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 Whether Respondents (private schools participating in certain scholarship programs) engaged in fraud and/or failed to comply with provisions required of private schools participating in such scholarship programs and, if so, whether Petitioner (Commissioner) should suspend or revoke Respondents’ rights to participate in the scholarship programs.
Findings Of Fact Barrington and Barrington II are private schools located in Florida City. They are located in the same facility under the same administration. Both have been eligible to receive McKay and FTC Scholarships for qualified students. Gwendolyn Thomas is the long time administrator of Barrington, which has been in existence for approximately 25 years. Ms. Thomas is also the administrator of Barrington II, which has been in existence for approximately two years. For medical reasons, Ms. Thomas did not participate in the day-to-day operation of either school between October 2010 and November 2013. During her absence, Mack Brown, the assistant principal, was in charge of both schools until he left in June 2013 to start a competing school. Ms. Thomas has been in charge of the day-to-day operation of Barrington and Barrington II since November 2013. McKay Scholarship payments are disbursed on a quarterly basis.2/ Pursuant to sections 1002.39(8)(b) and 1002.421(2)(d), any private school participating in the McKay Scholarship Program is required to affirmatively verify to the Department of Education that each scholarship student is regularly enrolled in the school at least 30 days prior to the issuance of any quarterly scholarship payment. Pursuant to section 1002.39(9)(f), McKay Scholarship checks are made payable to the parent of a scholarship student, which only the parent can sign. Private school personnel cannot sign such a check on behalf of the parent, even with the parent’s permission. Prior to June 9, 2011, Student A was enrolled in Barrington and received a McKay Scholarship. On June 9, 2011, Student A left Barrington and has not been a student at Barrington since June 9, 2011. Between August 26, 2011, and August 23, 2013, nine checks, totaling $12,230.25, were issued to the mother of Student A pursuant to the McKay Scholarship Program. Those checks were issued on the following dates in the following amounts: August 26, 2011 $1,336.75 October 27, 2011 $1,336.75 January 24, 2012 $1,336.75 March 21, 2012 $1,336.75 August 21, 2012 $1,382.50 October 22, 2012 $1,382.50 January 23, 2013 $1,382.50 March 20, 2013 $1,382.50 August 23, 2013 $1,353.25 9. The back of each check contains an endorsement that appears to be the name of Student A’s mother. Student A’s mother did not sign any of these checks. Each check was signed by an employee of Barrington or Barrington II. Each check was deposited into an account owned by Barrington. For each of these payments, Barrington submitted documentation to the Department of Education that Student A was attending Barrington prior to the issuance of the payment, without verifying that Student A was in attendance. As noted above, Student A was not in attendance. On October 4, 2013, the Commissioner filed her Administrative Complaint against Barrington and suspended Barrington’s participation in the McKay and FTC Scholarship Programs. The Commissioner had information that Student A was not enrolled in Barrington and had probable cause to believe that Barrington Academy had engaged in fraudulent conduct.3/ Afterwards, many of the Barrington students were administratively transferred to Barrington II, and continued to receive scholarship payments. Prior to June 7, 2013, Student B was enrolled in Barrington II and received a McKay Scholarship. On June 7, 2013, Student B was taken into the custody of the DJJ and enrolled in a residential facility in Greenville, Florida. Student B was in the custody of DJJ until March 7, 2014.4/ Between September 25, 2013, and January 23, 2014, three checks, totaling $8,316.75, were issued to the mother of Student B pursuant to the McKay Scholarship Program. Those checks were issued on the following dates in the following amounts: September 25, 2013 $2,772.25 October 23, 2013 $2,772.25 January 23, 2014 $2,772.25 The back of each check contains an endorsement that appears to be the name of Student B’s mother. Student B’s mother did not sign any of these checks. Each check was signed by an employee of Barrington or Barrington II. Each check was deposited into an account owned by Barrington. For each of these payments, Barrington II submitted documentation to the Department of Education that Student B was attending Barrington II prior to the issuance of the payment, without verifying that Student B was in attendance. As noted above, Student B was not in attendance. On February 19, 2014, the Commissioner filed her Amended Administrative Complaint against Barrington and Barrington II and suspended their participation in the McKay and FTC Scholarship Programs. The Commissioner had information that Student B was not enrolled in Barrington II and had probable cause to believe that Barrington II had engaged in fraudulent conduct. Barrington has reimbursed the Department of Education for the McKay Scholarship payments made on behalf of Student A. Barrington II has deposited with its attorney sufficient funds to reimburse the Department of Education for the McKay Scholarship payments made on behalf of Student B. Although Ms. Thomas had returned as administrator when at least two of the McKay Scholarship payments at issue were processed by a school employee, she testified, credibly, that she had not authorized that action and was unaware of the misconduct before the Administrative Complaint and the Amended Administrative Complaint were filed. The persons responsible for the deficiencies discussed above have either voluntarily left their employment or have been fired. Barrington and Barrington II have hired a person to ensure compliance with McKay and FTC Scholarship Programs.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Education revoke the participation of Barrington Academy and Barrington Academy II in the McKay Scholarship Program and the FTC Scholarship Program. It is further RECOMMENDED that both schools be permitted to re- apply to participate in these programs after the Department of Education has been reimbursed for the scholarship payments made on behalf of Student B and after both schools demonstrate that they have personnel and written procedures that will ensure compliance with all applicable rules and statutory provisions. DONE AND ENTERED this 19th day of May, 2014, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 19th day of May, 2014.
The Issue The issue in this case is whether the Department of Education (Respondent) acted properly within its authority to claim lottery winnings of Kevin Frye (Petitioner).
Findings Of Fact At all times material to this case, the Petitioner was a borrower, participating in the federal student loan program. Two of the loans involved funds disbursed in 2002, and the third involved funds disbursed in 2003. Repayment of the three loans was to begin in 2005. The Respondent acted as the guarantee agency for the Petitioner's three loans under the federal student loan program. The program provided that the Respondent was obligated to repay the loan in the event of default by the borrower. Such loans were regarded as in default after passage of a 270-day payment delinquency period. Lenders reported defaulted loans by filing claims with the Respondent. The Respondent paid the claims and initiated a collection process to obtain the funds from the borrowers. The Respondent became aware of the Petitioner's defaulted loans in February 2007, when claims were filed with the Respondent by the Petitioner's lender. The Respondent paid the claims and became the owner and holder of three promissory notes documenting the loans. By letter dated March 24, 2009, the Respondent notified the Lottery that the Petitioner had outstanding student loans in the amount of $5,788.08. The amount included accrued interest as of April 8, 2009. The letter stated that such interest would continue to accrue according to the terms of the notes. The letter requested that any lottery prize proceeds won by the Petitioner be transmitted to the Respondent to be credited towards the debt. On April 9, 2009, the Lottery delivered a check in the amount of $1,000 to the Respondent with a letter identifying the amount as lottery winnings of the Petitioner. By letter dated May 13, 2009, the Respondent advised the Petitioner that the lottery proceeds had been received and would be credited towards his student loan debt. The Petitioner's request for hearing stated that he had entered into and completed a "loan rehabilitation" program and that "there is no reflection in outstanding loan balance that coincides with the lottery winnings." Although the Respondent has a program designed to rehabilitate defaulted student loans, there was no evidence presented at the hearing that the Petitioner has entered into any rehabilitation agreement with the Respondent applicable to the debt obligations relevant to this dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Education enter a final order applying the $1,000 lottery prize winnings of Kevin Frye to the student loan debt referenced herein. DONE AND ENTERED this 25th day of November, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 25th day of November, 2009. COPIES FURNISHED: Robert C. Large, Esquire Department of Education 325 West Gaines Street, Suite 1244 Tallahassee, Florida 32399 Kevin Frye 7429 Oakvista Circle Tampa, Florida 33634 Lynn Abbott, Agency Clerk Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Dr. Eric J. Smith, Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Deborah K. Kearney, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400
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.
The Issue The issue is whether Respondent's lottery prize is subject to an outstanding debt owed to Petitioner.
Findings Of Fact Respondent applied for a student loan in the amount of $2,500 under the Florida Guaranteed Student Loan Program in an application dated August 8, 1986. Respondent needed the loan to pay the cost of her attendance at Roffler Hair Design College (school) for the period of September 1986 through January 1987. Petitioner guaranteed Respondent's loan. The loan number is 0000522112. Glendale Federal Savings and Loan Association (Glendale) issued the loan proceeds in two equal disbursements. The first disbursement took place on or about September 26, 1986. The second disbursement took place on or about November 7, 1986. Glendale subsequently sold the loan to Student Loan Marketing Association/Student Loan Services (SLS). The loan accrues interest at the rate of eight percent (8%) per year unless Respondent is in deferment status, i.e. attending school on a minimum part-time basis. In this case, Respondent dropped out of school for a period of time in 1987. On or about June 25, 1987, the school returned $632.52 of the Respondent's loan to the lender. This sum represented the unused portion of Respondent's loan. Respondent's account was credited accordingly. The last day that Respondent attended the school was May 27, 1988. By letter dated September 1, 1988, SLS notified Respondent of the repayment schedule for her loan. Her first payment was due on December 27, 1988. Respondent made no payments on the loan to Glendale or SLS. Accordingly, SLS declared Respondent's loan in default and filed a claim dated August 14, 1989, with Petitioner. On February 20, 1992, Petitioner, as guarantor of the loan, paid SLS for Respondent's defaulted student loan. On that date, the claim principal was $1,864.48 ($2,500 less the $635.52 credit) and the outstanding interest due was $469.95. After Petitioner acquired the loan, the outstanding interest was capitalized resulting in a balance of $2,334.43. This sum accrues interest at the rate of eight percent (8%) per year. Respondent made no payment on her loan after Petitioner acquired it until a portion of her lottery winnings was applied to her account. By letter dated August 31, 1998, Petitioner notified the Department of Lottery about Respondent's outstanding defaulted loan in the amount of $3,561.89, including principal and interest. Petitioner requested the Department of the Lottery to transmit a portion of Respondent's prize money to be credited toward Respondent's debt. Thereafter, the Department of the Lottery transmitted $3,561.89 of Respondent's prize money to Petitioner. By letter dated September 14, 1998, Petitioner notified Respondent that it was in receipt of $3,561.89 of her $5,000 lottery prize. Petitioner applied Petitioner's winnings to her outstanding balance. Respondent has applied for and received at least one other loan which is held by the United States Department of Education (USDE) in the Federal Direct Consolidation Loan Program. The loan which is the subject of this proceeding is not the same loan which is held by USDE.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner was authorized to apply $3,561.89 of Respondent's lottery prize toward her outstanding debt for a student loan. DONE AND ENTERED this 12th day of May, 1999, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (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 12th day of May, 1999. COPIES FURNISHED: Ronald E. Stowers, Esquire Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400 Dollie M. Tunsil 5813 Pompano Drive Jacksonville, Florida 32211 Tom Gallagher Commissioner of Education Department of Education The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400 Michael H. Olenick, General Counsel Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Criminal Justice Standards And Training Commission enter a final order: Dismissing, as moot, the petition of Margherita Renzi insofar as it seeks a determination of prospective eligibility for salary incentive monies under Section 943.22, Florida Statutes (Supp. 1984); and Dismissing, as having no merit, the petition of Margherita Renzi insofar as it seeks a determination of retroactive entitlement to salary incentive payments before October 1, 1984, under Section 943.22, Florida Statutes (1983). RECOMMENDED this 2nd day of April, 1985, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 2nd day of April, 1985.
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 issue is whether Florida Administrative Code Rules 19B-14.001, 19B- 14.002, and 19B-14.003 (collectively the “Rules”), are each an invalid exercise of delegated legislative authority for the reasons alleged by Petitioner.
Findings Of Fact The Board is the State Agency which administers the Stanley G. Tate Florida Prepaid College Program (Florida Prepaid College Plan) set forth in section 1009.98, Florida Statutes, and the Florida College Savings Program (Florida 529 Plan) set forth in section 1009.981, collectively known as the Plans. Intuition is a Florida corporation authorized to do business in Florida. Intuition provides services to customers nationwide, including college savings and prepaid record keeping administration services. It is the largest third- party contractor in the country providing prepaid record keeping administrative services. The Board and Intuition have entered into a series of contracts over the past 25 years. The parties entered their last contract on July 1, 2019, which called for Intuition to provide customer services and records administration services to the Board. Witnesses for both parties testified about the possibility of an upcoming contract dispute involving $700,000.00. This issue prompted the rule challenge. The dispute resolution paragraph in the July 1, 2019, contract provides the following in pertinent part: 33. INTERPRETATION, VENUE AND DISPUTE RESOLUTION * * * B. The sole and exclusive manner of resolution of all claims, disputes or controversies related to or arising under or from this Contract shall be pursuant to Rules 19B-14.001, 19B-14.002, and 19B-14.003, Florida Administrative Code, as amended from time to time. 5. Rules 19B-14.001, 19B-14.002, and 19B-14.003, were effective as “New” on June 20, 1996. Rule 19B-14.001, the only rule that has been amended since 1996,4 currently provides: 19B-14.001 Scope These rules shall apply to the resolution of all claims, disputes or controversies related to or arising from contracts, including any extensions of contracts, entered by the Florida Prepaid College Board on or after the effective date of these rules. These rules shall constitute the sole procedure for the resolution of all claims under all such contracts. These rules do not apply to advance payment contracts for the prepayment of Registration Fees, Local Fees, the Tuition Differential Fee and dormitory fees. Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.971[5] FS. History–New 6-20-96, Amended 10-18-10.[6] Rule 19B-14.001 identifies the “Rulemaking Authority” as section 1009.971(1), (4), and (6), and the “Law Implemented” as section 1009.971. 4 The rule was amended in the following ways: the name was changed from Florida Prepaid Postsecondary Education Expenses Board to Florida Prepaid College Board; the word “postsecondary” was deleted before “Registration Fees”; the word “registration” was deleted after the word “dormitory”; “Registration Fees” was capitalized; and the phrase “Local Fees, the Tuition Differential Fee” was added. 5 Although section 1009.971 is cited as the “Law Implemented,” these three statutory subsections: (2) Florida Prepaid College Board; Membership; (3) Florida Prepaid College Board; Elections; Meetings; and (5) Florida Prepaid College Board; Contractual Services, are not applicable to the challenged rules. 6 These history notes are not completely accurate. This rule was amended in 2010 and the citations are accurate for 2010. Florida Administrative Code Rule 1-1.012, Legal Citations and History Notes, provides the specific method to record legal citations and history notes. Section 1009.971(1), (4), and (6) state in pertinent part: FLORIDA PREPAID COLLEGE BOARD; CREATION.—The Florida Prepaid College Board is hereby created as a body corporate with all the powers of a body corporate for the purposes delineated in this section. The board shall administer the prepaid program and the savings program, and shall perform essential governmental functions as provided in ss. 1009.97-1009.988.[7] For the purposes of s. 6, Art. IV of the State Constitution, the board shall be assigned to and administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in ss. 1009.97- 1009.988. * * * (4) FLORIDA PREPAID COLLEGE BOARD; POWERS AND DUTIES.—The board shall have the powers and duties necessary or proper to carry out the provisions of ss. 1009.97-1009.988, including, but not limited to, the power and duty to: Appoint an executive director to serve as the chief administrative and operational officer of the board and to perform other duties assigned to him or her by the board. Adopt an official seal and rules. Sue and be sued. Make and execute contracts and other necessary instruments. Establish agreements or other transactions with federal, state, and local agencies, including state universities and Florida College System institutions. 7 In 1996, the statutes addressing the Plans ended at section 1009.984. Sections 1009.985 through 1009.988 were added in 2015; but those additions do not affect the issue herein. Further reference to these additional sections 1009.985 through 1009.988 will not be noted. Administer the trust fund in a manner that is sufficiently actuarially sound to defray the obligations of the prepaid program and the savings program, considering the separate purposes and objectives of each program. The board shall annually evaluate or cause to be evaluated the actuarial soundness of the prepaid fund. If the board perceives a need for additional assets in order to preserve actuarial soundness of the prepaid program, the board may adjust the terms of subsequent advance payment contracts to ensure such soundness. Invest funds not required for immediate disbursement. Appear in its own behalf before boards, commissions, or other governmental agencies. Hold, buy, and sell any instruments, obligations, securities, and property determined appropriate by the board. Require a reasonable length of state residence for qualified beneficiaries. Segregate contributions and payments to the trust fund into the appropriate fund. Procure and contract for goods and services, employ personnel, and engage the services of private consultants, actuaries, managers, legal counsel, and auditors in a manner determined to be necessary and appropriate by the board. Solicit and accept gifts, grants, loans, and other aids from any source or participate in any other way in any government program to carry out the purposes of ss. 1009.97-1009.988. Require and collect administrative fees and charges in connection with any transaction and impose reasonable penalties, including default, for delinquent payments or for entering into an advance payment contract or a participation agreement on a fraudulent basis. Procure insurance against any loss in connection with the property, assets, and activities of the trust fund or the board. Impose reasonable time limits on use of the benefits provided by the prepaid program or savings program. However, any such limitations shall be specified within the advance payment contract or the participation agreement, respectively. Delineate the terms and conditions under which payments may be withdrawn from the trust fund and impose reasonable fees and charges for such withdrawal. Such terms and conditions shall be specified within the advance payment contract or the participation agreement. Provide for the receipt of contributions in lump sums or installment payments. Require that purchasers of advance payment contracts or benefactors of participation agreements verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, refund requests, or contract changes of any nature. Verification shall be accomplished as authorized and provided for in s. 92.525(1)(a). Delegate responsibility for administration of one or both of the comprehensive investment plans required in s. 1009.973 to persons the board determines to be qualified. Such persons shall be compensated by the board. Endorse insurance coverage written exclusively for the purpose of protecting advance payment contracts, and participation agreements, and the purchasers, benefactors, and beneficiaries thereof, including group life policies and group disability policies, which are exempt from the provisions of part V of chapter 627. Form strategic alliances with public and private entities to provide benefits to the prepaid program, savings program, and participants of either or both programs. Solicit proposals and contract, pursuant to s. 287.057, for the marketing of the prepaid program or the savings program, or both together. Any materials produced for the purpose of marketing the prepaid program or the savings program shall be submitted to the board for review. No such materials shall be made available to the public before the materials are approved by the board. Any educational institution may distribute marketing materials produced for the prepaid program or the savings program; however, all such materials shall be approved by the board prior to distribution. Neither the state nor the board shall be liable for misrepresentation of the prepaid program or the savings program by a marketing agent. Establish other policies, procedures, and criteria to implement and administer the provisions of ss. 1009.97-1009.988. Adopt procedures to govern contract dispute proceedings between the board and its vendors. Amend board contracts to provide Florida ABLE, Inc., or the Florida ABLE program with contractual services. (aa) Adopt rules relating to the purchase and use of a prepaid college plan authorized under s. 1009.98 or a college savings plan authorized under s. 1009.981 for the Gardiner Scholarship Program pursuant to s. 1002.385, which may include, but need not be limited to: * * * (6) QUALIFIED TUITION PROGRAM STATUS.— Notwithstanding any other provision of ss. 1009.97- 1009.984, the board may adopt rules necessary for the prepaid program and the savings program each to retain its status as a “qualified tuition program” in order to maintain its tax-exempt status or other similar status of the program, purchasers, and qualified beneficiaries under the Internal Revenue Code. The board shall inform participants in the prepaid program and the savings program of changes to the tax or securities status of advance purchase contracts and participation agreements. Rule 19B-14.001 provides, in plain language, “[t]hese rules shall apply to the resolution of all claims, disputes or controversies related to or arising from contracts” and “shall constitute the sole procedure for the resolution of all claims under all such contracts.” The term “shall” is defined as “directives to express what is mandatory.” See Merriam-Webster On-line Dictionary (https://www.merriam-webster.com/dictionary/shall). Rule 19B-14.002 provides the following: 19B-14.002 Initiating Proceedings Related to Contracts with the Board. Any person or firm that has entered into a contract with the Board and has been adversely affected by a decision of the Board or its employees concerning such contract shall file a written petition to contest the decision with the Board within 21 days of the date of the receipt by such person or firm of the decision. The notice of the decision shall be provided in writing to the person or firm by the Executive Director. The date of receipt of the notice shall be either the date on which the notice is received by the person or firm if the notice is sent by registered mail or by other means of delivery which results in a receipt for delivery or the date of the decision plus five days if the notice is sent by regular mail. Any person or firm who receives such written notice of the decision and who fails to request a hearing within twenty-one days, shall have waived his right subsequently to request a hearing on such matters. The petition shall include the following: The name and business address of the person or firm which claims to be adversely affected by a decision of the Board or its employees; A concise statement of the ultimate facts upon which the claim arose; The date and subject of the contract under which the claim arose; A statement of all disputed issues of material fact upon which the claim is based or, if there are none, the petition shall so indicate; A concise statement which explains how the substantial interests of the person or firm are affected by the decision of the Board or the Board’s employees; A concise statement of the provisions of the contract together with any fed., state and local laws, ordinances or code requirements or customary practices and usages in the industry asserted to be applicable to the questions presented by the claim; The demand for relief sought by the claimant; The date of the occurrence of the event or events which gave rise to the claim and the date and manner of the Contractor’s compliance with the contract; and Any other material information the person or firm contends is material to its claim. The written petition shall be printed, typewritten or otherwise duplicated in legible form. The petition shall include copies of all documents which support the claim. Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.971 FS. History–New 6-20- 96.[8] Rule 19B-14.002(1) clearly states that any person or firm (vendor) “shall file a written petition to contest the decision with the Board within 21 days of the date of the receipt by such person or firm of the decision.” The next sentence provides the method by which the specific date of receipt of the notice is determined, and when the clock starts ticking for the affected vendor to file a written petition. However, the rule fails to establish a time frame in which Respondent must issue the notice once the adverse decision is made. Further, there are no specific requirements for the content of the written notice, such as explaining the basis for the adverse decision. Although Mr. Thompson asserted that any affected vendor could file a written petition to contest any adverse decision by the Board or a Board employee, there is no such language in the rule, the “sole procedure” for a vendor to do so. Rule 19B-14.002(2) provides specific requirements for the written petition. Although a vendor may be able to include some of the required information for the written petition, the requirement that the vendor “shall” provide a “concise statement of the ultimate facts upon which the claim arose”; a “statement of all disputed issues of material fact upon which the claim is based ...”; and a “concise statement which explains how the substantial interest of the person or firm are affected by the decision of the Board or the Board’s employees” is impossible without specific information from Respondent as to the circumstances giving rise to the adverse decision. Mr. Thompson testified there was nothing to preclude an affected vendor from filing a public records request seeking the information desired. 8 These citations are not accurate. In 1996, Respondent listed sections 120.53(1) and 240.551(5), Florida. Statutes (1995), as the “Specific Authority” and section 240.551 as the “Law Implemented.” Rule 1-1.012, Legal Citations and History Notes, provides the specific method to record legal citations and history notes. However, this is contrary to the specific language of the rule, which neither requires the Board to explain the basis for their adverse decision nor provides any procedure for an adversely affected vendor to obtain the information necessary to file a written petition. There is no such language in the rule, the “sole procedure” for a vendor to do so. Rule 19B-14.003 provides the following: 19B-14.003 Resolution of Claims. Upon receipt of a formal written petition, the Executive Director shall attempt to resolve the matters that are the subject of the petition by mutual agreement within fifteen (15) days, excluding Saturdays, Sundays, and legal holidays. If the petition is not resolved by mutual agreement within fifteen (15) days, excluding Saturdays, Sundays and legal holidays, the Executive Director shall deliver, within forty-five (45) days from the date such petition was filed, to the person or firm that filed the petition a determination that indicates the Board’s written response to the claims or such person or firm. Unless the person or firm who filed the petition agrees to the determination of the Board and a consent order adopting the determination is entered within thirty (30) days from the receipt by the person or firm of the Board’s determination, the Executive Director, if no disputed issues of material fact are involved, shall designate a hearing officer who shall conduct an informal proceeding pursuant to Section 120.57(2), F.S., and applicable Board rules. The hearing officer designated by the Executive Director shall be either a person who is a member in good standing of the Florida Bar or a person knowledgeable by virtue of education or practical experience with the subject matter of similar contracts involving state agencies. If there is a disputed issue of material fact, the Executive Director shall refer the petition to the Division of Administrative Hearings of the Department of Management Services for proceedings under Section 120.57(1), F.S. Once the Executive Director has referred the dispute to a hearing officer pursuant to subsection (3) or (4), no further information or amendment of the claims shall be permitted. The statements, facts, documents and materials contained in the petition filed pursuant to Rule 19B-14.002, F.A.C., or which are submitted to and received by the Executive Director prior to the determination made pursuant to subsection 19B- 14.003(2), F.A.C., shall constitute the entire factual record submitted by a person or firm on which a claim against the Board may be sustained in any hearing under this rule. A person or firm making a claim against the Board shall not be allowed to submit to a hearing officer any statements, facts, documents or materials to support any claim against the Board which were not submitted to the Executive Director by the person or firm making the claim prior to the Executive Director’s determination pursuant to subsection 19B- 14.003(2), F.A.C. The Board may submit statements, facts, documents or materials in response to the factual record submitted by a person or firm making a claim against the Board or to sustain the decision of the Executive Director which was made pursuant to subsection 19B- 14.003(2), F.A.C. The filing of a petition by a person or firm pursuant to the provisions of this rule shall not affect the duty or obligation of the person or firm pursuant to the contract under which the claim or dispute arose. Any person or firm which files a petition pursuant to the provisions of this rule expressly agrees that it shall continue to proceed with all scheduled work as determined under any prior existing schedule pursuant to such contract unless otherwise agreed in writing between the person or firm and the Board. Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.971 FS. History–New 6-20- 96.[9] Rule 19B-14.003(1) adds the word “formal” before “written petition” in the first sentence. The addition of this one word, without any definition and without any previous mention in rule 19B-14.001 (the “sole procedure”), imposes another requirement on vendors. Yet, there is no direction provided as to what that “formal written petition” includes. Respondent aptly states in its PFO: “A rule may be vague if it does not define important terms or standards.” Such is the case when a word is inserted and not defined. The remainder of rule 19B-14.003(1) places a duty on the Board’s Executive Director to attempt a resolution of the “formal written petition” within 15 business days of its receipt. Rule 19B-14.003(3) establishes that if no resolution is reached, the matter is referred to a hearing officer designated by the Board’s Executive Director for a hearing not involving disputed issues of fact (formerly and commonly referred to as an “informal hearing”). This informal hearing is to be conducted pursuant to section 120.57(2), Florida Statutes. Rule 19B-14.003(4) establishes that if no resolution is reached, the matter is referred to DOAH for a hearing involving disputed issues of fact (formerly and commonly referred to as a “formal hearing”), “for proceedings under section 120.57(1),F.S.” However, rule 19B-14.003(5) provides that regardless of which referral is made (either rule 19B-14.003(3) or (4)), “no further information or amendment of the claims shall be permitted.” This, in effect, precludes the discovery process at DOAH, and purports to cut off the authority of the presiding administrative law judge to grant leave to amend the petition. 9 See Footnote 8 above. Rule 19B-14.003(6) then proceeds to place further restrictions on how either hearing (informal or formal) must proceed. Subsection (6) restricts what “shall constitute the entire factual record” to the “statements, facts, documents and materials contained in the petition,” and that which is “submitted to and received by the Executive Director prior to the determination made pursuant to subsection Rule 19B-14.003(2), F.A.C.” This phrase is emphasized again with the following statement: “[A] person or firm making a claim against the Board shall not be allowed to submit to a hearing officer any statements, facts, documents or materials to support any claim against the Board which were not submitted ... prior to the Executive Director’s determination.” (Emphasis added). However, the Board, itself, “may submit statements, facts, documents or materials in response to the factual record submitted by person or firm making a claim against the Board, or to sustain the decision of the Executive Director which was made pursuant to subsection 19B-14.003(2), F.A.C.” Overall, these three rules set forth the procedures, in either informal or formal proceedings, to adjudicate contractual disputes. To prohibit the adversely affected party from fully prosecuting their claim, while allowing the Board to submit additional material to the trier of fact is not fair, and is contrary to the procedures in place at DOAH, contrary to several statutory provisions found in sections 120.569 and 120.57(1), and the discovery permitted at DOAH under the Florida Rules. of Civil. Procedures. The phrase “judge, jury, and executioner” may not be an incorrect analogy. Each rule cites as its “Rulemaking Authority” section 1009.97(1), (4), and (6). The Board is a creature of the Florida Statutes, created by section 1009.971(1), “with all the powers of a body corporate,” yet subsection (1) does not provide any rulemaking authority. Further, nowhere does this section grant the Board the ability to adopt rules to bind another state agency, that is governed by different statutes and rules. Section 1009.971(6) allows the Board to “adopt rules necessary for the prepaid program and the savings program... to maintain its tax-exempt status or other similar status of the program,” but does not specifically provide that the Board may impose its rules on another state agency. Section 1009.971(4)(b) grants the Board the “power and duty to… (a)dopt an official seal and rules.” This subsection does not expound on what the rules may impart, and thus does not grant the specific authority to do more. Section 1009.971(4)(y) grants the Board the “power and duty to… “(a)dopt procedures to govern contract dispute proceedings between the board and its vendors.” Although the Board has the ability to adopt rules, that authority does not grant the Board the ability to impose its “procedures” on another state agency that is governed by different statutes and rules. The term “procedures” is not defined in the statute. The common definition of procedures is “a particular way of accomplishing something.” See Merriam-Webster On-line Dictionary (https://www.merriam- webster.com/dictionary/procedure). In the legal arena, the term “procedure” is defined as “[T]hat which regulates the formal steps in an action or other judicial proceeding; a form, manner, and order of conducting suits or prosecutions.” Black’s Law Dictionary 1368 (4th ed. 1968). Another characterization of the term “procedure” is the structure for carrying on a lawsuit, including the pleadings, discovery process, evidence, and practice. The Division10 provides independent administrative law judges to conduct hearings pursuant to sections 120.569 and 120.57(1), and other laws. Section 120.569 sets forth the type of proceedings to be conducted: “Decisions which affect substantial interests.” The petition for a hearing is 10 The Division operates two distinct programs: the adjudication of administrative cases by administrative law judges (ALJs); and the adjudication of workers’ compensation claims by the judges of compensation claims. In this instance, the Division employs ALJs to conduct hearings in which the substantial interests of a person or entity are determined by an agency and involve a disputed issue of material fact. filed with the affected agency, which in turn has 15 days to notify DOAH, although the parties may attempt to resolve the dispute and a delay in sending the case to DOAH occurs. Once the case is at DOAH, an ALJ is assigned and the affected agency is mandated to “take no further action with respect to the proceeding ... except as a party litigant, as long as the division has jurisdiction over the proceeding under s. 120.57(1).” The “presiding officer has the power to swear witnesses and take their testimony under oath, to issue subpoenas, and to effect discovery on the written request of any party by any means available to the courts ” See § 120.569(2)(f), Fla. Stat. Further, the presiding officer shall exclude irrelevant, immaterial, or unduly repetitious evidence, while allowing “all other evidence of a type commonly relied upon by reasonably prudent persons in the conduct of their affairs ” See § 120.569(2)(g), Fla. Stat. The Florida Administration Commission, composed of the Governor and Cabinet, adopted the hearing procedures that DOAH utilizes, commonly referred to as the Uniform Rules. See §§ 14.202 and 120.54(5), Fla. Stat. Chapter 28-106, Part I, sets forth the general provisions that apply to “all proceedings in which the substantial interest of a party are determined by the agency and shall be construed to secure the just, speedy, and inexpensive determination of every proceeding.” Part II sets forth those processes for hearings involving disputed issues of material fact, which are at specific odds with rule 19B-14.003.11 Section 120.54(5)(a)2. provides that an “agency may seek exceptions to the uniform rules of procedure by filing a petition with the Administration Commission.” The Board provided no evidence that it has sought and received an exception that would authorize the challenged rules. 11 Chapter 28-106, Part III, provides the uniform procedures for proceedings and hearings not involving disputed issues of material fact; Part IV provides the uniform procedures for mediations; Part V provides the process for emergency actions; and Part VI provides conflict direction. It is true that the Board can adopt procedures to govern contract dispute proceedings. However, the challenged rules, read separately and as a whole, are an invalid exercise of delegated legislative authority.
The Issue Whether Petitioner, Cordelia Brown, is eligible to receive a scholarship offered by the 2015 Florida Best and Brightest Teacher Scholarship Program.
Findings Of Fact The Florida Legislature created the Scholarship Program during its 2015 Session. Through the 2015 General Appropriations Act, the Legislature adopted proviso language in Specific Appropriation 99A (“Appropriation 99A”) allocating $44,022,483.00 to “award a maximum of 4,402 teachers with a $10,000 scholarship based on high academic achievement on the SAT or ACT.” See Ch. 2015-232, § 2, 99A, at 27, Laws of Fla. To be eligible to receive the scholarship, Appropriation 99A stated that, “a teacher must have scored at or above the 80th percentile on either the SAT or the ACT based upon the percentile ranks in effect when the teacher took the assessment.”2/ Appropriation 99A further provided that an “eligible teacher” was to apply to the employing school district no later than October 1, 2015. Thereafter, each school district was to submit to the Department the number of eligible teachers who qualified for the scholarship by December 1, 2015. By February 1, 2016, the Department was to disburse scholarship funds to each school district for each teacher who was to receive the scholarship. By April 1, 2016, each school district was to pay the scholarship award to each eligible teacher. Appropriation 99A further stated that if the number of eligible teachers exceeded the total appropriated amount ($44,022,483.00), the Department was to prorate the per teacher scholarship amount. On September 3, 2015, Petitioner timely applied to the School Board to receive the scholarship award under the Scholarship Program. On November 11, 2015, the School Board notified Petitioner that it had been determined that she did not qualify for the Scholarship Program. The School Board explained that Petitioner was not a “classroom teacher.” Therefore, she was not eligible to receive the scholarship. Petitioner is a first-year employee with the School Board. The School Board hired her at the start of the 2015-2016 school year. The School Board hired Petitioner as a speech- language pathologist. Prior to working for the School Board, Petitioner taught in Fulton County, Georgia. One factor in her decision to accept the School Board’s offer of employment and relocate to Florida was the Scholarship Program. For the 2015-2016 school year, Petitioner entered into a “Probationary Contract of Employment for Instructional Personnel of the Public Schools” with the School Board.3/ Petitioner holds a two-year, temporary teaching certificate issued by the Department in the area of Speech-Language Impaired. For the 2015-2016 school year, the School Board assigned Petitioner to work as a speech language pathologist at Brentwood Elementary. All of Petitioner’s students were identified as exceptional student education or “ESE” students. At Brentwood Elementary, Petitioner led two class subjects, Speech Therapy and Language Therapy. In her Speech Therapy class, Petitioner addressed her students’ problems with speech and fluency (e.g., stuttering). Petitioner’s Language Therapy class focused on the content of what is being said (i.e., expressive and receptive language). Petitioner instructed students in areas including reading, reading aloud, and analysis. Petitioner instructed a total of 25 students over six class periods. Her classes consisted of small groups of two-to- four students. Petitioner’s students ranged in age from pre- kindergarten through fifth-grade. For her six classes, Petitioner prepared daily lesson plans. Her lesson plans targeted the goals and objectives on each of her students’ individualized education plans. She aligned her lesson plans with Florida state standards. Some of the state standards are general education grade-level standards, and some are specific to speech or language therapy. Each lesson plan included sections addressing “Setting the Purpose for Learning,” “Instruction and Assessment,” “Teacher Supported Guided Instruction,” and “Application.” Petitioner submitted her lesson plans to her assistant principal for a quarterly review. Petitioner was observed and evaluated by her assistant principal using the same form used for evaluating other teachers at Brentwood Elementary. Petitioner was observed and evaluated on criteria related to the instruction she provided to her students as well as the culture of her classroom. The School Board reported that Petitioner is “outstanding” in her role and was doing “a great job” according to the Brentwood Elementary administration. The School Board further relayed that “there is no question that [Petitioner] is an up-and-coming great professional.” The School Board denied Petitioner’s application because it did not consider a speech language pathologist to be eligible for the Scholarship Program. The School Board explained that it understood the term “teacher” as used in Appropriation 99A to mean a “classroom teacher” as that term is defined in section 1012.01(2)(a). The School Board did not believe that Petitioner fit into the definition of a “classroom teacher.” The School Board described a “classroom teacher” as a “person who is in charge of the whole classroom who is doing the daily instructional services to the kids.” In contrast to a “classroom teacher,” the School Board considers speech-language pathology as a type of “related service.” Related services are services provided to exceptional- education students to assist them in accessing and benefiting from classroom instruction. The School Board considers its “classroom teachers” and speech language pathologists to possess different skill-sets, bases of knowledge, and job goals and responsibilities. Speech-language pathologists have a specific role to support other teachers by helping students meet their educational goals. The School Board described Petitioner’s job duties as “therapeutic services.” In general, speech-language pathologists are professionals who assess, diagnose, and provide therapeutic treatment for various speech, language, and hearing disorders. In her role at Brentwood Elementary, Petitioner provided a comprehensive program to her ESE students to treat those students’ specific speech or language impairments. Petitioner’s Speech Therapy and Language Therapy classes were provided to two- to-four students at a time who were evaluated and deemed to have a disability that impacted their educational classroom performance. Petitioner taught her selected students specific skills or coping mechanisms that would allow them to overcome their impairments in order to better access instruction and curriculum. In other words, Petitioner’s focus was to give her students the ability to learn. The School Board further explained that Petitioner’s “lesson plans” are referred to in the therapy setting as “plans of care.” Plans of care are similar in form to lesson plans created by classroom teachers, but they differ in substance. Classroom teachers’ lesson plans set forth strategies for an educator to deliver instruction to an entire classroom. Speech- language pathologists’ plans of care, on the other hand, set forth tailored therapy plans that address an individual student’s specific impairment. In addition, Petitioner’s class roster is referred to as a “caseload.” Furthermore, while the Petitioner’s Speech Therapy and Language Therapy classes were assigned course codes similar to general education course codes, her two classes were specially coded. Petitioner’s students did not receive course credit for attending her classes with the therapy course code designation. Testimony at the final hearing, however, revealed that in an academic setting the goals and responsibilities of a speech-language pathologist have objectives similar to a “classroom teacher’s.” Sonia Figaredo-Alberts, the School Board’s executive director of pupil support services, who is also a speech-language pathologist, recognized that Petitioner “is instructing students with communication disorders.” Ms. Figaredo-Alberts explained that “we, as speech and language pathologists assist with very specific targeted areas . . . we do a very therapeutic intervention. We’re teaching [our students]. There’s no question that our therapy is about teaching that student specific skills . . . in a very thorough and specialized area.” According to Appropriation 99A, the Legislature gave the decision regarding a “teacher’s” eligibility to receive a scholarship to the school districts. Appropriation 99A directed each Florida school district to receive teacher applications for the Scholarship Program and to submit the number of eligible teachers who qualified for the scholarship to the Department. While processing applications, several school districts sent questions to the Department regarding the implementation of the Scholarship Program. In particular, the Department received inquiries regarding who should be considered a “teacher” for purposes of the scholarship. Although the Department administered the Scholarship Program, Appropriation 99A did not grant the Department rulemaking authority. Therefore, the Department did not adopt rules regarding what teachers were eligible for the scholarship. The Department, however, did prepare and issue a memorandum addressing school districts’ commonly asked questions. On July 27, 2015, Hershel Lyons, chancellor of the Division of Public Schools for the Department, issued a memorandum entitled “Guidance on Best and Brightest Teacher Scholarship” (the “Memorandum”) to the Florida School District Superintendents. The Memorandum provided that “[t]eachers eligible for the Best and Brightest Teachers Scholarship Program are classroom teachers as defined in [section] 1012.01(2)(a), F.S., who are employed by Florida school districts, charter schools, or the [Florida School for the Deaf and Blind].” The Department based its interpretation of the term “teacher” on the various classes of employees set forth in section 1012.01(2)(a). The Department determined that the term “classroom teacher” in section 1012.01(2)(a) provided the best definition of the word “teacher” for purposes of the Scholarship Program. On September 4, 2015, Chancellor Lyons issued a second memorandum to School District Superintendents with an attached Frequently Asked Questions document. The Frequently Asked Questions provided, in relevant part: What are the eligibility criteria for the Best and Brightest Teacher Scholarship Program? In order to meet eligibility requirements for the scholarship, the individual must: Be a classroom teacher as defined in section 1012.01(2)(a), Florida Statutes . . . * * * According to section 1012.01(2)(a), F.S., what is the definition of a classroom teacher? Classroom teachers are staff members assigned the professional activity of instructing students in courses in classroom situations, including basic instruction, exceptional student education, career education and adult education, including substitute teachers. Upon reviewing the Memorandum, the School Board believed the Department confirmed its view that “classroom teachers” were the only individuals eligible for the Scholarship Program. The Department did not follow up to determine whether any school district followed its guidance. The Department did not believe that Appropriation 99A gave it that authority. The Department received the names of 5,332 teachers that the school districts determined were eligible for the scholarship awards. Appropriation 99A directed the Department to act as the fiscal agent for the Scholarship Program. As Appropriation 99A directed, the Department disbursed scholarship funds by February 1, 2016.4/ The Department prorated the scholarship funds so that each eligible teacher received approximately $8,300. Based on the evidence and testimony presented during the final hearing, Petitioner proved, by a preponderance of the evidence that she qualifies for the Scholarship Program. Accordingly, the School Board should take the necessary steps to ensure that Petitioner receives the appropriate scholarship award contained in Appropriations 99A.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Sarasota County, Florida, issue a final order fulfilling its responsibilities under Appropriation 99A, i.e., submitting Petitioner’s name to the Department of Education as a teacher eligible for the scholarship created by the 2015 Florida Best and Brightest Teacher Scholarship Program. DONE AND ENTERED this 13th day of June, 2016, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of June, 2016.
