. However, no course or instructor opening was found for which they felt Respondent could qualify and be reassigned. On March 22, 1991, the college president issued a letter to Respondent that provided, in part, as follows: I have been informed that it is no longer feasible to continue the Reupholstery program. Therefore, in consideration of the College's mission to meet the educational needs of the community, the current budget concerns for the next fiscal year, and the past, present, and projected future enrollments of the Reupholstery program, it has been determined that the program will be discontinued at the end of this fiscal year. It is therefore with considerable regret that I inform you that a recommendation shall be made to the District Board of Trustees on April 9, that your contract with the College be terminated as of June 30, 1991. Your educational qualifications do not make it possible to reassign you to another instructional program area; however, should a position vacancy occur for which you are qualified, you will be notified. On April 1, 1991, the president forwarded a memorandum to the district board of trustees members that addressed the proposed termination of employment of the three vocational instructors. That memorandum reiterated the information given to the Respondent in the letter dated March 23, 1991. On April 9, 1991, the board of trustees voted to terminate the full- time, continuing contract position held by Respondent. Subsequently, Respondent timely requested an administrative hearing to review that decision.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Board of Trustees of the Seminole Community College enter a final order confirming the elimination of the upholstery program and the termination of Respondent's continuing contract. DONE and ENTERED this 30th day of July, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1992. APPENDIX TO RECOMMENDED ORDER RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: Paragraphs 1 through 3, 5 through 7, 12, 14 through 22 are accepted. As to paragraph 4, it is accepted that Respondent was hand-delivered the letter notice dated March 23, 1991; otherwise rejected as a conclusion of law. It is concluded, however, that such letter was sufficient to place the Respondent on notice of the college's position regarding the proposed actions. That portion of paragraph 8 which suggests that Director Satterlee's analysis was the first time the reupholstery program was identified as weak is rejected as contrary to the weight of the evidence. This program had a history of being "unproductive" and had, in fact, been on probation in the not-too- distant past. Paragraph 9 is rejected as a misstatement of Petitioner's exhibit 41. That exhibit showed the headcounts as stated but showed the "instructor salary w/benefits" to be $62,552. Paragraph 10 is rejected to the extent that it suggests the reupholstery program had been on probation in any year other than 1986. With the following clarifications, paragraph 11 is accepted: that additional full-time instructors were needed; that the number of adjunct instructors would be reduced since full-time instructors would be added; that adding full-time instructors was a meaningful goal in order to upgrade programs/courses; add "therapy" after the word "respiratory" in the first sentence of 11b.; add under 11c., that there are now less than 500 students on overload status. The first sentence of paragraph 13 is accepted. The remainder is rejected as irrelevant. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: To the extent addressed in the foregoing findings of fact, paragraphs 1 and 2 are accepted. Paragraphs 3 through 5 are accepted but are irrelevant. With regard to paragraph 6, it is accepted that Dr. Samuels is Vice President for Instructions with the general responsibility for all the instructional programs at the college and that he made recommendations to the president of the college; otherwise rejected as not supported by the record cited. Paragraph 7 is accepted. Paragraph 8 is rejected as not supported by record cited. Paragraph 9 is accepted with the clarification that Mr. Calvet's title is Dean of Personnel Services. Paragraph 10 is accepted. Paragraph 11 is rejected as it does not make sense. Paragraph 12 is rejected as contrary to the weight of the evidence. Paragraph 13 is rejected as not supported by the record cited. Paragraph 14 is rejected as irrelevant; no wrongdoing or misconduct has been suggested by the Petitioner. With regard to paragraph 15, it is accepted that the letter dated March 22, 1991, was the first written notice of the proposed action; otherwise rejected as contrary to the weight of the evidence. With regard to paragraph 16, see comment above regarding proposed finding of fact 15. Paragraph 17 is rejected as a misstatement of the record. To suggest the Petitioner contemplating "firing" Respondents grossly misstates their position. The Respondents' programs were eliminated and, consequently, their continuing contracts terminated. No suggestion of misconduct, incompetence, or wrongdoing on the part of these instructors should be suggested. To the contrary, these instructors were well qualified in their respective fields and respected by the employer. Paragraphs 18 and 19 are accepted. Paragraph 20 is accepted to the extent addressed ruling 12 above. Paragraph 21 is rejected as repetitive; see above. Paragraph 22 is rejected as contrary to the weight of credible evidence. Paragraph 23 is rejected as repetitive; see above. Paragraphs 24 through 30 are rejected as contrary to the weight of the evidence, irrelevant, or not supported by the record cited. Paragraphs 31 through 37 are accepted. Paragraph 38 is accepted when clarified to add "an administrative procedure" for "the" after the word "out." Paragraph 39 is accepted. Paragraph 40 is rejected as a conclusion not supported by the record cited. Paragraph 41 is rejected as contrary to the weight of the evidence. Paragraph 42 is accepted. Paragraph 43 is rejected as repetitive or irrelevant. Paragraph 44 is rejected as not supported by the record cited or irrelevant. Paragraph 45 is rejected as not supported by the record cited or irrelevant. Paragraph 46 is accepted but is irrelevant. Paragraph 47 is rejected as argument and irrelevant. Paragraph 48 is rejected as argument and irrelevant. Paragraphs 49 through 52 are accepted. Paragraph 53 is rejected as contrary to the weight of the credible evidence. Paragraph 54 is accepted. Paragraph 55 is rejected as contrary to the weight of the credible evidence. Paragraph 56 is accepted. With the deletion of the word "only" paragraph 57 is accepted. Paragraph 58 is rejected as contrary to the weight of the credible evidence. Paragraph 59 is rejected as not supported by the record cited. Paragraph 60 is rejected as repetitive or irrelevant. Paragraph 61 is rejected as irrelevant or contrary to the weight of the evidence. Paragraph 62 is accepted. The first sentence of paragraph 63 is accepted; otherwise rejected as irrelevant or not supported by the evidence cited or speculation. Paragraph 64 is accepted. Paragraphs 65 and 66 are rejected as not supported by the record cited. Paragraphs 67 is accepted to the extent that the meeting(s) identified the programs as "weaker." Paragraph 68 is accepted but is irrelevant. Paragraph 69 is accepted but is irrelevant. Paragraphs 70 through 73 are rejected as argumentative, irrelevant, or not supported by record cited. The first sentence of paragraph 74 is accepted; otherwise rejected as argument, irrelevant, or not supported by record cited. Paragraph 75 is rejected as argumentative, irrelevant, or not supported by record cited. The first two sentences of paragraph 76 are accepted; otherwise rejected as not supported record cited or contrary to the weight of evidence. Paragraph 77 is rejected as repetitive, irrelevant, and not supported by record cited. Paragraph 78 is rejected as conclusion of law or irrelevant. Paragraph 79 is rejected as it does not make sense or irrelevant. Paragraph 80 is rejected as contrary to the weight of the evidence. Paragraph 81 is rejected as irrelevant. With the addition of the phrase "or could be" after the word "would," paragraph 84 is accepted; otherwise rejected as contrary to the record cited. Paragraphs 85 and 86 are rejected as contrary to the record cited. Paragraph 87 is accepted. Paragraph 88 is rejected as contrary to the weight of the evidence. Paragraph 89 is repetitive in part but is accepted. Paragraph 90 is rejected as contrary to the weight of the evidence. Paragraph 91 is rejected as irrelevant. Paragraphs 92 and 93 are accepted. Paragraph 94 is rejected as irrelevant. Paragraph 95 is rejected as not supported by the record cited. Paragraph 96 is rejected as repetitive or irrelevant. Paragraph 97 is rejected as irrelevant. Paragraph 98 is rejected as not supported by record cited, contrary to the weight of evidence. Paragraph 99 is rejected as repetitive and irrelevant. Paragraph 100 is rejected as repetitive and irrelevant. Paragraph 101 is accepted. Paragraphs 102 through 105 are rejected as repetitive or irrelevant. Paragraphs 106 through 110 are accepted but are irrelevant. Paragraph 111 is rejected as contrary to the evidence. Paragraphs 112 through 115 are accepted. Paragraph 116 is rejected as argumentative. Paragraph 117 is accepted but is irrelevant. Paragraph 118 is rejected as not supported by record cited. Paragraphs 119 through 122 are accepted. Paragraph 123 is rejected as repetitive. Paragraphs 124 and 125 are accepted. Insert word "contact" after "thirty" in paragraph 125. Paragraph 126 is rejected as irrelevant or argumentative. Paragraph 127 is accepted but is irrelevant. Paragraph 128 is rejected as contrary to the weight of the evidence. Paragraph 129 is accepted. Paragraph 130 is rejected as irrelevant. Paragraphs 131 through 134 are accepted. Paragraph 135 is rejected as contrary to the weight of the evidence. Paragraphs 136 and 137 are accepted with the addition to paragraph 137 that such position was only part-time and not vacant. Paragraph 138 is rejected as irrelevant. Paragraphs 139 through 141 are accepted. Paragraph 142 is rejected as repetitive or irrelevant. Paragraphs 143 through 147 are accepted. Paragraph 148 is rejected as contrary to the weight of the evidence. Paragraphs 149 through 152 are accepted. Paragraph 153 is rejected as not supported by the record cited. Paragraph 154 is rejected as not supported by the record cited. Paragraphs 155 through 160 though repetitive in part are accepted. Paragraph 161 is rejected as contrary to the weight of the evidence. Paragraph 162 is rejected as repetitive, argumentative, or irrelevant. Paragraph 163 is rejected as contrary to the weight of the evidence. COPIES FURNISHED: J. Dana Fogle FOGLE & FOGLE, P.A. 217 East Plymouth Avenue Post Office Box 817 DeLand, Florida 32721-0817 Joseph Egan, Jr. EGAN, LEV & SIWICA, P.A. Box 2231 Orlando, Florida 32802 Margaret T. Roberts COBLE, BARKIN, GORDON, MORRIS & REYNOLDS, P.A. 1020 Volusia Avenue Post Office Drawer 9670 Daytona Beach, Florida 32120
Findings Of Fact Respondent was employed by the Bradford County School Board as a cosmetology instructor on a continuing teaching contract at the Bradford-Union Area Vocational-Technical Center (Va-Tech Center) in Starke, Florida, for the school year 1983-1984. Respondent's class was designed to prepare students to become licensed cosmetologists. On one occasion prior to Christmas, 1983, Mary Lee Wolf and Rose Smith, students of Respondent, brought an unopened bottle of wine onto the Vo-Tech Center grounds and presented it to Respondent during a class. There is no evidence that Respondent solicited the gift. Subsequently, on another date and after class hours, students Mary Lee Wolf, Tina Moyer, Bonnie Banks and Respondent's teaching aide, Helen Van Wart, opened the bottle and drank wine from cups in Respondent's presence. Respondent was served a cup, but there is no direct, credible testimony that Respondent personally consumed any wine. There is no evidence that any of those who consumed the wine were minors. In February 1984 the Ace Beauty Company, in conjunction with the Florida Cosmetology School Association, put on the Florida Sunshine Trade Show in Tampa, Florida. Attendance by students in Respondent's class at this particular trade show was encouraged by Respondent and pre-authorized by the Vo- Tech Center Director, David B. Smith, Jr. Mr. Smith made no provisions for a teacher's aide to fill in for Respondent on Monday, February 13 and Tuesday, February 14 because Respondent informed him that all but one or two of her students would be attending the trade show from February 11 through February 14, 1984. In fact, seven students did not attend and those who attended returned late February 13. On Friday, February 10, 1984, Mr. Smith approved use of the Vo-Tech Center van for Respondent's field trip, provided only Respondent drive the van. The same day, Respondent gave Mr. Smith a signed Application for Leave, requesting leave from February 11, 1984 through February 14, 1984. Past experience indicated trade shows may exceed the printed agenda. Saturday morning, February 11, 1984, Respondent and the eleven students travelling to the cosmetology show in Tampa, met in the Vo-Tech Center parking lot to board the van. While passing luggage to the Respondent for loading into the van, Bonnie Banks saw liquor bottles protruding from paper bags and remarked to Respondent that it looked like a party was planned. Respondent did not answer her Various students drank mixed alcoholic beverages from paper cups while standing near the van. Those involved took some care to shield their activities from Respondent and there is no direct credible evidence in the record to indicate Respondent was present or observed this alcoholic consumption on the school parking lot. Before climbing aboard the van, several of the students heard Respondent comment to the effect that the students were all adults and she expected them to behave that way. Some interpreted this to mean they were being given tacit permission to drink alcoholic beverages; others interpreted it as a warning either not to drink alcoholic beverages on the trip or not to let Respondent observe them drinking, if they did. Some of the students drank mixed alcoholic drinks from paper or plastic cups in the van while Respondent drove the van to Tampa. Mary Lee Wolf "tasted" some Kahlua liquor from a bottle in a brown paper bag. At one point, another liquor bottle in a brown paper bag rolled forward on the floor near Respondent in the driver's seat and Respondent passed it back to students behind her with an admonition to the effect of "keep it down back there." While it is unclear whether this comment was directed to Ms. Wolf or to someone in control of the rolling bottle, of those students who observed the bottle incident, all understood Respondent's comment to mean "don't let the liquor be seen" as opposed to "stop drinking and don't be so loud." While en route to Tampa, Respondent stopped in Gainesville, Florida, to refuel. At this stop, students Paula Tanner, Bonnie Banks, and Kay Kane left the van, purchased a six pack of beer at an adjoining convenience store and brought it back in a brown bag to the van. Respondent was in an adjoining bakery and did not see the beer loaded. Thereafter, various students drank beer from paper and plastic cups while Respondent drove the van. There is no evidence that any of these students was a minor and there is no direct, credible evidence Respondent consumed any alcoholic beverages in the van. Also at the Gainesville stop, Respondent drove from the gas pumps to another parking location without closing one of the van doors. The open door contacted the bumper of a parked car. There was little or no visual damage to the van but the students had difficulty closing the door again. Respondent had the necessary minor repair work done to the van in the Vo-Tech mechanical shop upon her return but did not report the accident to Director Smith. When Respondent unloaded the van in Tampa, several beer cans littered the van floor and a liquor bottle was dropped and broken in proximity to Respondent. Upon arrival in Tampa, Respondent registered in the Hyatt Regency Hotel, where the trade show was located. For financial reasons, several students had pre-registered in the less expensive Econo-Lodge some distance from the trade show. Respondent permitted Rose Smith to transport these students to and from the Econo-Lodge accommodations to the cosmetology show at the Hyatt Regency throughout the group's stay in Tampa. She jestingly told Rose Smith to say she was Respondent. On Sunday evening, after all educational activities ceased, Rose Smith also drove several of the students to the Confetti Lounge where they consumed alcoholic beverages. Rose Smith and some other students consumed alcoholic beverages in the van on this occasion. Respondent did not accompany the group to the Confetti Lounge. The Florida Sunshine Trade Show ended at 4:00 p.m., Monday, February 13, 1984. Respondent drove the van back to Starke that evening. During the return trip, some students complained of what they considered excessive speed. Respondent's reply to Paula Tanner's complaint was that if she did not like the ride she could get out and walk. The group arrived at the Vo-Tech campus at approximately 10:30 p.m. People were present on the grounds, in the classrooms, and in the administration offices when the cosmetology students arrived and for some time thereafter Respondent waited at the Vo-Tech Center for most of the students to be picked up. At student Lisa Morgan's request, she eventually took the remaining students home, but Ms. Morgan refused Respondent's offer to wait with her and insisted on waiting for her own ride which did not arrive until after 1:30 a.m. Tuesday morning, February 14, 1984. Respondent retained the Vo-Tech van at her home on Tuesday, February 14, 1984. On February 15, 1984, she reported for work. This is the day the van was repaired. In separate conversations with Barbara Casey, secretary to Director Smith, and with Martha Smith, (Mrs. David Smith) media specialist, Respondent gave the impression she had returned to Starke late Tuesday night. Respondent also submitted a newspaper release to that effect. On or about Friday, February 17, 1984, Respondent submitted to Director Smith a per-diem voucher requesting compensation from 9:30 a.m., February 11, 1984 to 11:00 p.m., February 14, 1984 when she had in fact returned at 10:30 p.m., February 13, 1984. At Mr. Smith's request for a supporting agenda she submitted a typed agenda for the trade show indicating activities through part of Tuesday, February 14, 1984. Four other per diem requests submitted by Respondent during the previous four years for field trips had exceeded the time periods established in their respectively attached agendas. In each instance, Mr. Michael Reddish, finance officer, reduced the time requested and made a reduced per diem reimbursement payment to coincide with the agenda submitted. Each time he did this he informed Director Smith of these actions; neither Smith nor Reddish informed Respondent of these actions, but it may be inferred that she was aware her per diem reimbursement payments were being reduced from the hours she had requested so as to coincide with the agendas she had submitted simultaneously with her per diem reimbursement requests. The per diem reimbursement request submitted on February 17, 1984 with supporting agenda amounted to a request for fifty dollars ($50.00) more than the actual time spent by Respondent on the trade show trip. Respondent's class procedures involved several sources of funds: individual student contributions to a profanity jar, proceeds of a class hot dog sale, fees charged to patrons for student beauty services, charges to students for supplies used by them in class, charges to students for sale of materials such as shampoos and permanents which they took home, and charges to students for special purchase items such as mannequins. Mannequins are false "heads" with rooted hair for hair services' practice. The profanity jar was apparently Respondent's idea to teach decorous language for purposes of future employment. Students who "cussed" were required to deposit various amounts of small change into the jar for each infraction. The amount in this jar at any point in time was never established by any credible evidence, nor has it been established what became of it or that Respondent emptied it. Proceeds from the class hot dog sale were originally intended to be used for groceries for use only for those students attending the trade show field trip. Instead, Respondent responded to non-attenders' complaints and purchased hairspray for the whole class. Although the highest "guesstimate" for hot dog monies was $25, the exact amount of proceeds from the hot dog sale has never been established by any direct credible testimony. At the beginning of the 1983-1984 school year, Director Smith and Respondent agreed that because Vo-Tech and the students each derived some benefit from student use of supplies, the school would charge students half price for supplies they wished to use at home. These types of supplies were initially purchased by the school from internal student money generated from student work on patrons and from sale of the supplies to students. They were internal funds and not county monies in Director Smith's eyes. Director Smith required that funds received from students and patrons be accounted for daily but no one in his office checked up on this. It was left to a teacher or a student to report these amounts on "Report of Monies" logs from each class daily. There is confusion in the testimony of Director Smith, Ms. Edwards, secretary-bookkeeper, and Ms. Norman, school clerk, as to what constituted retail sales and what constituted internal funds, and as to whether wigs and mannequins on hand constitute "supplies" (always retail sales) or are always classified in the category of special pre-paid purchase items. Students could purchase mannequins through the school office but mannequins were normally purchased by the school with county money and Mr. Smith's understanding was that in the 1983-1984 school year there had been only one purchase of mannequins made with county monies and therefore they were not for resale. Ms. Edwards and Ms. Norman thought sale of supplies to students could not generate internal funds and was not permitted, contrary to Mr. Smith's understanding, and both ladies were vague as to whether there had been another set of mannequins for students to purchase. All three administrators agreed resale of items purchased with county funds was improper. Ms. Edwards and Ms. Norman are the persons who determined no amounts of monies in any category had been turned in from Respondent's class in the 1983-1984 school year. On one occasion, student Elizabeth Kelly paid for a mannequin in advance with a check from her grandfather to her, which she endorsed over to Helen Van Wart. She eventually received the mannequin from Helen Van Wart. On another occasion, Bonnie Banks delivered a blank check for $24.00 to Respondent. It was cashed with the name "Betty J. Hutson" filled in and also endorsed on the back. That name is Respondent's name and Bonnie Banks thought that was Respondent's signature but no predicate/foundation/reason exists in the record for that assumption. Bonnie Banks also received her mannequin. In the 1983-1984 school year, money for all supplies regardless of how categorized were collected by Respondent's teacher's aide, Mrs. Van Wart, but the keys to the supply cabinet were freely given out to students. Permanents were left sitting on an open shelf. Mrs. Van Wart did not routinely give out receipts and none of the money students recall paying for supplies was turned in to the Director's office. In the previous years, student monies and retail sales for patrons services and sales to students had been turned in to the office from Respondent's class. In 1983-1984, no theft of monies or supplies was reported to the Director by anyone. Only one student, Elizabeth Kelly, recalls Respondent mentioning some money was stolen but how much or from what source this money was derived was never established by any direct credible testimony. No credible testimony established any supplies were actually missing from the supply cabinet and an outside year end audit revealed no problems in Respondent's class. Petitioner established that over a period of approximately three years, Respondent fell asleep several times while under the hairdryer during class while her students practiced on her. On one other occasion, she was absent from the classroom for a short period of time on a personal errand off- campus. The maximum period of time she was gone was less than an hour and a half and during this period she was entitled to take her lunch. During this absence, a patron was permanented by a student and injured. It is contrary to Vo-Tech policy for students to use chemicals without on-site instructor supervision and Respondent did not advise Director Smith of the patron's injury. She further requested her students to say she was in the school cafeteria when it happened. Cosmetology students attending a normal day of classes on campus would be legitimately credited with seven (7) hours toward their state board requirement. Feeling trade shows were worthwhile learning experiences, Mr. Smith authorized granting students eight (8) hours for the planned activities of a field trip day. At the beginning of the 1983-1984 school year, Respondent told her entire class that no-one-would be required to attend class the day following any multi-day trade show or seminar. On Friday, February 10, 1984, Respondent told her class that they would be returning from the trade show on Monday evening, February 13; that there would be no class on Tuesday, February 14; and that everyone would still get credit for class on Tuesday. Respondent advised her class that students not attending the trade show would receive attendance credit whether or not they attended school on Monday or Tuesday. Seven students were not in school or any school approved instructional program on Monday, February These were the students not attending the trade show that day. Eighteen students were not in school or any school approved instructional program on Tuesday, February 14, 1984. This included the eleven students who had returned from the Tampa trade show with Respondent the night before. Respondent gave all the students credit for seven (7) hours on Monday and seven (7) hours on Tuesday instead of eight (8) hours for Sunday and eight (8) hours on Monday for the students attending the trade show and zero (0) hours credit for the "stay at homes" on Monday and zero (o) hours credit for all students for Tuesday. Director Smith testified he would have no problem if she had given eight (8) hours per day for the trade show activities but the attendance records did not reflect that specifically. Interestingly, after Respondent was suspended, Mr. Smith confirmed Respondent's practice by crediting all students just as Respondent had. Before and during the trade show trip, and at various times thereafter Respondent instructed the students who had been on the field trip, that if asked, they were to say they returned to the Vo-Tech Center grounds on February 14, 1984, instead of a day earlier. Respondent's immediate supervisor, David Smith, instituted an investigation of Respondent' a activities approximately February 17, 1984. Be did not immediately advise her of the serious allegations concerning allegedly missing supplies and leave requests/per diem claims. Respondent was not aided by him in correcting the latter concern. Particularly, she was prevented from correcting the leave requests/per diem claims. On March 17, 1984, Respondent submitted a letter stating she was at home on February 14, suffering from exhaustion and wished to amend her leave and per diem requests. On March 19, 1984, Respondent submitted an amended sick leave request. Director Smith refused to approve these as over thirty days from date of the sick leave and because he considered the initial requests to be fraudulent.
Recommendation Upon assessment of the facts found, and in the conclusions of law reached and in consideration of the argument of counsel, it is recommended 1. That the Bradford County School Board enter a Final Order ratifying Respondent's suspension of employment with the Bradford County School Board without pay and continuing that suspension without pay to and including the end of the 1984-1985 school year, a total of 2 school years. DONE and ORDERED this 1st day of February, 1985, in Tallahassee, Florida. ELLA JANE P. DAVIS 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 1st day of February, 1985.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner, Seminole Community College, is a community college governed by a community college district board of trustees vested with the responsibility of operating the college in accordance with applicable statutes, rules of the State Board of Education and State Board of Community Colleges, as well as its own rules. Each community college board of trustees is responsible for establishing and discontinuing programs and course offerings. Each community college board of trustees is responsible for the appointment, employment, and removal of personnel. Such personnel includes course instructors employed by the college to teach specific courses or programs offered by the school. The Petitioner offers instruction in courses ranging from basic academic subjects, which might be comparable to high school courses, to sophisticated courses that might be comparable to four-year college courses. Additionally, the Petitioner is the area vocational center and adult continuing education function for Seminole County. Prior to April 9, 1991, the Respondent had been a continuing contract instructor employed by the Petitioner for several years. Respondent was employed to teach the welding course/program offered by the college. In January, 1991, Dr. Samuels, as Vice President for Instructions, issued a memorandum to the Deans' Council advising them of budget cuts incurred and expected by the college. Further, the memorandum provided that it was expected that instruction would have to absorb a major fraction of the expected future decrease in funding. On January 17, 1991, the college president issued a memorandum to all full-time college employees that addressed the cuts experienced to that date and the expectation of cuts which would be considered for planning the next budget year. In connection with planning for the 1991-92 budget year, Dr. Samuels met with the deans for areas of instruction under his supervision and requested that they consider alternatives given budget cuts of three levels: $200,000; $400,000; and $600,000. The goal was to prioritize spending to meet the instructional needs of the college, and to assume potential budget "worst case" scenarios. Dean Tesinsky gave the directors of her applied technologies area the following guidelines to prepare their proposals for services and programs: to preserve full-time faculty positions; to preserve full-time equivalent (FTE) student hours; if possible, to reduce regular part-time support first; and to eliminate unproductive programs. "Unproductive programs" were defined as having low enrollment relative to capacity and a decreasing enrollment trend. Such programs are also referred to as "weak programs" in this record. When the directors completed the reviews of their programs, Dean Tesinsky reported the findings to Dr. Samuels. Ultimately, such findings recommended the elimination of the upholstery, welding and culinary arts (on- campus) programs at the $600,000 budget cut level. The reviews performed by the directors and Dean Tesinsky did not follow the guidelines set forth in Appendix K. Appendix K is a procedure utilized by the Petitioner to evaluate and review programs or courses offered by the school. Concurrent with the planning performed incidental to the expected budget cuts, Dr. Samuels reviewed information regarding the course offerings and courses or sections not available at the college but for which large numbers of students had expressed demand. Courses of instruction which were identified as being in critical need of full-time instructors were: computer assisted drafting (CAD); biology, with laboratory experience; mathematics, foreign languages, and humanities. Further, there were vocational programs within the applied technologies area where additional sections and, consequently, instructors, were needed to meet student demand for courses. As a result of the foregoing, Dr. Samuels concluded that the budget amounts needed for instructors' salaries would have to increase, not decrease. To that end, Dr. Samuels concluded that monies captured from the elimination of unproductive programs could be redistributed to fund sections in the high demand areas of instruction previously identified. Given the notion that they would have to eliminate Respondent's program, Dean Tesinsky, Dr. Samuels, and Russ Calvet attempted to relocate Respondent to another program or course of instruction. However, no course or instructor opening was found for which they felt Respondent could qualify. On March 22, 1991, the college president issued a letter to Respondent that provided, in part, as follows: I have been informed that it is no longer feasible to continue the Welding program. Therefore, in consideration of the College's mission to meet the educational needs of the community, the current budget concerns for the next fiscal year, and the past, present, and projected future enrollments of the Welding program, it has been determined that the program will be discontinued at the end of this fiscal year. It is therefore with considerable regret that I inform you that a recommendation shall be made to the District Board of Trustees on April 9, that your contract with the College be terminated as of June 30, 1991. Your educational qualifications do not make it possible to reassign you to another instructional program area; however, should a position vacancy occur for which you are qualified, you will be notified. On April 1, 1991, the president forwarded a memorandum to the district board of trustees members that addressed the proposed termination of employment of the three vocational instructors. That memorandum reiterated the information given to the Respondent in the letter dated March 22, 1991. On April 9, 1991, the board of trustees voted to terminate the full- time, continuing contract position held by Respondent. Subsequently, Respondent timely requested an administrative hearing to review that decision.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Board of Trustees of the Seminole Community College enter a final order confirming the elimination of the welding program and the termination of Respondent's continuing contract. DONE and ENTERED this 30th day of July, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1992. APPENDIX TO RECOMMENDED ORDER RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: Paragraphs 1 through 3, 5 through 8, 11, 13 through 21 are accepted. As to paragraph 4, it is accepted that Respondent was hand-delivered the letter notice dated March 22, 1991; otherwise rejected as a conclusion of law, not fact. It has been concluded, however, that such letter was sufficient to place the Respondent on notice of the college's position regarding the proposed actions. Paragraph 9 is rejected as a misstatement of Petitioner's exhibit 42. That exhibit showed the headcounts as stated but showed the "instructor salary w/benefits" to be $57,133. With the following clarifications, paragraph 10 is accepted: that additional full-time instructors were needed; that the number of adjunct instructors would be reduced since full-time instructors would be added; that adding full-time instructors was a meaningful goal in order to upgrade programs/courses; add "therapy" after the word "respiratory" in the first sentence of 11b.; add under 11c., that there are now less than 500 students on overload status. The first sentence of paragraph 12 is accepted. The remainder is rejected as irrelevant. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: To the extent addressed in the foregoing findings of fact, paragraphs 1 and 2 are accepted. Paragraphs 3 through 5 are accepted but are irrelevant. With regard to paragraph 6, it is accepted that Dr. Samuels is Vice President for Instructions with the general responsibility for all the instructional programs at the college and that he made recommendations to the president of the college; otherwise rejected as not supported by the record cited. Paragraph 7 is accepted. Paragraph 8 is rejected as not supported by record cited. Paragraph 9 is accepted with the clarification that Mr. Calvet's title is Dean of Personnel Services. Paragraph 10 is accepted. Paragraph 11 is rejected as it does not make sense. Paragraph 12 is rejected as contrary to the weight of the evidence. Paragraph 13 is rejected as not supported by the record cited. Paragraph 14 is rejected as irrelevant; no wrongdoing or misconduct has been suggested by the Petitioner. With regard to paragraph 15, it is accepted that the letter dated March 22, 1991, was the first written notice of the proposed action; otherwise rejected as contrary to the weight of the evidence. With regard to paragraph 16, see comment above regarding proposed finding of fact 15. Paragraph 17 is rejected as a misstatement of the record. To suggest the Petitioner contemplating "firing" Respondents grossly misstates their position. The Respondents' programs were eliminated and, consequently, their continuing contracts terminated. No suggestion of misconduct, incompetence, or wrongdoing on the part of these instructors should be suggested. To the contrary, these instructors were well qualified in their respective fields and respected by the employer. Paragraphs 18 and 19 are accepted. Paragraph 20 is accepted to the extent addressed ruling 12 above. Paragraph 21 is rejected as repetitive; see above. Paragraph 22 is rejected as contrary to the weight of credible evidence. Paragraph 23 is rejected as repetitive; see above. Paragraphs 24 through 30 are rejected as contrary to the weight of the evidence, irrelevant, or not supported by the record cited. Paragraphs 31 through 37 are accepted. Paragraph 38 is accepted when clarified to add "an administrative procedure" for "the" after the word "out." Paragraph 39 is accepted. Paragraph 40 is rejected as a conclusion not supported by the record cited. Paragraph 41 is rejected as contrary to the weight of the evidence. Paragraph 42 is accepted. Paragraph 43 is rejected as repetitive or irrelevant. Paragraph 44 is rejected as not supported by the record cited or irrelevant. Paragraph 45 is rejected as not supported by the record cited or irrelevant. Paragraph 46 is accepted but is irrelevant. Paragraph 47 is rejected as argument and irrelevant. Paragraph 48 is rejected as argument and irrelevant. Paragraphs 49 through 52 are accepted. Paragraph 53 is rejected as contrary to the weight of the credible evidence. Paragraph 54 is accepted. Paragraph 55 is rejected as contrary to the weight of the credible evidence. Paragraph 56 is accepted. With the deletion of the word "only" paragraph 57 is accepted. Paragraph 58 is rejected as contrary to the weight of the credible evidence. Paragraph 59 is rejected as not supported by the record cited. Paragraph 60 is rejected as repetitive or irrelevant. Paragraph 61 is rejected as irrelevant or contrary to the weight of the evidence. Paragraph 62 is accepted. The first sentence of paragraph 63 is accepted; otherwise rejected as irrelevant or not supported by the evidence cited or speculation. Paragraph 64 is accepted. Paragraphs 65 and 66 are rejected as not supported by the record cited. Paragraphs 67 is accepted to the extent that the meeting(s) identified the programs as "weaker." Paragraph 68 is accepted but is irrelevant. Paragraph 69 is accepted but is irrelevant. Paragraphs 70 through 73 are rejected as argumentative, irrelevant, or not supported by record cited. The first sentence of paragraph 74 is accepted; otherwise rejected as argument, irrelevant, or not supported by record cited. Paragraph 75 is rejected as argumentative, irrelevant, or not supported by record cited. The first two sentences of paragraph 76 are accepted; otherwise rejected as not supported record cited or contrary to the weight of evidence. Paragraph 77 is rejected as repetitive, irrelevant, and not supported by record cited. Paragraph 78 is rejected as conclusion of law or irrelevant. Paragraph 79 is rejected as it does not make sense or irrelevant. Paragraph 80 is rejected as contrary to the weight of the evidence. Paragraph 81 is rejected as irrelevant. With the addition of the phrase "or could be" after the word "would," paragraph 84 is accepted; otherwise rejected as contrary to the record cited. Paragraphs 85 and 86 are rejected as contrary to the record cited. Paragraph 87 is accepted. Paragraph 88 is rejected as contrary to the weight of the evidence. Paragraph 89 is repetitive in part but is accepted. Paragraph 90 is rejected as contrary to the weight of the evidence. Paragraph 91 is rejected as irrelevant. Paragraphs 92 and 93 are accepted. Paragraph 94 is rejected as irrelevant. Paragraph 95 is rejected as not supported by the record cited. Paragraph 96 is rejected as repetitive or irrelevant. Paragraph 97 is rejected as irrelevant. Paragraph 98 is rejected as not supported by record cited, contrary to the weight of evidence. Paragraph 99 is rejected as repetitive and irrelevant. Paragraph 100 is rejected as repetitive and irrelevant. Paragraph 101 is accepted. Paragraphs 102 through 105 are rejected as repetitive or irrelevant. Paragraphs 106 through 110 are accepted but are irrelevant. Paragraph 111 is rejected as contrary to the evidence. Paragraphs 112 through 115 are accepted. Paragraph 116 is rejected as argumentative. Paragraph 117 is accepted but is irrelevant. Paragraph 118 is rejected as not supported by record cited. Paragraphs 119 through 122 are accepted. Paragraph 123 is rejected as repetitive. Paragraphs 124 and 125 are accepted. Insert word "contact" after "thirty" in paragraph 125. Paragraph 126 is rejected as irrelevant or argumentative. Paragraph 127 is accepted but is irrelevant. Paragraph 128 is rejected as contrary to the weight of the evidence. Paragraph 129 is accepted. Paragraph 130 is rejected as irrelevant. Paragraphs 131 through 134 are accepted. Paragraph 135 is rejected as contrary to the weight of the evidence. Paragraphs 136 and 137 are accepted with the addition to paragraph 137 that such position was only part-time and not vacant. Paragraph 138 is rejected as irrelevant. Paragraphs 139 through 141 are accepted. Paragraph 142 is rejected as repetitive or irrelevant. Paragraphs 143 through 147 are accepted. Paragraph 148 is rejected as contrary to the weight of the evidence. Paragraphs 149 through 152 are accepted. Paragraph 153 is rejected as not supported by the record cited. Paragraph 154 is rejected as not supported by the record cited. Paragraphs 155 through 160 though repetitive in part are accepted. Paragraph 161 is rejected as contrary to the weight of the evidence. Paragraph 162 is rejected as repetitive, argumentative, or irrelevant. Paragraph 163 is rejected as contrary to the weight of the evidence. COPIES FURNISHED: J. Dana Fogle FOGLE & FOGLE, P.A. 217 East Plymouth Avenue Post Office Box 817 DeLand, Florida 32721-0817 Joseph Egan, Jr. EGAN, LEV & SIWICA, P.A. Box 2231 Orlando, Florida 32802 Margaret T. Roberts COBLE, BARKIN, GORDON, MORRIS & REYNOLDS, P.A. 1020 Volusia Avenue Post Office Drawer 9670 Daytona Beach, Florida 32120
The Issue The issues in this case are (a) whether Respondent committed fraud in seeking to obtain funds from the McKay Scholarship Program, thereby warranting Petitioner's summary suspension of payments to Respondent; and (b) whether Petitioner should revoke Respondent's participation in the McKay Scholarship program for failing to comply with applicable laws.
Findings Of Fact Respondent Muskateer's Academy, Inc. ("MAI") is a Florida corporation that, at all times relevant to this case, operated a private school known as Muskateer's Academy ("Muskateer's"). MAI was closely held by Erick and Jacqueline Cermeno, a married couple. Together, they ran the school, holding (and sometimes swapping) various titles of importance, such as "principal" and "superintendent," which signified their supervisory roles. Located in Hialeah, Florida, Muskateer's served mainly at-risk students who, for one reason or another, were unable or unlikely to succeed in the public school system. On paper, the school's tuition was quite steep. The undersigned infers, however, that few parents, if any, actually paid the "sticker price" for tuition and other expenses that Respondent reported to the Florida Department of Education ("Department") in its student fee schedules, which charges totaled $24,000 per year, per child. Rather, the undersigned infers that, for most students at least, Respondent agreed to accept as payment in full whatever amount was available annually for a particular student under the John M. McKay Scholarships for Students With Disabilities Program ("McKay Scholarship Program"). Respondent operated two separate high schools at Muskateer's. One was a "regular," four-year high school that followed the traditional model, where instructors taught various academic subjects to classes of students, who attended classes for the purpose of learning academic subjects from their teachers. In this high school, tests were given periodically, as a means of measuring the students' mastery of the material. The other program was an "accelerated" high school where each student worked individually, at his own pace. Teachers played a relatively small part in this program, doing little but overseeing the "testing room" in which the students took tests——their primary scholastic activity. Students received course credit for passing tests.1 At the relevant times, there were three or four teachers at Muskateer's. To be a teacher there, a person did not need a bachelor's degree. Instead, MAI was willing to hire individuals having some type of educational background, preferably including at least 40 college credits, more or less. One of the teachers at Muskateer's was Amneris Mesa, whose brother, O. F., attended the school for some period of time. As will be seen, O. F. is one of the key figures in the instant dispute. In August 2006, the Department's Office of Independent Education and Parental Choice ("Choice Office") received a complaint about Muskateer's, the gravamen of which was that MAI was continuing to receive funds under the McKay Scholarship Program for former students who had stopped attending the school. The Choice Office, which administers the McKay Scholarship Program, referred the complaint to the Department's Office of Inspector General ("OIG") for investigation. The OIG's investigation led to the discovery of evidence sufficient to persuade the Commissioner of Education ("Commissioner") that MAI had engaged in fraudulent activity with regard to the McKay Scholarship Program. Consequently, on November 1, 2006, the Commissioner issued an Administrative Complaint against MAI, which charged MAI with fraud and other violations of the laws governing the McKay Scholarship Program. At the same time, the Commissioner immediately suspended all payments to MAI under the McKay Scholarship Program. Being thus cut off from its primary source of revenue, MAI closed Muskateer's on November 18, 2006. As of the final hearing, the school had not reopened. The Commissioner's present case against MAI hinges on allegations that, to induce the payment of funds under the McKay Scholarship Program, the company falsely represented to the Department that three students——O. F., N. P., and C. M.——had "reenrolled" at Muskateer's for the 2006-07 school year, when in fact two of them (O. F. and N. P.) previously had graduated, and the third (C. M.) had dropped out midway through the preceding school year. MAI disputes these allegations, and hence the focus of the hearing largely was on whether the three individuals in question had attended Muskateer's during the 2006-07 school year. Before addressing the contested factual issues, however, a brief examination of the McKay Scholarship Program is in order, to provide context for the findings of fact that will follow. The McKay Scholarship Program affords a disabled student the option of attending a different public school from the one to which he is assigned, or, if he is eligible, the opportunity to receive a scholarship to defray the cost of attending a private school of choice. Once awarded, a McKay scholarship remains in force until the student returns to a public school, graduates, or turns 22, whichever first occurs; provided, however, that he does not drop out, which would render the student ineligible for the scholarship, at least during the period of non-enrollment. To participate in the McKay Scholarship Program, a private school must meet certain conditions as well. Inasmuch as the Commissioner has alleged that MAI failed to comply with some conditions of continued eligibility, the relevant ones will be discussed in greater detail below. For the moment, however, it is sufficient to note that McKay scholarship funding is potentially available to most private schools operating lawfully in the state, for the program is designed to be inclusive in this regard. A private school that wants to participate in the McKay Scholarship Program must notify the Department of its interest and submit information demonstrating compliance with the eligibility requirements. This information——and other data necessary to secure the disbursement of scholarship funds——must be transmitted to the Department electronically, through forms available online to registered users, at a secure website maintained by the Department. To access this site, a private school must first obtain a unique code and establish a confidential password, both of which must be entered correctly in order to logon to the Department's secure web page. If the parent of an eligible student chooses the private school option and secures a place for his child at the private school of choice, then the parent must notify the Department of his decision before the child begins attending the private school. After receiving such notice, the Department verifies the student's enrollment in the private school, obtains from the private school a schedule of the tuition and fees, and receives from the student's school district a "matrix of services" reflecting the student's special educational needs. The maximum amount of the McKay scholarship for a particular student is the lesser of (a) the "calculated amount" (which is roughly equal to the estimated cost of educating the student in the public school to which he is assigned) or (b) the actual amount of the private school's tuition and fees.2 The amount of the student's scholarship is deducted from his public school district's total funding entitlement.3 McKay scholarship payments are made in four equal amounts during the school year to which the scholarship applies. The payment dates are September 1, November 1, February 1, and April 1. Payments are made by warrant payable to the student's parent. The Department mails each warrant to the private school of the parent's choice. The parent is required restrictively to endorse the warrant, authorizing the funds to be deposited only in the private school's account.4 To remain eligible for the McKay scholarship, the student must have regular and direct contact with his teacher(s) at the private school's physical location. Thus, ahead of each payment (after the initial payment), the private school must verify, through the Department's secure, password-protected website, that the student continues to be enrolled in, and to attend, the private school. It is in connection with this ongoing duty to verify continued enrollment and attendance at the private school that MAI is alleged to have engaged in fraudulent activity, namely, reporting to the Department that O. F., N. P., and C. M. were still enrolled in, and attending, Muskateer's when, in fact, they were not. The undersigned will now turn to these allegations, which lie at the heart of this matter. But first: It must be acknowledged that the evidence is in conflict concerning the historical facts relevant to the allegations of fraudulent activity. Given the evidential conflicts, the undersigned supposes that reasonable people might disagree about what happened here. Ultimately, however, it falls to the undersigned, rather than a group of hypothetical "reasonable people," to resolve the evidential conflicts and settle the disputed issues of material fact. Thus, to the extent that any finding below (or herein) is inconsistent with the testimony of one witness or another, or with some documentary evidence, the finding reflects a rejection of all such inconsistent testimony and evidence (none of which was overlooked, disregarded, or ignored) in favor of proof that the undersigned deemed, in the exercise of his prerogatives as the fact-finder, to be more believable and hence entitled to greater weight. O. F. In January 2006, halfway through the 2005-06 school year, O. F. was enrolled as a student of Muskateer's. He began attending the accelerated high school on January 26, 2006. At the same time, his sister, Ms. Mesa, started working for MAI as a teacher in the regular high school. About five months later, O. F. graduated from Muskateer's. O. F. participated in a graduation ceremony on June 3, 2006, and, according to the transcript maintained in his student file, O. F. was awarded a diploma or certificate on that date. The transcript notwithstanding, it is undisputed that O. F. did not actually receive his diploma until several months after his graduation date. MAI contends that it withheld O. F.'s diploma because he had not finished all the tests necessary for graduation. The undersigned finds, however, that the evidence is insufficient to support a finding that O. F. had not finished his degree requirements as of June 3, 2006; indeed, the greater weight of the persuasive evidence is to the contrary. Accordingly, MAI's assertion that O. F. did not graduate from high school at the end of the 2005-06 school year is rejected. On May 26, 2006, MAI reported to the Department, through the Department's secure, password-protected website, that O. F. had reenrolled in Muskateer's for the 2006-07 school year, and that he would resume attending the school on July 1, 2006. On the same date and in the same manner, MAI reported that O. F.'s tuition and fees for the upcoming school year would total $24,000. These representations were made for the purpose of obtaining funds from the McKay Scholarship Program. The foregoing representations regarding O. F.'s reenrollment in Muskateer's for the 2006-07 school year were false. Moreover, the greater weight of the evidence persuades the undersigned that, more likely than not, the individuals responsible for making these representations——namely Mr. And Mrs. Cermeno——actually knew that the representations were false, or they recklessly disregarded the truth or falsity of the matters asserted.5 Despite having graduated, O. F. returned to Muskateer's on three or four occasions in September and October 2006, at which times he took a few tests that he had previously taken and passed. This happened because the Cermenos refused to give O. F. his diploma unless he retook these tests——a condition that was repeated both to O. F.'s mother and his sister (the teacher).6 The undersigned infers that, more likely than not, the Cermenos used the threat of withholding O. F.'s diploma as a means of coercing his "attendance" at Muskateer's during the 2006-07 school year, to create plausible deniability in the event the charge were brought (as it was) that MAI had fraudulently sought to obtain McKay scholarship funds for O. F. At any rate, post-graduation "attendance" such as O. F.'s——to retake exams for no apparent legitimate reason——is not the kind of regular attendance that would support the reasonable inference that the student had enrolled for the 2006-07 school year.7 N. P. N. P. enrolled in Muskateer's on May 3, 2004, and began attending classes in the accelerated high school on August 16, 2004. He graduated (at least in the ceremonial sense) at the end of the 2004-05 school year but never received a diploma. N. P. testified that he never returned to Muskateer's as a student after he (ceremonially) graduated. In other words, N. P. claims that he was not a student of Muskateer's during either the 2005-06 school year or the 2006-07 school year. N. P.'s testimony in this regard is corroborated by the testimony of his aunt (and legal guardian), Altagracia Moreta. Additionally, N. P.'s testimony is corroborated by the absence of well-kept, reliable documentation——such as enrollment registers and attendance records——attesting to his ongoing attendance at Muskateer's after the 2004-05 school year. The undersigned considers the lack of such documentation to be a telling fact. Consequently, although there is conflicting evidence, the undersigned finds that, more likely than not, N. P. did not attend Muskateer's during the 2005-06 and 2006-07 school years, as he testified. On May 4, 2005, MAI reported to the Department, through the Department's secure, password-protected website, that N. P. had reenrolled in Muskateer's for the 2005-06 school year, and that he would resume attending the school on August 8, 2005. On the same date and in the same manner, MAI reported that N. P.'s tuition and fees for the 2005-06 school year would total $24,000. These representations were made for the purpose of obtaining funds from the McKay Scholarship Program. On May 26, 2006, MAI reported to the Department, through the Department's secure, password-protected website, that N. P. had reenrolled in Muskateer's for the 2006-07 school year, and that he would resume attending the school on July 1, 2006. On the same date and in the same manner, MAI reported that N. P.'s tuition and fees for the 2006-07 school year would total $24,000. These representations were made for the purpose of obtaining funds from the McKay Scholarship Program. The foregoing representations regarding N. P.'s reenrollment in Muskateer's for the 2005-06 and 2006-07 school year were false. Moreover, the greater weight of the evidence persuades the undersigned that, more likely than not, the individuals responsible for making these representations——namely Mr. And Mrs. Cermeno——actually knew that these representations were false, or they recklessly disregarded the truth or falsity of the matters asserted. C. M. In July 2004, C. M. registered to attend Muskateer's. He began attending the accelerated high school on August 16, 2004. C. M. testified at hearing (via deposition) that he continued to attend Muskateer's while this proceeding was pending, having been in class there as recently as "yesterday" (January 17, 2007). C. M. did not know what courses he was currently taking or how many other students currently were attending Muskateer's. (Recall that Muskateer's closed its doors on November 18, 2006, and, as of the final hearing, had not reopened).8 Whatever credibility C. M. still possessed after giving testimony such as that just described was shredded when Petitioner impeached him with a prior inconsistent (actually, contradictory) statement. On August 22, 2006, C. M. told the OIG's investigator that he had stopped attending Muskateer's in December 2005 and never returned. The investigator made an audio recording of C. M.'s statement, which was received in evidence, but C. M. was not under oath at the time he gave the statement. The undersigned finds that C. M. is not a believable witness, and his testimony, being unreliable and unpersuasive, is given no weight.9 The documents in C. M.'s disorderly (and seemingly incomplete) student file are likewise insufficient to establish, to the required degree of persuasiveness (namely, that the fact is more likely true than not), the dates on which C. M. attended Muskateer's as an enrolled student. The bottom line is that the evidence is insufficient to permit the undersigned to make a finding as to when (or whether) C. M. stopped attending Muskateer's (prior to its closure on November 18, 2006).10 Lacking sufficient proof regarding the dates during which C. M. attended Muskateer's as a duly enrolled student, it is impossible to determine whether MAI engaged in any fraudulent activity with regard to C. M. Determinations of Ultimate Fact The greater weight of the evidence establishes that, to induce the state to disburse McKay scholarship funds for the benefit of O. F., MAI engaged in fraudulent activity, to wit: MAI intentionally reported to the Department that O. F. had reenrolled in Muskateer's for the 2006-07 school year, while either (a) knowing that this representation of material fact was false or (b) recklessly disregarding the truth or falsity of this material representation, which was, in fact, false. The greater weight of the evidence establishes that, to induce the state to disburse McKay scholarship funds for the benefit of N. P., MAI engaged in fraudulent activity, to wit: MAI intentionally reported to the Department, on separate occasions, that N. P. had reenrolled in Muskateer's for the 2005-06 and 2006-07 school years, while either (a) knowing that these representations of material fact were false or (b) recklessly disregarding the truth or falsity of these material representations, which were, in fact, false. The greater weight of the evidence is insufficient to establish that MAI engaged in fraudulent activity in connection with its efforts to obtain McKay scholarship funds for the benefit of C. M. The greater weight of the evidence establishes that, by failing to keep and maintain complete and orderly records of enrollment and attendance, MAI failed to meet its obligation under Section 1002.39(8)(a), Florida Statutes, to comply with all of the requirements set forth in Section 1002.421, which mandates that private schools participating in the McKay Scholarship Program must, among other things, conform to all the requirements outlined in Section 1002.42, Florida Statutes, including Section 1002.42(4), which directs that private schools must prepare and keep attendance records in accordance with the provisions of Section 1003.23(2), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner enter a final order (a) suspending payment of McKay Scholarship funds to MAI in connection with the 2006-07 school year (b) revoking MAI's participation in the McKay Scholarship Program. DONE AND ENTERED this 2nd day of April, 2007, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 2nd day of April, 2007.
The Issue Whether the actions taken by the superintendent and staff of the Duval County School Board prior to December 1, 1974, were sufficient to achieve comparability pursuant to the provisions of Title I of the Elementary and Secondary Education Act of 1965, as amended.
Findings Of Fact Congress amended the Elementary and Secondary Education Act of 1965 by Public Law 91-230 instituting a project referred to as the Title I Program. The Respondent, Department of Education, has the responsibility of administering the Title I Program and dispensing federal funds to the various school districts throughout the State of Florida. Petitioner, Duval County School Board, is a large urban school district of some 112,000 students and 10,000 employees. There are 134 schools in the district of which 28 are designated as E.S.E.A. Title I Project Schools. The statute under consideration is 20 U.S.C.A. Sec. 241(e): "(a) A Local educational agency may receive a grant under this sub-chapter for any fiscal year only upon application therefore approved by the appropriate State educational agency, upon its determination (consistent with such basic criteria as the Commissioner may establish) . . . (3) That . . .(c) state and local funds be used in the District of such agencies to provide services in project areas which, taken as a whole, are at least comparable to services being provided in areas in such districts which are not receiving funds under this sub-chapter: . . . provided further, That each local educational agency receiving funds under this sub-chapter shall report on or before July 1, 1971 and on or before July 1 of each year thereafter with respect to its compliance with this clause; . . ." The regulation under consideration which was promulgated to implement the statute is Regulation Sec. 116.26, a part of which reads: "(a) A state educational agency shall not approve an application of a local educational agency for a grant under section 141(a) of the Act, or make payments of Title I funds under a previously approved application of such agency, unless that local educational agency has demonstrated, in accordance with paragraph (c) of this section, that services provided with State and local funds in title I project areas are at least comparable to the services being provided with State and local funds in school serving attendance areas not designated as Title I project areas. Such approval shall not be given unless the local educational agency also provides the assurances and the additional information required' by paragraph (e) of this section with respect to the maintenance of comparability. For the purpose of this section, State and local funds include those funds used in the determination of fiscal effort in accordance with Section 116.45." 116.26(c) "If any school serving a Title I Project Area is determined not to be comparable under this paragraph, no further payments of Title I funds shall be made to the local educational agency until that agency has taken the action required by paragraph (k)(1) of this section to overcome such lack of comparability." Regulation Sec. 116.26(k)(1) in part reads: "that such local educational agency has allocated or reallocated sufficient additional resources to Title I Project Areas so as to come into compliance with such requirements and has filed a revised comparability report reflecting such compliance." Petitioner, Duval County School Board, has been the recipient of Title I funds on a year to year basis since 1965, but was deemed by the Respondent to be in violation of the federal requirements from December 1, 1974 through January 2, 1975 for the reason that Petitioner had not "achieved comparability" for that period of time. Funds withheld from Petitioner, in excess of $325,000 are involved in this hearing. The following sequence of events are pertinent: On or about July 1, 1974, the Duval County application for Fiscal Year 1974 was filed and approved based on the assurance that comparability existed in Duval County and would be maintained throughout the 1974-75 school year. On or about September 27, 1974, the Respondent advised local school districts that October 1, 1974 was the date for collecting the data on which the comparability report for Fiscal Year 1975 would be based. On October 7 and 8, 1974, and again on November 7 and 8, 1974, conferences and meetings were held with representatives of various school boards, including those of the Petitioner. The purpose of these meetings and conferences was to inform these school boards concerning the requirements of achieving and maintaining comparability. On November 20, 1974, in a memorandum from Woodrow J. Darden marked "URGENT" the Respondent advised all Superintendents, the Finance Officers and Title I Coordinators that the comparability reports were due on or before December 1, 1974. A part of said memorandum stated: "If the comparability report submitted by your district did not meet the measures to determine comparability as outlined in the Federal Regulations, administrative or Board action for the purpose of reallocating resources should be taken on or before December 1, 1974, to bring the schools into compliance." The date of December 1, 1974 is established by Regulation 116.26(b)(7). On November 26 and 27, 1974, the Superintendent authorized a reallocation of instructional staff and authorized budgetary transfers to bring Petitioner up to the required level of comparability. On December 1, 1974, Petitioner filed its report. On December 17, 1974, the Director, Special Projects, received a copy from Department of Education of a MAILGRAM from Robert R. Wheeler, Acting Deputy Commissioner for School Systems, United States Office of Education to Honorable Ralph Turlington, stating: "this is to remind you that your agency is required under Title I of the Elementary and Secondary Education Act not to make any further payments as of December 1 to any local educational agency that has not as of that date complied with the comparability requirements in 45 CFR 116.26 and to notify each such agency not to obligate any Title I funds after that date. Compliance with this requirement is subject to Federal Audit. Your continued cooperation is appreciated." By a letter dated December 18, 1974, the Respondent notified Petitioner funds were being withheld for the period of December 1 through December 16, 1974. An audit was conducted by Petitioner following the withholding of funds of December 18, 1974, and this audit revealed that comparability had still not been achieved. A revised report dated December 27, 1974 indicated that additional personnel still were needed to meet comparability requirements. Pursuant thereto additional personnel reported to work on or about January 2, 1975. By a letter dated January 16, 1975, the Respondent rescinded the prior authorization that had permitted the resumption of the use of Title I funds as of December 16, 1974 and extended the period of withholding of Title I funds through January 1, 1975. Following the notification to Petitioner that the funds were being withheld, the Petitioner requested a hearing in order to appeal the withholding of the Title I funds for the period of December 1, 1974 through December 16, 1974. This request for a hearing was later amended to include the period of time from December 15, 1975 through January 1, 1975. Petitioner contends: That it complied with the requirements of the subject statute and regulation when it unconditionally committed itself on November 26, 1974 to the employment of necessary personnel by the establishment and budgeting of all necessary positions and direction that such positions be filled. Petitioner further contends that good faith on its part and substantial compliance is all that the statute and regulation require. Respondent contends: That the subject statute and regulation require that compliance with the comparability requirements is a continuing state of being and must be maintained throughout the year. Respondent further contends that the Federal statute and regulation require not only that the positions be budgeted and directions be given to employ but that the positions be actually filled and the personnel on the job on or before the filing of the report required by Regulation 116.26(b)(7). The Hearing Officer further finds: That both Petitioner and Respondent have demonstrated a dedication and concern for the schools within their respective jurisdictions; That both Petitioner and Respondent have been diligent in trying to act within the provisions of the subject statute and regulations; That the personnel of both the Petitioner and Respondent are familiar with the requirements of the statute and regulation but the federal requirements are subject to different interpretations by reasonable persons. There was no meeting of the minds of the parties from the federal, state and local governmental units as to the required method of compliance with the laws.
