The Issue The issue to be resolved in this proceeding concerns whether the Respondent, Sherry Mixon, should be terminated for cause by the Petitioner, the Escambia County School Board (Board).
Findings Of Fact The Respondent was employed, by the Board, as a teacher's assistant for special needs or handicapped students. In obtaining such employment the Respondent had to complete employment application documents which contained a question concerning her prior medical or physical history as to whether she had any injuries or a debilitating condition. She failed to disclose that she had a prior back injury and associated workers' compensation claim and that therefore she had some degree of physical disability. The job duties of teacher's assistant for special needs students require a teacher's assistant to be in relatively good physical condition. It is a condition and necessary part of the consideration of whether to hire such a teacher's assistant. If he or she has any prior injury or physical condition, such might reflect on his or her ability to physically handle students in appropriate ways, protecting herself or others from injury. A certain physical ability is required for this employment position because, in working with handicapped students, the teacher's assistant needs to be able to physically and safely intervene between violent handicapped students. Thus, the inquiry on the employment application documents concerning prior physical conditions or injuries is directly relevant to the decision of whether or not to hire such a person. The testimony of Kevin Windham as well as the evidence gleaned from the Petitioner's Exhibits one through six, established that the Respondent was hired as a teacher's assistant. After she experienced an accident or injury on a bus, and while delving into her health situation, the Board learned of her prior workers' compensation back injury. It therefore also learned that she had failed to disclose that prior injury on her employment application. The Board needs to know of any prior injuries in order to know whether an applicant for a position meets the physical qualifications for that position and is thus fit for duty. The safety of the job applicant or students or other persons might be placed at risk if an injured or physically unfit person is hired for certain positions such as teacher's assistant for special needs or handicapped students. The facts requested in the question on her application, which she failed to answer, therefore amounted to a condition on the offer of employment to the Respondent. The Respondent thus failed to establish that she was truly physically qualified for the job position in question, by not disclosing her prior injury. Moreover, by knowingly failing to answer this inquiry on her job application documents, the Respondent committed an act of dishonesty, both of which facts constitute misconduct in office. Thus, good cause for termination has been established.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witness, and the pleadings and arguments of the party, it is, therefore, RECOMMENDED: That a final order be entered by the School Board of Escambia County terminating the Respondent, Sherry Mixon, for good cause. DONE AND ENTERED this 11th day of July, 2006, in Tallahassee, Leon County, Florida. S 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of July, 2006. COPIES FURNISHED: Joseph L. Hammons, Esquire Hammons, Longoria & Whittaker, P.A. 17 West Cervantes Street Pensacola, Florida 32501-3125 Scherry Mixon 222 Ruby Avenue Pensacola, Florida 32505 Jim Paul, Superintendent Escambia County School Board 215 West Garden Street Pensacola, Florida 32502-5728
The Issue At issue in this proceeding is whether Petitioner's lottery prize is subject to an outstanding debt to a state agency.
Findings Of Fact By letter of June 9, 1997, the Department of Education, Office of Student Financial Assistance (Department), notified the Department of the Lottery (Lottery) that Petitioner owed the Department $26,356.28, as of June 9, 1997, as a consequence of outstanding defaulted student loans. Thereafter, pursuant to Section 24.115(4), Florida Statutes, the Lottery transmitted the prize amount ($24,781.66), less Federal income tax withheld ($6,938.86), to the Department. By letter of June 10, 1997, the Department notified Petitioner that it was in receipt of his prize money, less Federal income tax withheld, and that, since the amount owed the Department exceeded the amount of the prize, it planned to apply the entire sum it had received ($17,842.80) to the outstanding indebtedness. The Department's letter also advised Petitioner of his right to request a formal hearing pursuant to Section 120.57, Florida Statutes, to contest the Department's decision. Petitioner filed a timely request for a formal hearing to contest the Department's decision, and the matter was referred to the Division of Administrative Hearings for the assignment of an administrative law judge to conduct the formal hearing Petitioner had requested. At hearing, the proof demonstrated that Petitioner was the recipient of three student loans, each of which was funded by Centrust Savings Bank (Centrust) and guaranteed by the Department. The first loan (No. 7701) was in the amount of $3,000, which was disbursed on December 19, 1986. The second loan (No. 557720) was in the sum of $5,000, which was disbursed on January 29, 1987. The third loan (No. 631534) was for $5,000; however, only $2,500 was disbursed. That disbursement occurred on November 26, 1987. Petitioner defaulted on the student loans, and Centrust filed a claim with the Department. The Department, as guarantor, paid the lender the amounts due on the loans as follows: A.) On August 12, 1993, the Department paid the claim on Loan No. 557720. At the time, the principal due was $5,021.562 and interest due was $1,942.59, for a total of $6,964.15. B.) Also on August 12, 1993, the Department paid the claim on Loan No. 631534. At the time, the principal due was $2,510.78, and interest due was $971.29, for a total of $3,482.07. C.) Finally, on January 20, 1994, the Department paid the claim on Loan No. 7701. At the time, the principal due was $3,118.28, and interest due was $2,458.40, for a total of $5,576.68. As of June 9, 1997, the date the Department received the proceeds of Petitioner's lottery prize, the balance due on the defaulted loans, with accrued interest, was as follows: Loan No. 7701, $7,842.80; Loan No. 557720, $9,096.52; and Loan No. 631534, $4,548.25. In total, as of June 9, 1997, Petitioner owed the Department $21,487.57, as principal and accrued interest owing on the defaulted loans.3
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which approves the application of the $17,842.80 of Petitioner's lottery prize the Department received toward the partial satisfaction of the debt owing the Department. DONE AND ENTERED this 21st day of January, 1998, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 21st day of January, 1998.
The Issue Whether Petitioner has defaulted on student loans and, if so, the principal amounts of the loans, any accrued interest, and any collection costs. Whether Petitioner's employer should be required to withhold payments from Petitioner's pay pursuant to Section 112.175, Florida Statutes.
Findings Of Fact As will be set forth in more detail, there are three loans at issue in this proceeding. For ease of reference, these loans will be referred to as Loans One, Two, and Three.2 Loans One and Three were issued as Florida Guarantee Student Loans, which are popularly known as Stafford Loans. Loans Two and Four were supplemental loans issued by the Student Loan Services program, which are referred to SLS loans. Loans One, Two, and Three were funded and are at issue in this proceeding. THE STAFFORD LOANS, LOANS ONE AND THREE On September 22, 1986, Petitioner executed an Application and Promissory Note for a Guaranteed Student Loan, number 545967. This Stafford Loan, referred to as Loan One, was in the amount of $5,000. Loan One was disbursed in two equal installments of $2,500 (less appropriate fees). The first installment was disbursed on or about December 4, 1986, and the second installment was disbursed on or about December 11, 1986. On June 1, 1987, Petitioner executed an Application and Promissory Note for a Guaranteed Student Loan, number 586917. This Stafford Loan, referred to as Loan Three, was in the amount of $2,261.00. Loan Three was disbursed in one installment of $2,261.00 (less appropriate fees) on June 25, 1987. The promissory notes and other paper work documenting Loan One and Loan Three provided that interest at the rate of 8% per annum would begin to accrue on these loans six months after Petitioner ceased to attend school on at least a half-time basis. Because a Stafford Loan is guaranteed by the federal government, the obligor may be eligible to receive periods of deferment and periods of forbearance during which the federal government may or may not make interest payments. If the federal government made interest payments during a particular period, Petitioner is not obligated for interest during that period. If the federal government did not pay interest during a particular period, Petitioner is obligated to pay interest for that period. Respondent is not claiming any interest on Loans One and Three for any period while interest was paid by the federal government. While Petitioner was attending school on at least a half-time basis and for six months thereafter (the grace period), Loans One and Three were in periods of forbearance, and the federal government paid the interest for both loans. Petitioner ceased attending school on at least a half-time basis on March 18, 1988. The six month grace period on Loans One and Three ended on September 18, 1988, which is the date interest began to accrue on Loans One and Three. As of that date, the principal balance due on Loan One ($5,000.00) and on Loan Three ($2,261.00) totaled $7,261.00. Between September 18, 1988, and January 23, 1997, interest accrued on Loans One and Three in the total amount of $4,744.75, as follows: Between September 18, 1988, and June 15, 1993, interest accrued on these two loans in the total amount of $2,754.80. Between June 16, 1993, and October 6, 1993, interest accrued on these two loans in the total amount of $245.87. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between October 7, 1993, and January 7, 1994, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between January 8, 1994 and January 31, 1994, interest accrued on these two loans in the total amount of $51.73. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between February 1, 1994, and April 30, 1994, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between May 1, 1994, and July 24, 1994, interest accrued on these two loans in the total amount of $189.88. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between July 25, 1994, and April 30, 1995, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between May 1, 1995, and December 1, 1995, interest accrued on these two loans in the total amount of $492.65. Both loans were in a period of forbearance, but the federal government did not pay the interest. Between December 2, 1995, and January 23, 1997, interest accrued on these two loans in the total amount of $1,009.82. Petitioner defaulted on the repayment of Loan One. Petitioner has not made any principal or interest payment since the loan was disbursed. Petitioner defaulted on the repayment of Loan Three. Petitioner has not made any principal or interest payment since the loan was disbursed. On January 23, 1997, Respondent purchased Loan One and Loan Three.3 As January 23, 1997, the principal and the accrued interest for Loan One, plus the principal and the accrued interest for Loan Three, totaled $12,005.75. THE SLS LOAN: LOAN TWO On January 31, 1987, Petitioner executed Auxiliary Loan Application and Promissory Note number 8914 for a supplemental student loan through the Student Loan Services program (Loan Two). This type loan, generally referred to as an SLS loan, was in the principal amount of $4,000.00. Loan Two was disbursed in one installment of $4,000.00 (less appropriate fees) on or about April 9, 1987. The promissory notes and other paper work documenting Loan Two provided that interest at the rate of 12% per annum would begin to accrue upon disbursement. SLS loans also provide for periods of deferment and forbearance during which no payment is due. The federal government does not make interest payments during a period of deferment or forbearance. The borrower is obligated to pay all of the interest from date of disbursement.4 Petitioner defaulted on the repayment of Loan Two. Petitioner has not made any principal or interest payment since the loan was disbursed. Respondent purchased Loan Two from the holder on September 11, 1997.5 Interest in the amount of $7,348.91 accrued on Loan Two between April 9, 1987, the date the loan was disbursed, and September 11, 1997. The total principal balance and accrued interest for Loan Two as of September 11, 1997, was $11,348.91. COLLECTION COSTS Section 682.410(b)(2) of Title 34, C.F.R., provides that Respondent shall impose collection costs, as follows: (2) Collection charges. Whether or not provided for in the borrower's promissory note and subject to any limitation on the amount of those costs in that note, the guaranty agency shall charge a borrower an amount equal to reasonable costs incurred by the agency in collecting a loan on which the agency has paid a default or bankruptcy claim. These costs may include, but are not limited to, all attorney's fees, collection agency charges, and court costs. Except as provided in §§ 682.401(b)(27) and 682.405(b)(1)(iv), the amount charged a borrower must equal the lesser of-- The amount the same borrower would be charged for the cost of collection under the formula in 34 CFR 30.60; or The amount the same borrower would be charged for the cost of collection if the loan was held by the U.S. Department of Education. Respondent established that the amount of the annual collection cost mandated by 34 C.F.R. 682.410(b)(2) for each defaulted loan at issue in this proceeding should be calculated at the rate of 25% of the outstanding principal and accrued interest. PRINCIPAL, INTEREST, AND COLLECTION COSTS AS OF JUNE 1, 1998 Respondent calculated the principal, interest, and collection costs for each loan as of June 1, 1998. For Loan One the amount of the collection costs assessed by the Respondent was $2,231.60. Interest that accrued between January 23, 1997, and June 1, 1998, totaled $895.13. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $11,394.01. For Loan Two the amount of the collection costs assessed by the Respondent was $2,961.20. Interest that accrued between September 11, 1997, and June 1, 1998, totaled $981.29. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $15,291.39. For Loan Three the amount of the collection costs assessed by the Respondent was $1,009.13. Interest that accrued between January 23, 1997, and June 1, 1998, totaled $404.78. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $5,152.39. The total amount due from Petitioner as of June 1, 1998, for Loans One, Two, and Three for principal, interest, and collection costs is $31,837.79. WAGE WITHHOLDING Petitioner is a social worker employed by Dade County, a political subdivision of the State of Florida. As an employee of a political subdivision of the State of Florida, Petitioner is subject to the provisions of Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. These provisions pertain to employees of the State of Florida or its subdivisions who have defaulted on an education loan made or guaranteed by the State of Florida. Respondent notified Petitioner in writing by letter dated October 1, 1997, that Loans One, Two, and Three were in default and offered him the opportunity to make voluntary payments on these loans. The letter also advised Petitioner that the Respondent would seek to make involuntary withholdings if he did not make voluntary payments. Petitioner thereafter elected to request the formal hearing that triggered this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order that adopts the findings of fact and conclusions of law contained herein, finds that Petitioner, as of June 1, 1998, owes the sum of $31,837.79, and orders the involuntary wage withholding of Petitioner's pay through his employer, Dade County, Florida, pursuant to Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. DONE AND ENTERED this 7th day of August, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 August, 1998
The Issue The issues in this case are: Whether Respondent, Everest University (the "School"), discriminated against Petitioner, Hashim Aboudaya, on the basis of his place of natural origin (Middle Eastern), race (Caucasian), and/or religion (Muslim) in violation of the Florida Civil Rights Act by twice failing to promote Petitioner to the position of associate dean or director of Student Services; and Whether the School retaliated against Petitioner based on his place of natural origin, race, and/or religion by refusing to pay for his doctoral level college courses.
Findings Of Fact Petitioner is a Caucasian male, born in Lebanon and, therefore, of Middle Eastern heritage. He is a practicing Muslim. In July 2003, Petitioner began teaching as an adjunct professor at the School, teaching computer information services and teaching a few classes per year. In or around August 2007, Petitioner was promoted to senior network administrator, a non-teaching position, for the School. At all times relevant hereto, Petitioner served in that position. He currently teaches classes on an as-needed basis also. The School is a private college formerly known as Florida Metropolitan University. There are ten related campuses in the State of Florida, with one being in Melbourne, Brevard County, Florida. The Melbourne campus has two locations, one on Sarno Road and the "main" campus on U.S. Highway 1. Petitioner holds two master's degrees, one in management and one in computer resources and information management, from Webster University in Saint Louis, Missouri. He is pursuing a third master's degree, but it is "on hold" pending his completion of studies in a doctoral program. The doctoral program being sought by Petitioner is in the field of business administration with a major field of study in computer security. The degree is being pursued on-line through Capella University based in Minneapolis, Minnesota. Petitioner's resume indicates that the Ph.D. will be "done in the end of 2007," but it has obviously taken longer than planned. Petitioner has applied for several vacancies listed at the School, but for purposes of this proceeding, the following are relevant: (1) The associate academic dean position advertised in January 2010; (2) The associate academic dean position advertised in April 2010; and (3) The director of Student Services position advertised in August 2009. Associate Academic Dean Positions The following qualifications were specified in the School's job description for the associate academic dean positions. The applicant must: Possess the necessary academic credentials and work related experience mandated by the Company, State accreditation agencies and any other regulatory agency that monitors compliance. Have a minimum of 2 years practical work experience in business or education. Have a minimum of 1 year teaching experience, but The years of experience may be waived at the sole discretion of the college president so long as the incumbent meets the accreditations, State and Federal requirements necessary to hold the position. There was also a job posting (as opposed to a job description) for the associate dean position on a website associated with Corinthian Colleges, Inc. ("CCI"), the School's parent company. That job posting indicated that a master's degree was required for the job and included other requirements not set out in the School's official job description. The college president, Mark Judge, could not verify the accuracy of the job posting. There is no persuasive, credible evidence that the job posting was produced by the School or intended to be used as the basis for filling the associate dean position. The first associate dean position was for the Sarno Road site which housed the School's allied health programs, e.g., medical assistant training, pharmacy technician associate degrees, medical insurance billing and coding, and healthcare administration. Besides the requirements set forth in the job description, the School was looking for someone with health- related experience as well. Terri Baker, a registered nurse, was ultimately hired to fill the associate dean position. Baker had approximately 20 years of experience with the School. During that time, Baker had taught classes in the allied health program, had served as a program director, and was an associate dean at other campuses within the CCI system. Baker does not hold a master's degree, but the job description issued by the School does not require that level of education. The job posting, which appeared in a publication issued by the School, does say that a master's degree is required, but there is no competent and substantial evidence to suggest the job posting supersedes the job description. Notwithstanding her level of schooling, it is clear Baker was a perfect fit for the job. The decision to appoint her, rather than Petitioner, to the position was based on factors other than race, national origin or religion. The second associate dean position was advertised in the Spring of 2010. The job description for that job is the same as the previous associate dean position. However, there are many different duties and expectations associated with the second position. For example, while the first position was related directly to the allied health programs at the School, the second position had a different focus. The person filling this position would be working on the main Melbourne campus, rather than the satellite campus. His or her duties would be directed toward tasks such as transfer of credit analysis, scheduling, and registering new students. The dean would also be responsible for monitoring the School's compliance with accreditation standards and internal audit standards. Betty Williams was hired to fill the second associate dean position. Williams had significant management experience in academic settings. She had served as an academic dean for one of the School's competitors and had extensive knowledge and experience with compliance accreditation standards. As compared to Petitioner, Williams was a much better fit for the position. Her experience would allow her to step into the position and begin working on problems immediately without the necessity of a period of training and acclimation. Director of Student Services Position The director of Student Services was expected to help students who were experiencing hardships in their academic progress. The director would help students who were forced to withdraw from school for financial or other personal reasons. He/she would provide support for students taking online classes and assist students trying to re-enroll into school following dismissal or withdrawal. A close working relationship with students was an important factor in this position. The School's job description listed the following requirement for the director of Student Services position: Bachelor's degree required Minimum of 3 years practical work experience or equivalent training Excellent communication and customer service skills Excellent computer skills The person who ultimately was hired for this position, Stacey Jacquot, was an outstanding employee at the School and had been selected as its Employee of the Year in two different positions. Jacquot is a Caucasian female; neither her religion, nor her place of natural origin was alluded to at final hearing. The hiring of Jacquot, as opposed to Petitioner, for this position was based on Jacquot's experience and background. She had worked in the student services department for the school as both an online coordinator and as a re-entry coordinator. Thus, her experience was directly related to the requirements of the position. Petitioner provided unsubstantiated testimony that by virtue of his teaching a number of classes over the past few years, he has some experience in counseling students concerning their issues. However, even if true, his experience did not match that of Jacquot. Request for Reimbursement for Doctoral Coursework Petitioner alleges retaliation by the School. The specific retaliatory action was the denial of his request to be reimbursed for coursework as he pursued a doctorate degree. In February 2010, Petitioner submitted a request to the School, asking that tuition expenses for his coursework be paid under the School's tuition reimbursement program. The program is set forth in policies maintained by the School and is available to "eligible employees for eligible classes." A benchmark for reimbursable tuition is that the courses being taken enable the employee to be more efficient in a current role or prepare them for a role at the next level of their employment. There are a number of written policies addressing the tuition reimbursement program. Those policies are fluid and have changed from time to time over the past few years. The policies are implemented and overseen by the director of Organizational Development for CCI, Jeanne Teeter. Teeter resides and works in California, corporate home of CCI. It is Teeter's duty to ultimately approve or deny all requests for tuition reimbursement by employees of all of CCI's colleges around the country. Teeter reviewed Petitioner's request for tuition reimbursement pursuant to a preliminary approval by the School's president, Mark Judge. It was Judge's initial decision to approve Petitioner's request, but Judge sent it to Teeter for a final decision. Teeter had never met Petitioner and did not know anything about him, except as found in his personnel file and his application for tuition reimbursement. Teeter, as was her normal procedure, considered the relevance of the degree being sought, not only to Petitioner's current role, but as to potential future roles as well. Because the course work for which reimbursement was being sought related to an advanced degree, a doctorate, Teeter was less inclined to approve it. Approval would necessitate a clear line of sight between the employee's current role to a role that would require a Ph.D. Inasmuch as Petitioner's role as senior network administrator did not require a doctorate and there was no clear line of sight between his present position and that of a professor or management employee requiring one, Teeter declined the request. At the time she made her decision, Teeter was not aware that Petitioner had made a discrimination claim against the School. Her decision, therefore, could not be retaliatory in nature. Rather, she acted in concert with the policies that address tuition reimbursement and made a decision based solely upon those policies. Petitioner appears to be an energetic and hard-working member of the School's staff. His testimony was credible, but was sometimes off the point. Although he is a well-educated person with three college degrees and is pursuing others, it is clear that English is his second language.1/ Petitioner seemed to be sincere in his belief that he was discriminated against, but did not provide persuasive evidence to support that claim.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Commission on Human Relations dismissing the Petition for Relief filed by Hisham Aboudaya in its entirety. DONE AND ENTERED this 21st day of November, 2011, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 21st day of November, 2011.
The Issue The issues to be determined are whether Respondent violated section 456.072(1)(k), Florida Statutes, by failing to repay a student loan issued or guaranteed by the state or the Federal government in accordance with the terms of the loan as alleged in the Administrative Complaint; and, if so, the appropriate penalty.
Findings Of Fact The Department of Health, Bureau of Emergency Medical Oversight, is the state agency charged with the investigation and prosecution of complaints against licensed paramedics pursuant to chapters 456 and 401, Florida Statutes. At all times material to this proceeding, Respondent was a paramedic in the state of Florida, holding certificate number PMD 16223. Respondent’s license is currently active and does not expire until December 1, 2018. Respondent’s current address of record is 763 Tumblebrook Drive, Port Orange, Florida 32127. The Florida Department of Education (DOE) is the state agency responsible for guaranteeing student loans in cooperation with the United States Department of Education under the Federal Family Education Loan Program. As the guarantor of a student loan, DOE is bound to purchase the debt of a borrower who fails to satisfy their loan obligations. On July 7, 1993, Respondent executed an “Application/Promissory Note for a Florida Stafford Loan” with a requested loan amount of $3,500.00. The stated purpose of the loan was “for [Respondent’s] attendance at Daytona Beach Community College [DBCC] for the term(s) that begins on 8/93 and ends on 4/94.” The lender was Chase Manhattan Bank, Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to DBCC on Respondent’s behalf for his tuition, fees, and educational expenses. On January 7, 1994, Respondent executed an “Application and Promissory Note for Federal Stafford Loans” for a subsidized Federal Stafford Loan, with a requested loan amount of $1,750.00, with a loan period of January 1994 to May 1994. Pursuant to the Borrower Certification and School Certification, the loan proceeds were for Respondent’s attendance at DBCC. The lender was “Chase,” Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to DBCC on Respondent’s behalf for his tuition, fees, and educational expenses. On June 1, 1994, Respondent executed an “Application and Promissory Note for Federal Stafford Loans” for a subsidized Federal Stafford Loan, with a requested loan amount of $3,500.00, with a loan period of August 1994 to May 1995. Pursuant to the Borrower Certification and School Certification, the loan proceeds were for Respondent’s attendance at DBCC. Respondent requested a deferment of repayment for applicable in-school and grace periods. The lender was Chase Manhattan Bank, Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to DBCC on Respondent’s behalf for his tuition, fees, and educational expenses. On May 30, 1995, Respondent executed an “Application and Promissory Note for Federal Stafford Loans” for a subsidized Federal Stafford Loan, with a requested loan amount of $3,500.00, with a loan period of August 1995 to “end of deferment.” The loan proceeds were for Respondent’s attendance at DBCC. Respondent requested a deferment of repayment for applicable in- school and grace periods. The lender was Chase Manhattan Bank, Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to DBCC on Respondent’s behalf for his tuition, fees, and educational expenses. On August 19, 1996, Respondent executed an “Application and Promissory Note for Federal Stafford Loans” for a subsidized Federal Stafford Loan, with a requested loan amount of $3,500.00, with a loan period of August 1996 to May 1997. The loan proceeds were for Respondent’s attendance at Valencia Community College on Respondent’s behalf for his tuition, fees, and educational expenses. Respondent requested a deferment of repayment for applicable in-school and grace periods. The lender was Chase Manhattan Bank, Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to Valencia Community College. On August 22, 1997, Respondent executed an “Application and Promissory Note for Federal Stafford Loans” for a subsidized Federal Stafford Loan, with a requested loan amount of $3,500.00, with a loan period of August 1997 to May 1998. The loan proceeds were for Respondent’s attendance at DBCC. Respondent requested a deferment of repayment for applicable in-school and grace periods. The lender was Chase Manhattan Bank, Lender Code 807807. The loan proceeds were, as is normal for student loans, paid directly to DBCC on Respondent’s behalf for his tuition, fees, and educational expenses. Between August 22, 1997, and June 14, 2005, the evidence demonstrates that Respondent made no payments on any of the above-referenced loans. On June 14, 2005, Respondent filed an on-line Federal Consolidation Loan Application and Promissory Note by which Respondent consolidated his outstanding student loans. By the time the loans were being consolidated, they were held by the Sallie Mae Trust. Respondent’s total loan amount after consolidation was $17,500.00. Pursuant to the Loan Consolidation Disclosure Statement and Repayment Schedule, the first of 180 monthly payments of $128.751/ on the consolidated student loans was scheduled for August 21, 2005. DOE was the guarantor of all of Respondent’s student loans, including the consolidated student loan. The Federal Family Education Loan Program Claim Form demonstrates that Respondent received a deferment of payment for 59 months, followed by forbearance from payment of 63 months -- a total of 10 years and two months. As a result, Respondent’s payment due date was extended to October 21, 2015. In the more than 25 years since Respondent made application for his first student loan, he has yet to repay any of the loan proceeds paid to DBCC and Valencia Community College on his behalf for tuition, fees, and educational expenses. An educational loan default occurs when a borrower fails to make required payments on a loan for 270 days. On November 3, 2016, having received no payments from Respondent on his loan since payments became due on October 21, 2015, the lender submitted a default claim to DOE. On November 10, 2016, DOE determined Respondent defaulted on his student loan obligations and purchased Respondent’s debt from the lender. At the time of the default, Respondent’s full $17,500.00 principal balance remained, as well as $3,794.90 of capitalized interest and $995.71 of unpaid interest. Respondent has made no payments against his student loan obligations since DOE purchased his student loan obligations on November 10, 2016.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health, Bureau of Emergency Management Oversight, enter a final order: finding that Respondent failed to repay a student loan issued or guaranteed by the state or the Federal government in accordance with the terms of the loan; imposing a suspension of Respondent’s paramedic certification until new loan payment terms are agreed upon, followed by probation for the duration of the student loan; imposing a fine equal to 10 percent of the defaulted loan amount calculated as of the date of the Final Order, to be deposited into the Medical Quality Assurance Trust Fund; and requiring Respondent to pay the costs related to the investigation and prosecution. DONE AND ENTERED this 12th day of September, 2018, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 12th day of September, 2018.
The Issue The issues in these consolidated cases are as follows: (1) whether Respondents employed Lorene Walker, who had contact with scholarship students and who did not meet the requisite criteria to pass the Level 2 background screening as required by section 1002.421(1)(m) and (p), Florida Statutes (2019), and if so, what is the appropriate remedy; and (2) whether Respondents engaged in fraud in violation of section 1002.421(3)(d) and, if so, whether Petitioner should revoke Respondents' participation in several Florida Scholarship Programs.1
Findings Of Fact Parties, People, and Programs The Department is the government agency charged with administering numerous state scholarship programs pursuant to section 1002.421, Florida Statutes. The Department operates or has administrative responsibilities for the Gardiner Scholarship Program, the John M. McKay Scholarships for Students with Disabilities Program, the Florida Tax Credit (FTC) Scholarship Program, and the Family Empowerment Scholarship Program. See §§ 1002.385, 1002.39, 1002.394, and 1002.395, Fla. Stat. The Gardiner, McKay, FTC, and Family Empowerment scholarships defray tuition and other qualified educational expenses for eligible students who attend charter, private, or other eligible schools in the state of Florida. The Department also operates or administers the Hope Scholarship Program, which provides tuition assistance to victims of school bullying so that they can enroll in another school. See § 1002.40, Fla. Stat. The scholarship funds are awarded to eligible students to be used at eligible schools. The Commissioner is the agency head of the Department and has the authority to revoke or suspend a school's eligibility to receive scholarship monies on behalf of eligible students. The Independent Education and Parental Choice Office, also referred to as the School Choice Office (Office), is a section of the Department which oversees several school choice options outside Florida's public school system. The Office also oversees the administration of various scholarships programs under chapter 1002. The Office is in regular contact with schools that participate in these scholarship programs. Respondents have been operating as private schools for approximately six years. Since the 2013/2014 school year, they have been found eligible and participated in numerous scholarship programs pursuant to section 1002.421. Respondents operate two campuses: (1) School Code No. 4015 located at 1056 North Pine Hills Road, Orlando, Florida (Pine Hills Campus); and (2) School Code No. 8827 located at 5308 Silver Star Road, Orlando, Florida (Silver Star Campus). The Schools serve 40 to 50 scholarship students and receive approximately $200,000 per year in scholarship funds. Judith Shealey is the owner of the Schools. She carries the title of Executive Director, Principal, Headmistress, and/or Owner. Ms. Shealey has family members who are students and teachers at the Schools. Compliance Requirements As explained by RaShawn Williams, the Office, parents, and eligible schools work closely together to access the scholarship funds. The parents apply for the scholarships through the designated agency and enroll their students directly with an eligible school. The school is responsible for enrolling the student in the scholarship program awarded to that student. Essentially, the student must be deemed eligible to receive scholarship funds, and the school must be eligible to receive those scholarship funds. If a private school is deemed ineligible by the Office for participation in a scholarship program, the students at that school do not lose their eligibility for scholarship funds. Rather, they simply cannot use those funds to enroll in the ineligible school. As private school participants in the Florida Scholarship Programs, the Schools were required to register with the State through the submission of a Private School Annual Survey; and then apply for eligibility through the submission of a yearly Scholarship Compliance Form (Compliance Form). The Compliance Form specifies numerous governing statutory requirements including: (1) submitting background screenings for officers, directors, or other controlling persons; (2) certifying all staff with direct student contact have passed an FDLE Level 2 background screening; and (3) terminating or denying employment to all persons who cannot meet this requirement. The Compliance Form is completed by applicant schools online, and then a signed and notarized hard copy is mailed to the Office. The relevant portions of the Compliance Form are found in "Section 4," and involve background checks: * Has each Owner, Operator, and Chief Administrative Officer undergone a Level 2 background screening through the Florida Department of Law Enforcement and submitted the results to the Florida Department of Education in accordance with section 1002.421(1)(m), Florida Statutes? (Reports must be filed with the private school and made available for public inspection). * * * * Have all employees and contracted personnel with direct student contact submitted their fingerprints to the Florida Department of Law Enforcement for state and national background screening in accordance with section 1002.421(1)(m), Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school deny employment to or terminate an employee or contracted personnel with direct student contact if he or she fails to meet the background screening standards under section 435.04, Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school disqualify instructional personnel and school administrators from employment in any position that allows direct contact with students if the personnel or administrators are ineligible under section 435.40, Florida Statutes? A "No" answer on any of the above questions would, if unresolved, result in a private school's ineligibility for scholarship funds. The evidence establishes that the Schools answered "Yes" for sections 4A, 4C, 4D, and 4E on the notarized Compliance Forms that were submitted on December 18, 2018, and December 11, 2019. In addition to certifying the information above on the Compliance Forms every year, an eligible school must submit to the Office screening documentation for directors, principals, board members, administrators, and officers as part of the renewal of participation in the scholarship programs. Screening documentation related to other employees must be maintained by the schools and is usually only reviewed by the Office during an audit or a site visit of the school. There is no dispute that the Schools never listed Lorene Walker as an administrator for the Schools. There is no dispute the Schools never submitted any background screening information for Ms. Walker until specifically requested by the Office in November 2019. Employment of Lorene Walker Lorene Walker was hired by the Schools in 2013.3 She had children and/or grandchildren who attend the Schools. The Schools claim Ms. Walker was hired from an entity known as "Career Source." Although Ms. Walker believed that she had been cleared to work at the Schools, there is no employment file or documentation that she had undergone the Level 2 background screening required by law before being employed at the Schools. Originally, Ms. Walker worked as a "floater." As a floater, Ms. Walker cooked, cleaned, and did whatever the school needed at the time. It is unclear whether she had direct contact with students in this position. 3 Ms. Walker testified she began working there in 2015, but later stated she started in 2013. Ms. Shealey indicated by 2014, Ms. Walker had transitioned into the current position. Regardless, in 2014, Ms. Walker transitioned into a more active role at the Schools. Although the Schools claim in response to the Complaints that she was simply an administrative assistant to Ms. Shealey, the evidence establishes that Ms. Walker was the Administrator for the Schools during the time relevant to the Complaints. She reminded teachers to send out grades, attended meetings, oversaw the lunch program, and prepared school-related and financial documentation. Ms. Walker was also responsible for the Schools' students' enrollment into the scholarship programs. As Administrator, Ms. Walker also had authority, either explicit or implicit, from the Schools' owner, Ms. Shealey, to represent the Schools when dealing with the Office. She worked directly with Ms. Williams on compliance issues, including fire safety, health inspections, and completion of the Annual Survey and Compliance Form for the Schools. Ms. Walker also responded to requests for information from Ms. Williams and others in the Department. It was clear Ms. Walker was integral to the operation of the Schools. Ms. Shealey and Ms. Walker were the only two individuals with access to the Schools' email accounts that were used to correspond with the Department. The emails from one of the email addresses usually contained Ms. Shealey's signature block indicating either the title of "Principal" or "Headmistress." Ms. Walker's signature line identified her title as "Administrator." Before being hired by the Schools, Ms. Walker had been arrested for numerous offenses between 1978 and 2001 in Florida. Although most of these offenses were dismissed, dropped, and/or abandoned, she pled nolo contendere to and was found guilty of a 1994 charge for unlawful purchase of a controlled substance, a second-degree felony in violation of section 893.13, Florida Statutes (1993). The 1994 charge is a disqualifying offense which rendered Ms. Walker ineligible to be a school employee.4 There was no evidence that Ms. Walker had obtained an exemption for this qualification. As noted above, the Schools never disclosed Ms. Walker's importance in their operations in their Compliance Forms. Prior to November 2019, the Schools had never provided any screening documentation for Ms. Walker to the Office as part of the yearly compliance process. Investigation and Complaints On or around October 14, 2019, the Department received a complaint from another state agency concerning possible abuse by an employee of the School at the Pine Hills campus. Although the abuse investigation was handled outside of the Office, the Office opened an inquiry into the Schools' compliance with background check requirements and other issues. Whitney Blake conducted the investigation on behalf of the Office. The first step in this inquiry was a letter from Ms. Blake's supervisor, dated October 25, 2019, requesting (among other things) a list of all employees (including both teachers and other personnel) and results of current FDLE Level 2 background screenings for all employees. 4 Section 435.04, Florida Statutes, provides the following in relevant part: (2) The security background investigations under this section must ensure that no persons subject to the provisions of this section have been arrested for and are awaiting final disposition of, have been found guilty of, regardless of adjudication, or entered a plea of nolo contendere or guilty to, or have been adjudicated delinquent and the record has not been sealed or expunged for, any offense prohibited under any of the following provisions of state law or similar law of another jurisdiction: * * * (ss) Chapter 893, relating to drug abuse prevention and control, only if the offense was a felony or if any other person involved in the offense was a minor. On November 4, 2020, Ms. Walker sent the Department a list of all the Schools' staff, including herself as "Administrator," along with the results of her background screening, revealing her previous disqualifying offense. On November 15, 2019, Ms. Blake attempted to contact Ms. Shealey by phone because she was concerned that Ms. Walker, who was the disqualified employee, was the person sending the information from the School. When she called the Schools and requested to speak with the owner (Ms. Shealey), the person who answered purportedly claiming to be the Schools' owner did not have a distinguishable accent. Ms. Shealey was known to have a strong accent, whereas Ms. Walker did not. Regardless, on this call, Ms. Blake instructed the person on the other end of the phone line that the Schools would need to terminate Ms. Walker immediately because of her disqualifying offense. On that same day, Ms. Blake then sent a follow-up email to the Schools (at both email addresses utilized by the Schools) indicating there were outstanding items that had not been provided as requested in the October 25 letter. She also specifically requested proof Ms. Walker was no longer at the Schools. Specifically, the Department stated: Upon review of the Level 2 background screenings, it was determined Lorene Walker has disqualifying offenses pursuant to section 435.04, F.S. An employee or contracted personnel with direct student contact means any employee or contracted personnel who has unsupervised access to a scholarship student for whom the private school is responsible. To certify compliance with this requirement, please submit a signed statement indicating Lorene Walker's employment at your school has been terminated or that individual's role with your school no longer puts he/she in proximity to scholarship students. Your attention to this in the next five days will preempt any further action on our part. (emphasis added). That same date, November 15, 2019, the Schools emailed one of the items requested by Ms. Blake, an abuse poster, to the Office. Although Ms. Walker testified she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. On November 18, 2019, the Schools sent another item previously requested by Ms. Blake, the teaching qualifications for a teacher, to the Office. Again, although Ms. Walker claimed she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. Ms. Blake did not receive any proof that the Schools had removed Ms. Walker from her position within five days as requested in the November 15 email to the Schools. As a result, on November 22, 2019, Ms. Blake emailed the Schools reiterating the requirements of section 1002.421, and repeating her request for a signed statement that Ms. Walker had been terminated or had no contact with scholarship students. Ms. Blake also added: "Failure to turn in the requested documentation could impact your school's ongoing participation in the Scholarship Program." During this time, Ms. Blake spoke to Ms. Shealey numerous times on the phone regarding the outstanding requests related to another teacher and the signed documentation that Ms. Walker had been removed from her position. Ms. Shealey indicated it would be difficult to remove Ms. Walker due to Ms. Walker's oversight of the school and her familiarity with the scholarship student information. After Ms. Blake did not receive the requested proof of Ms. Walker's removal from the Schools and two other items related to a teacher, the Office issued a Notice of Noncompliance on December 5, 2019. On December 19, 2019, Ms. Shealey sent to Ms. Blake one of the outstanding items related to the teacher by email. There was no mention of Ms. Walker and no signed proof that Ms. Walker had been removed from her position. The next day, Ms. Blake wrote an email to Ms. Shealey indicating that she did not have authority to exempt Ms. Walker from the background screening requirements. She again asked for the outstanding information related to the other teacher and a signed statement indicating Ms. Walker had been removed and no longer had proximity to scholarship students. On December 23, 2019, Ms. Shealey emailed Ms. Blake that the teacher for which there was an outstanding request had resigned and no longer worked for one of the Schools. Ms. Blake responded with yet another request for the signed statement indicating Ms. Walker had been terminated or was no longer in proximity to scholarship students. In response, Ms. Shealey sent an email to Ms. Blake with an attached letter. The letter titled "Termination of your employment" and dated December 9, 2019, indicates that Ms. Shealey terminated Ms. Walker during a meeting held on December 9, 2019. The letter is unsigned. Ms. Shealey indicated in the text of the email that it was the hardest letter she had to write. Being concerned that they had not received a signed statement, Ms. Blake and Ms. Williams requested that a site visit be conducted at the Pine Hills Campus. A visit was scheduled for February 5, 2020, and the Schools were provided notice of the site visit by certified mail, email, and telephone. Additionally, the Schools were provided a checklist of the documents that should be provided to the inspector during the site visit. On February 5, 2020, Scott Earley from the Office conducted the site visit at the Pine Hills Campus. When he arrived, Ms. Shealey was not there and none of the documentation previously requested had been prepared for review. Mr. Earley testified that once Ms. Shealey arrived, she did not know where all the requested documents were, nor could she produce all of them. For example, when asked about a necessary health form, Ms. Shealey indicated that Ms. Walker would know where the document was, but she could not locate it. Mr. Earley did not recall Ms. Shealey stating during the inspection that Ms. Walker was working from home, but she gave Mr. Earley the impression that Ms. Walker's background screening issue had been resolved. Regardless, the Site Visit Staff/Consultant Worksheet filled out for the February 5 site visit does not disclose Ms. Walker as a member of staff or contracted personnel with the Pine Hills Campus. Although Ms. Walker was not at the Pine Hills Campus during the site visit, Mr. Earley believed based on his observations and conversations with Ms. Shealey that Ms. Walker was still employed by the Schools as a director or principal. Almost two weeks later on February 20, 2020, Petitioner filed the Complaints against the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. Even after the Complaints had been served on the Schools, however, it was unclear what Ms. Walker's involvement was with the Schools. There may have been some confusion because Ms. Walker had been seen after her purported termination on campus. Ms. Walker claimed she was on campus only to pick up her children and grandchildren. Testimony from two of the Schools' teachers indicated that they noticed Ms. Walker was no longer at the Schools, but knew she was taking care of the Schools' paperwork from her home. Neither teacher could establish a date certain for when Ms. Walker stopped working on campus and/or when she began working at home. Prior to the filing of the Complaints in these proceedings, there was no evidence that the Schools ever reported to the Office that Ms. Walker had been working from home. Nothing in the Petition filed on March 4, 2020, indicates Ms. Walker was still employed at the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. As part of the March 11 submission, Ms. Shealey sent a signed statement indicating she had not terminated Ms. Walker, but rather "had her work from home." This was the first time Ms. Shealey indicated to the Office that Ms. Walker was still working for the Schools. In the Motion filed April 10, 2020, the Schools indicated they were unaware of the specifics of the Level 2 background screening requirement, and that, once aware, "we took action immediately and terminated the employee in question." There was no indication in the body of the Motion the Schools continued to employ Ms. Walker to work at her home. Attached to the Motion, however, was the same letter submitted on March 11 indicating Ms. Walker was working from home. In the Amended Petition filed on May 15, 2020, the Schools state Ms. Walker was terminated: "I terminated Ms. Lorene Walker due to the Department's information in order to come into compliance with the Florida Department of Education." "I rectified this deficiency by terminating Ms. Walker." "Ms. Lorene Walker was terminated on December 9, 2019, as advised by Whitney Blake." Although the Amended Petition does not explicitly state Ms. Walker continued to work for the Schools at home, it does leave room for this interpretation: "As of December 9, 2019, Ms. Lorene Walker no longer works in the Lion of Judah facility." It is unclear on what date Ms. Walker stopped working from home for the Schools. What is clear is that at the time of the final hearing she was no longer working at the Schools in any location or in any capacity. ULTIMATE FACTUAL DETERMINATIONS The greater weight of the evidence establishes Ms. Walker, in her role as Administrator, should have been disclosed to the Office as an "operator" or "a person with equivalent decision making authority." The Schools were required to send her background screening documentation to the Office as required by the Compliance Form and section 1002.421(1)(p), and they did not. The Schools employed a person with a disqualifying offense in violation of sections 1002.421(1)(m) and 435.04(2)(ss). Specifically, the Schools employed Ms. Walker from 2014 (if not earlier) through December 2019 (if not later) in a position in which she was in the vicinity of scholarship students, knowing that she had been found guilty of a felony and without obtaining or providing documentation related to a Level 2 background clearance. The Schools continued to allow Ms. Walker to remain in a position that placed her in the vicinity of scholarship students after receiving notification of her ineligibility for almost a month (if not more). The greater weight of the evidence establishes the Schools engaged in fraudulent activity, to wit: (1) Ms. Shealey falsely represented to the Office that the Schools complied with Section 4 of the Compliance Form for 2018 and 2019; (2) the Schools falsely obscured Ms. Walker's role at the School and her criminal background; and (3) the Schools failed to honestly disclose Ms. Walker's employment status when they claimed to terminate her on December 9, 2020, but failed to inform the Office that they had retained (or rehired) her to work at home. The Schools made these statements of material fact either knowing they were false or in reckless disregard of the truth or falsity of the representations, which were false.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner enter a final order (1) upholding the suspension; and (2) revoking the eligibility of Lion of Judah Academy (4015) and Lion Of Judah Academy (8827) to participate in the following Florida Scholarship Programs: John M. McKay Scholarships for Students with Disabilities Program, Florida Tax Credit Scholarship Program, Gardiner Scholarship Program, Hope Scholarship Program, and/or Family Empowerment Scholarship Program. DONE AND ENTERED this 3rd day of November, 2020, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 November, 2020. COPIES FURNISHED: Jason Douglas Borntreger, Esquire Department of Education Suite 1544 325 West Gaines Street Tallahassee, Florida 32310 (eServed) Judith Shealey Lion of Judah Academy 1056 North Pine Hills Road Orlando, Florida 32808 Shawn R. H. Smith, Esquire Law Office of Shawn R. H. Smith, P.A. Post Office Box 547752 Orlando, Florida 32854 (eServed) Chris Emerson, Agency Clerk Department of Education Turlington Building, Suite 1520 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Matthew Mears, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Richard Corcoran Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed)
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 Respondent Union for Experimenting Colleges and Universities--Miami Center (hereinafter "UECU") is a foreign corporation authorized by the Florida Secretary of State to transact business in the State of Florida. Founded in 1964, UECU is an independent non-profit university incorporated in Ohio and authorized by the Ohio Board of Regents to award Bachelor of Arts, Bachelor of Science and Doctor of Philosophy degrees. UECU first began its graduate program and shortly thereafter started its undergraduate program known as the University Without Walls (hereinafter "UWW"). UECU provides an alternative to campus-based higher education and is geared primarily toward the adult student. On March 7, 1984, UECU submitted an application to Petitioner State Board of Independent Colleges and Universities (hereinafter "the Board") for a license to operate a student service center in Miami; Florida. At the time of its application to the Board, UECU was a candidate for accreditation with the North Central Association of Colleges and Schools and offered its educational program through student service centers located in Cincinnati and Los Angeles. In its application, UECU identified Lorenzo Battle, Ph.D., as the Dean/Director of the Miami Center; Sheila Costello as the Administrative Assistant to the Dean; and Wayne Leaver, Ph.D.; and Carolyn Miller as the full-time members of the core faculty. The relationship between the central office of UECU in Cincinnati and the student service centers was set forth in a memorandum from the National Dean contained in the application: The Central Office will house all permanent records for all the learners. . . . Financial Aid will be administered through the Central Office. . . . Registration forms and materials will be made up in the Central Office and sent to the Student Service Centers to be signed by the students. Student accounts will be maintained in Cincinnati at the Business Office. . . . Academic policy and implementation procedures must be designed through the office of the UWW Vice President and National Dean. All policies and procedures must be cleared through this office first, and must have the approval of the national Faculty and Deans. Student Service Center Deans are to implement these policies through the faculty at their centers. Thus, the application made clear that the Central Office in Cincinnati had primary responsibility for the academic programs and the finances of the Miami Center. The application contained a budget for the Miami Center for 1984-85 as well as UECU's audited financial statements for the fiscal year ending June 30, 1983. The application stated the Miami Center " . . . will be funded by student fees and tuitions as well as by the main campus in Ohio." The Executive Director of the Board, C. Wayne Freeberg, Ed.D., prepared a staff report on UECU's application for the Board's meeting on September 14, 1984, when UECU's application was scheduled to be reviewed. In his report he noted the location of UECU as Cincinnati and in the space designated for "Name/Title of Chief Administrative Official" he listed Dr. Robert R. Conley, President Dr. Sean Warner, Vice President for Academic Affairs; and Battle, Director of the Miami Center. Freeberg recommended that the Board grant UECU a temporary license subject to two conditions: (1) it file monthly financial reports, and (2) it not include the "Environmental Dimension" in its academic program. The Board followed Freeberg's recommendation, and on September 14, 1984, granted UECU a temporary license to operate a center in Miami, Florida, having determined that UECU met the requirements for temporary licensure. Although President Conley, Vice President Warner and Miami Director Battle were present at that meeting, on September 17, 1984, Freeberg wrote Battle a letter confirming that the Board had determined that UECU-Miami Center met the requirements for temporary licensure. The Miami Student Service Center Budget for 1984-85 submitted with the application showed projected enrollment in the summer of 70, in the fall of 110, in the winter of 130, and in the spring of 130; for an average quarterly enrollment of 110 students. It showed a projection of revenue over expenditures of minus $19,635 for summer, plus $2,295 for fall, plus $23,145 for winter, and plus $23,145 for spring, for a fiscal year total revenue over expenditures of plus $28,950 by the end of the first year of operation. Total expected tuition was $572,000. A contingency fund of $50,000 as a "reserve for enrollment fluctuations and unanticipated development expense" was built into that budget. In compliance with the conditions of temporary licensure, UECU filed financial reports with the Board during its first year of licensure. Conley sent Freeberg the first financial report on October 9, 1984, with a cover letter stating, "If you have any questions on this report, please do not hesitate to call me or drop me a note." Freeberg does not remember calling Conley about that report. On November 28, 1984, Conley sent Freeberg a letter with an attached financial report. In the letter, Conley stated: A word of caution in the interpretation of these reports is in order. The monthly report indicates a cash shortfall of $23,082, which is being funded by UECU from its developmental subsidy fund. The Center is new, the enrollment low, and the front-end costs are higher than one might expect in terms of an on-going, established unit. We expect this situation to change overtime as the enrollment grows and the Center matures. As of September 30, 1984, the end of the first quarter of our 1984-85 fiscal year, UECU had expended 5155,350 in development subsidies supporting the center. At its meeting on December 3, 1984, the Board received the financial reports which Conley had submitted to Freeberg. On January 2, 1985, Conley sent Freeberg a letter with an attached financial report. Freeberg did not call Conley about this report. On January 17, 1985, Conley sent Freeberg a letter with an attached financial report. In that letter, Conley stated, "During the first half-year UECU provided developmental funding for the center in the amount of $103,785. We expect that amount to decline over subsequent quarters as the enrollment grows. Dr. Battle's enrollment forecasts have unfortunately, been overly optimistic." Although Freeberg read the report, he did not call Conley to ask him any questions about it. On February 26, 1985, Conley sent Freeberg a letter with attached financial reports. Freeberg did not call Conley about these reports. In his report to the Board for the March 11, 1985 meeting, Freeberg recommbnded, with respect to the financial reports submitted by Conley on January 2 and January 17, 1985, that they "be received and approved for the record". At the Board's meeting on March 11, 1985, the Board received and approved the financial reports which had been submitted by Conley. On March 18, 1985, Freeberg wrote Battle a letter stating, "The Board received and approved the Special Report on Standard 5 [sic]; Finance; and noted the financial support provided by the Union." Freeberg sent Conley a copy of this letter. On April 1, 1985, Conley sent Freeberg a letter with an attached financial report. The letter stated, "If you have any questions concerning this report, please let me know. We would be most happy to supply any additional information that may be needed in clarification." Freeberg did not call Conley about this report. On April 22, 1985, Conley sent Freeberg a letter with an attached financial report. In the letter Conley stated, "If you have any questions concerning this report, please let me know." Freeberg did not call Conley about this report. On April 24, 1985, Conley sent Freeberg a letter with an attached interim report concerning UECU's operations in Florida during the period of temporary licensure. Enclosed with the interim report was a copy of the notification of accreditation, dated February 27, 1985, from the North Central Association of Colleges and Schools, Commission on Institutions of Higher Education. North Central is a regional accrediting agency recognized by the United States Department of Education. Regarding "Standard 6: Finances", UECU reported: "No changes in the sources of revenue have occurred during this period. The Center's operation is funded from essentially two sources: tuition and fee revenues and development funding from UECU. The current financial situation at the center is a healthy one and moving ahead according to our financial plans." Page 8 of the interim report -showed a development subsidy as of March 31, 1985 in the amount of $195,961 and a fund balance deficit of $179,930. Freeberg never spoke to Conley about the interim report. For the Board's meeting on June 7, 1985, Freeberg prepared two staff reports. One contained excerpts from UECU's UECU's annual report. Freeberg's report noted the campus as being in Cincinatti, Ohio and also listed Conley's name first in the space for "Name/Title of Chief Administrative Official". In the staff comment section of the report it is noted that the Board's visit to the Miami Center would occur in early October of 1985. Freeberg recommended " . . . that the Temporary License granted to the Center be continued for three (3) months pending the onsite evaluation report by the visiting committee", and that the Board receive UECU's Annual Report. interim report, and the other attached the financial information which Conley had submitted on April 1 and April 22, 1985. Both reports listed Conley's name first in the space for "Name/Title of Chief Administrative Official." On June 17, 1985, Freeberg sent Battle a letter confirming the Board's action at the meeting on June 7, 1985, receiving UECU's interim report and UECU's financial reports. The letter also advised that the Board would conduct an annual review of UECU's temporary license at its meeting on September 12, 1985. Freeberg did not send Conley a copy of this letter or any of the enclosures. On July 18, 1985, Conley submitted to Freeberg an annual report for the UECU Miami Center. According to the financial information included in the annual report: as of April 30, 1985 the developmental subsidy was $157,198 and the fund balance deficit was $114,819 as of May 31, 1985, the developmental subsidy was $152,686 and the fund balance deficit was $134,943 as of June 30, 1985, the developmental subsidy was $158,647 and the fund balance deficit was $159,208. Regarding "Standard 6: Finances", UECU stated in the annual report, "No changes in the sources of revenue have occurred during this period. The Center's operation is funded from essentially two sources: tuition and fee revenues and developmental funding from UECU. The current financial situation at the center is a healthy one and moving ahead according to our financial plans." Although Freeberg had some concern about the completeness of the information submitted in the annual report, no "completeness summary" or other written request for additional information was ever submitted to UECU with respect to UECU's annual report. In connection with the Board's meeting on September 12, 1985, Preeberg prepared a staff report regarding UECU's annual report. Freeberg's report noted the campus as being in Cincinatti, Ohio and also listed Conley's name first in the space for "Name/Title of Chief Administrative Official." In the staff comment section of the report it is noted that the Board's visit to the Miami Center would occur in early October of 1985. Freeberg recommended ". . . that the Temporary License granted to the Center be continued for three (3) months pending the onsite evaluation report by the visiting committee," and that the Board receive UECU's Annual Report. In none of his staff reports to the Board during the term of UECU's licensure, including his written report to the Board for its meeting on September 12, 1985, did Freeberg advise that UECU had violated any standard for temporary licensure or that UECU's temporary license should be revoked or suspended. At the end of June, 1985, UECU placed Battle on probation and an addendum was attached to his employment contract for unsatisfactory performance. Battle retained legal counsel in connection with his dispute with UECU regarding the terms of his continued employment. In July, 1985, Freeberg received a call from the UECU Cincinnati office in which the National Dean asked Freeberg if he had any concerns about the Miami Center under Battle. After that call, however, Freeberg never contacted the main office of UECU about any concerns he may have had about the operation of the UECU Miami Center. Battle caused a letter to be delivered on September 12, 1985, to the office of the Rev. Dr. Patrick H. O'Neill, at St. Thomas University in Miami where the Board's meeting was being held. O'Neill, President of St. Thomas University and the Chairman of the Petitioner Board, gave the letter to Freeberg. Though hand-delivered on September 12, 1985, the letters bears the date of September 3, 1985. Freeberg read the letter to the Board. The letter states: Fr. O'Neill: Please inform the Board that I have notified President Conley of my resignation as Dean of UECU Miami Center. Consequently, I am no longer the official agent in the State of Florida for UECU of Cincinnati, Ohio. Thank you for your support in the past. Very truly yours. Lorenzo Battle III September 3, 1985 Freeberg concluded from his review of Battle's letter that Battle had resigned as the Dean of the UECU Miami Center as of September 3, 1985. Freeberg did not call the Cincinnati office of UECU to find out whether Battle had notified the Cincinnati office of his resignation or whether Battle's resignation was effective as of September 3, 1985. No representative of UECU was present at the Board's meeting. The main office of UECU had not been notified of the Board's meeting. At the meeting Board Chairman O'Neill stated, "The program's obviously bankrupt here." This statement is incorrect. UECU presented unrebutted testimony that there are no unpaid obligations at the UECU Miami Center. At the meeting O'Neill also stated, "It doesn't have students." This statement is also incorrect. As set forth in Freeberg's report to the Board, there were 63 students enrolled in the UECU Miami Center at the time of the Board's meeting on September 12, 1985. In response to a comment by Freeberg about UECU " . . . not having a person there to head the thing up," Board member Peterson queried, "When you say no one there to head it up, is that just on the basis of the fact that no one was identified there?" Chairman O'Neill responded, "No one is there." O'Neill's statement was incorrect. UECU presented unrebutted testimony that the Administrative Assistant to the Dean was there at the time of the Board meeting and core faculty were there regularly throughout the month of September. After further discussion, and notwithstanding the recommendation of Freeberg's staff report that UECU's temporary license be continued for three months pending an onsite evaluation report by the visiting committee, the Board voted to suspend immediately the temporary license of the UECU--Miami Center on the basis of alleged violations of standards relating to finances and administrative organization, set forth in Rules 6E-2. 04 (3) (a) and 6E-2. 04 (6) (a), Florida Administrative Code. In response to the Board's action, on September 20, 1985, Conley sent Freeberg a letter informing him that at the time Battle delivered his letter to O'Neill on September 12, 1985, he had not told UECU that he had resigned. In fact, Battle's resignation letter to UECU, though dated September 3, 1985, was not delivered to Conley until September 16, 1985. Furthermore, the letter states, "My resignation will be effective upon resolution of details with Attorney Robert Beatty." Although Freeberg and apparently the Board concluded on September 12 that Battle had resigned on September 3, 1985, Conley's letter further advised that "it is not correct that Dr. Battle had relinquished his tasks or his responsibilities. " Battle was in and out of the UECU Miami Center during the first two weeks of September. When he was not there he left a telephone number where the Administrative Assistant to the Dean could reach him. Battle also called into the UECU Miami Center during the first two weeks of September to check in on operations. Battle's intermittent presence in the office during the first two weeks of September is, in any event, of no consequence because no students came into the office requesting to see Battle at a time when he was not there. The Administrative Assistant to the Dean, who testified she was at the Miami Center office from 9 a.m. to 5 p.m. during the first two weeks of September, did not know of any student who came into the Miami office with a problem or question which was not answered or addressed because of Battle's absence from the office. In addition to the Administrative Assistant to the Dean, Wayne Leaver, Ph.D., one of the core faculty members, was also physically present in the UECU Miami Center until September 10, 1985, when he left for a National Faculty Meeting at UECU in Cincinnati. Leaver saw Battle physically present at the Miami Center on September 3, 4, 6 and 9. Further, the chronological file at the UECU Miami Center shows memos and letters under Battle's signature were sent out on the 5th, 6th, 11th and 12th of September. Battle last worked for UECU on September 16, 1985, and he was present in the Miami Center office on that day. As a member of the core faculty, Leaver's usual hours were between 1:00 p.m, and 8:00 p.m. The other core faculty member at the time, Carolyn Miller, worked primarily from 9:00 a.m. until 4:00 p.m. Carolyn Miller and Wayne Leaver attempted to schedule their hours so one member of the core faculty was in the office and available to the learners at all times. No student problems arose between September 3 and September 9, 1985, which could not be resolved because of Battle's absence. At no time was UECU's provision of educational services to students registered at the Miami Center interrupted because of Battle's resignation. During the period of September 3, 1985 through October 1, 1985 the UECU Miami Center office functioned properly and the learners were served. Leaver has been the Acting Administrator at the Miami Center since approximately October 1, 1985. Leaver holds two doctoral degrees and has prior experience serving as an administrator. On September 13, 1985, Lauren Millikin, Ph.D. the Acting National Dean, first learned of Battle's alleged resignation, and she immediately advised Conley. Conley flew to Miami on September 15, 1985 and was at the UECU Miami Center office until Wednesday, September 18, 1985. Also present at the Miami Center the week of September 16 was Dr. Catherine Cannon, Cincinnati's Dean. During the week of the 23rd, UECU's Vice President for Institutional Advancement directed the Miami Center, and Dr. Cannon returned to spend the following week training Leaver for his new duties. Additionally, Acting National Dean Milliken spent three days at the Miami Center during the week of the 23rd while the Vice President for Institutional Advancement was there. Accordingly, the UECU Miami Center was properly staffed at all times for September 16, 1985 through the appointment of the new Acting Administrator on approximately October 1, 1985. When the Board met on September 12, 1985, it had no proof that Battle's resignation had interfered with the delivery of educational services to the students registered at the UECU Miami Center. At the final hearing in this matter, the Board offered no proof that Battle's resignation had in any way interfered with the delivery of educational services to students registered at the UECU Miami Center. In July, 1978, UECU filed a petition for an arrangement pursuant to Chapter 11 of the Federal Bankruptcy Act. The Court approved a plan of reorganization under which UECU agreed to pay the 511 claimants, composed primarily of faculty and students. In 1980 and 1981, UECU continued to operate at a deficit. By July, 1982, UECU had amassed debts of $1,577,000. At this point, the Trustees of UECU hired Conley. The financial problems Conley faced at that time included: payment of creditors under the Chapter 11 Plan of Reorganization: a $1,039,168 Department of Education claim for matters of noncompliance regarding financial aid transactions for the two year period ended June 30, 1978 a high rate of uncollectible accounts receivable and an unrestricted fund deficit of $730,078. Within six months Conley's administration was able to turn UECU's financial problems around. During fiscal 1983 UECU reduced its unrestricted fund deficit by $628,606, from $730,078 to $101,472. UECU included in its application for licensure by the Board a copy of its audited financial statements and the auditor's opinion letter for the fiscal years ending June 30, 1983 and June 30, 1982. UECU's audited financial statements disclosed the financial difficulties challenging Conley's administration. The application advised the Board of UECU's 1978 Bankruptcy, financial aid matters of noncompliance, the high rate of uncollectible accounts receivable, and the unrestricted fund deficits. Significantly, UECU's auditors' opinion letter for the fiscal year ended June 30, 1983, contained a qualification "as to the Institution's ability to continue operations on a going concern basis." On September 14, 1984 the Board granted UECU a temporary license, concluding on the basis of the information provided in UECU's application, that UECU satisfied the temporary licensure standard relating to finances. During the fiscal years ending June 30, 1984 and June 30, 1985, UECU's financial condition improved dramatically. Ironically, UECU's financial condition was much better at the time the Board summarily suspended its license than it was a year earlier when the Board concluded UECU had met the financial standard for temporary licensure. UECU disclosed its 1978 bankruptcy in its application for a Florida license. The face value of the Chapter 11 claims at the time UECU filed its application with the Board was $156,707. As of the date of the final hearing; the total face value of the Chapter 11 claims of UECU was $97,000. On February 21, 1985, UECU was accredited by the North Central Association of Colleges and Schools. Prior to granting accreditation to UECU, an evaluation team from the Commission on Institutions of Higher Education of the North Central Association of Colleges and Schools visited UECU. The North Central evaluation team reviewed UECU's books and records, financial statements, accounting work papers, and met with UECU's accountants and attorneys. The evaluation team spent three days analyzing and reviewing UECU's financial status. The evaluation team published a report which addressed the financial resources of UECU as well as the effects of the July 1978 Chapter 11 bankruptcy. The evaluation team's report, which recommended accreditation for UECU, stated, "Today the Chapter XI proceedings are substantially a matter of history. . . . From an original gross amount of $442,122, the balance of the indebtedness had, as of June 30, 1984, been reduced to $120,556. . . .". The Board's reliance upon UECU's 1978 bankruptcy as a ground for revoking UECU's license is specious. In UECU's application for a Florida license it notified the Board of its auditors' "going concern" qualification in the audited financial statement filed with the Board for the fiscal year ended June 30, 1983. UECU's audited financial statements for the fiscal year ended June 30, 1984, which Conley submitted to Freeberg in October, 1984, do not contain a "going concern" qualification. Rather, the auditors' opinion states, "The financial statements of the Institution as of June 30, 1984 and for the year then ended, indicate an overall improvement in the financial position and operations of the Institution such that the continued existence of the Institution is apparent. Accordingly, our present opinion on the 1983 financial statements, as presented herein, is different from that expressed in our previous report." UECU's audited financial statements for the fiscal year ended June 30, 1985 also contain no "going concern" qualification. The Board granted UECU a temporary license at a time when the auditors' opinion contained a "going concern" qualification yet, it summarily suspended UECU's temporary license when the "going concern" qualification had been removed and there was no longer a question as to the continued existence of the Union. The State Board's reliance upon UECU's auditors' opinions as a basis for revoking UECU's temporary license is unjustified. In its application, UECU notified the Board of certain contingent liabilities regarding federal financial aid matters. The contingent liabilities represent matters of alleged noncompliance resulting from a Department of Health and Human Services audit of UECU's Federal Education Grants. In response, UECU has done a re-audit of the financial aid accounts for the periods of 1978, 1982 and 1984 and has retained an attorney to negotiate these items with the government. Conley's uncontradicted testimony was that UECU's potential liability for the exceptions noted by the Department of Education will be between $75,000 to $150,000. Indeed, the North Central evaluation team concluded, "The data made available to the visiting team support this optimistic prognosis. The financial aid office has made a case-by-case analysis of the student files to which exceptions had been taken. Over 90% of the missing documentation which was the basis for the exceptions has been located. This alone would support [UECU's] prognosis." In recent years, there has been a dramatic improvement in the administration and documentation of the federally supported student aid program at UECU. If in the auditors' opinion the contingent liabilities threatened the continued existence of UECU the auditors would have maintained the "going concern" qualification in their opinion letter. Instead, they eliminated it in 1984. The existence of the financial aid contingent liabilities was made known to the Board when UECU applied for a license. Yet Freeberg never asked to review UECU's audits of the 1978, 1982, and 1984 financial aid accounts, and the Board approved UECU's application. The Board's reliance on the contingent liabilities as a basis for license revocation is unjustified. In its application to the Board, UECU showed a large allowance for doubtful accounts as a se :off to its accounts receivable. Since the date of its application, UECU's collectability of accounts receivable has dramatically improved. Outside users of UECU's financial statements should not be concerned with the write-off of bad debts. The write-off of doubtful accounts is a conservative practice which serves to fairly state accounts receivable. A large allowance for doubtful accounts in budget or financial statement is no basis for finding financial instability. The Board failed to show that UECU's practice of characterizing as doubtful a large percentage of its account receivables was anything other than a conservative, prudent practice. The financial report contained in UECU's application to the Board showed an unrestricted fund deficit as of June 30, 1983 of $101,472. UECU's unrestricted fund balance as of June 30, 1985 was a positive $123,660. Conley testified the fund balance as of September 30, 1985 was a positive $233,000. The Board failed to introduce any evidence showing that UECU's current fund balance was in any way "inadequate." The audited financial statements submitted to the Board during the first year of licensure and the Statement of Change in Fund Balance prepared at the final hearing clearly show that there has been improvement in UECU's financial position. Accounting for non-profit colleges and universities is not comparable to accounting for for-profit corporations. According to the Industry Audit Guide For Audits of Colleges and Universities, "Service, rather than profits is the objective of an educational institution: thus, the primary obligation of accounting and reporting is one of accounting for resources received and used rather than for the determination of net income." And, as Dr. Conley testified, "In fact, fund balances as they go are generally not built up to be huge dollar values. In fact, from my experience in institutions of higher education, you don't like to have large fund balances recorded. [I]t does not behoove an institution to publish a large fund balance. It's bad politics." Conley's testimony was unrefuted. One of the grounds for revocation identified by the Board in the statement of its position in the Prehearing Stipulation is UECU's failure to provide the Board with a budget for fiscal year 1985-86. But the Board never requested a copy of the budget from the UECU Cincinnati office where all the financial reports including the budget had been prepared. UECU prepared a budget for fiscal year 1985-86 in February, 1985. Academic personnel and officers were appropriately involved in the preparation of the budget. The budget was reviewed and approved by the Board of Trustees on April 9, 1985. Had the Petitioner Board requested a copy of the budget, Conley would have immediately provided it. In fact, Conley prepared an updated Miami Center budget during his testimony. In suspending UECU's temporary Iicense the Board in part relied upon UECU's alleged failure to set aside funds for the Miami Center. The evidence showed, however, that UECU has, within its budget, provided for funds for the Miami Center. The funds expended by UECU for the development of the Miami Center are accounted for by a "developmental subsidy." UECU had estimated the development of the Miami Center would cost $250,000. As of April 30, 1985, UECU had expended approximately $155,000 of the developmental subsidy for the development of the Miami Center. The balance of approximately $95,000 was budgeted for the 1985-86 fiscal year. In addition to the approximate $95,000, UECU budgeted an additional $12,000 for a total development fund for the fiscal year ending June 30, 1986 of $107,000. The budgeting of these funds is substantiated by the budget worksheet entitled "2/11/85 Expense Forecast--Program Expense". As shown by the monthly financial reports Conley filed during the period of licensure, the developmental subsidy operates like a revolving line of credit, increasing or decreasing during the course of the year depending upon cash flow at the Center. Freeberg testified he would have been more comfortable if the developmental subsidy for the UECU Miami Center had been shown as a separate line-item in the restricted fund of UECU's financial statements although he admitted he did not know whether that would have been in accord with generally accepted accounting principles. In fact, it would have been improper for UECU to account for the developmental subsidy in a restricted fund. The Industry Audit Guide, published by the American Institute of Certified Public Accountants is the authoritative promulgation of generally accepted accounting principles and generally accepted auditing standards applicable to colleges and universities. The Industry Audit Guide provides at page 16: The restricted current funds group consists of those funds expendable for operating purposes but restricted by donors or other outside agencies as to the specific purpose for which they may be expended. Such externally imposed restrictions are to be contrasted with internally created designations imposed by the governing board on unrestricted funds. Nevertheless, the distinction between the balances of externally restricted and internally designated, but otherwise unrestricted funds, must be maintained in the accounts and disclosed in the financial reports. The $107,000 budgeted for the Miami Center developmental subsidy is an internal allocation made by the UECU Board of Trustees. There are no external restrictions imposed on the Miami Center developmental subsidy by either donors or government agencies. Therefore, UECU properly accounted for these funds in the unrestricted fund. The accounting for the subsidy which Freeberg would have felt more comfortable with would have conflicted with generally accepted accounting principles. In the event student enrollment is not as large as anticipated, UECU has budgeted $107,000 in the form of a developmental subsidy to support the Miami Center during fiscal 1985-86. In addition to the developmental subsidy, UECU has about $250,000 in contingency reserves, and a $100,000 line of credit which could be used to fund the Miami Center. In total, UECU has approximately $457,000 available to provide prospective students reasonable assurance that the Miami Center's program will be offered as planned, in the event student enrollment is not as large as anticipated. The Board in its Order of Summary Suspension of Licensure stated, "A substantial negative working capital is no indication of financial health" and cited to a deficit of $159,208. The Board continues to rely upon the $159,000 fund deficit as a basis for revoking UECU's license. The Board has misinterpreted the information contained in the June 30, 1985, Miami Center financial report. The Miami Center "Balance Sheet" as of June 30, 1985, is not a balance sheet as that term is typically understood. The report is actually a cost center report and reflects UECU's investment in the Miami Center. The Board interpreted the Miami Center Balance Sheet as reflecting a negative net working capital of $159,208. This was an incorrect interpretation because the financial statement made no attempt to reflect working capital. The working capital of the Miami Center as of June 30, 1985 is accurately reflected by the Statement of Working Capital. The Statement of Working Capital reflects a net negative working capital position as of June 30, 1985, of $561.00, an insignificant amount. As of the final hearing UECU had no unpaid obligations for its Miami Center. Although Conley had advised as early as November, 1984, that "A word of caution in the interpretations of these reports is in order," the Board, without: (A) calling Conley about the financial reports: (B) consulting a CPA about their proper interpretation or (C) conducting the scheduled on-site evaluation which might have disabused the Board of its misconceptions about the Miami Center, summarily suspended UECU's license on an emergency basis in order to protect the public from this "financially embarrassed" institution.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered dismissing the Administrative Complaint filed against Respondent herein and reinstating Respondent's temporary license. DONE AND RECOMMENDED this 8th day of January, 1986, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301l (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1986. COPIES FURNISHED: C. Wayne Freeberg State Board of Independent Colleges and Universities Department of Education Tallahassee, FL 32301 Ralph D. Turlington Commissioner of Education The Capitol Tallahassee, FL 32301 William R. Dorsey, Jr. Deputy General Counsel State Board of Education Knott Building Tallahassee, FL 32301 Douglas M. Halsey, Esquire 4900 Southeast Financial Center 200 South Biscayne Boulevard Miami, FL 33131-2363 APPENDIX Petitioner's proposed findings of fact numbered 1-4, 6 (except for the first sentence), 7-9, and 19 (except for the first sentence) have been adopted verbatim or have been adopted as modified to conform to accuracy or style. Petitioner's proposed findings of fact numbered 5, 23, and 25-27 have been rejected as being contrary to the evidence. Petitioner's proposed findings of fact numbered 6 (first sentence), 19 (first sentence), 21, and 22 have been rejected as not being supported by the evidence. Petitioner's proposed findings of fact numbered 10, and 14-17 have been rejected as being immaterial. Petitioner's proposed findings of fact numbered 11-13, and 18 have been rejected as being irrelevant. Petitioner's proposed findings of fact numbered 20 and 24 have been rejected as constituting argument of counsel. Respondent's proposed findings of fact numbered 1, 2, 3 (first sentence), 4-8, 10-23, 25-72, 73 (except last sentence), and 74-86 have been adopted verbatim or have been adopted as modified to conform to accuracy or style. Respondent's proposed findings of fact numbered 3 (second sentence), and 9 have been rejected as being irrelevant. Respondent's proposed finding of fact numbered 24 has been rejected as being redundant. The last sentence of Respondent's proposed finding of fact numbered 73 has been rejected as constituting a conclusion of law.
