[Federal Register: February 15, 1996 (Volume 61, Number 32)] [Notices] [Page 5992-5993] From the Federal Register Online via GPO Access [wais.access.gpo.gov] ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION Arbitration Panel Decision Under the Randolph-Sheppard Act AGENCY: Department of Education. ACTION: Notice of arbitration panel decision under the Randolph- Sheppard Act. ----------------------------------------------------------------------- SUMMARY: Notice is hereby given that on April 13, 1994, an arbitration panel rendered a decision in the matter of Betty Moffitt v. Tennessee Department of Human Services, (Docket No. R-S/92-8). This panel was convened by the U.S. Department of Education pursuant to 20 U.S.C. 107d-2, upon receipt of a complaint filed by Betty Moffitt. FOR FURTHER INFORMATION CONTACT: A copy of the full text of the arbitration panel decision may be obtained from George F. Arsnow, U. S. Department of Education, 600 Independence Avenue, SW., Room 3230, Switzer Building, Washington, DC 20202-2738. Telephone: (202) 205-9317. Individuals who use a telecommunications device for the deaf (TDD) may call the TDD number at (202) 205-8298. SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act (20 U.S.C. 107d-2(c)), the Secretary publishes a synopsis of arbitration panel decisions affecting the administration of vending facilities on Federal and other property. Background The complainant, Betty Moffitt, became a licensed manager in the Tennessee Business Enterprise Program on September 1, 1976, and was eventually assigned to Facility #299 at the Tennessee Valley Authority (TVA) Sequoyah Nuclear Power Plant on September 1, 1982. The Tennessee Department of Human Services (TDHS) is the designated State licensing agency (SLA) charged with the administration and operation of the Tennessee Vending Facility program. The Division of Internal Audit for TDHS conducted an in-depth examination and audit of Facility #299 for the calendar year 1987. TDHS found substantial and compelling discrepancies between the amounts of purchases and sales reported by the complainant and amounts of purchases and sales obtained by the auditors from independent sources. After a thorough analysis of all information, including an independent audit conducted by the Tennessee Department of Revenue that also demonstrated major inconsistencies, TDHS issued a letter to the complainant terminating her license effective February 9, 1991. Complainant allegedly violated Tennessee Rule 1240-6-6.3 (4), which mandates termination of license for falsification of records. The complainant appealed her termination of license by requesting and receiving a State fair hearing held on July 25 and 26, 1991. An opinion was issued by the hearing officer on January 31, 1992. The hearing officer sustained TDHS's termination of Ms. Moffitt's license based upon the evidence presented at the hearing. Specifically, the hearing officer ruled that the evidence substantiated the falsification allegations made by the SLA. Subsequently, the complainant filed a petition for reconsideration of the hearing officer's decision, which was denied in a written opinion on February 12, 1992. A notice of appeal was filed by the complainant, and on March 2, 1992, the hearing officer issued a final order adopting the earlier opinion of January 31, 1992. The complainant applied for and received reconsideration of the final order on March 6, 1992, which was denied by the Director of Appeals on March 10, 1992. On May 13, 1992, Ms. Moffitt filed a request with the Secretary of the U.S. Department of Education to convene an arbitration panel to review the final order of the hearing officer. A hearing by a Federal arbitration panel was held on September 3, 1993. Arbitration Panel Decision The arbitration panel reviewed the audit findings of TDHS's Division of Internal Audit of the complainant's Facility #299. The panel concluded that, while the findings of the audit were not conclusive, they were extraordinarily persuasive and were not satisfactorily rebutted. Further, the complainant's testimony and presentation of evidence did not satisfactorily rebut the evidence presented by TDHS. Accordingly, the panel found that in 1987 at Facility #299 the complainant underreported merchandise purchased by at least $58,000 and underreported sales by approximately $140,000 (this was a projected figure accepted by the panel). The panel further found that the underreporting was so significant that it could not be attributed to errors of negligence or inadvertence. The panel found that TDHS had demonstrated by a preponderance of [[Page 5993]] evidence that the complainant knowingly and intentionally filed false reports with the SLA that were misleading and that misrepresented the true financial status of Facility #299. The panel found that by doing so, the complainant avoided the payment of set-aside assessments on tens of thousands of dollars for 1987. The panel estimated that the actions of the complainant resulted in TDHS being deprived of approximately sixteen thousand dollars in fees for the year 1987, after considering allowances for legitimate losses in business and the set- aside fees paid by the complainant. Therefore, the panel concluded that the maintenance of financial accountability among the TDHS's licensed managers is vital to protect the stability, integrity, and future growth of the vending facility program. The panel considered that the SLA must have the authority to take extreme measures in those cases that threaten to undermine the basic principles on which the program operates. The panel ruled that the actions of TDHS were proper and appropriate in terminating the license of the complainant for violation of the State rule 1240-6-6.03 (4). The views and opinions expressed by the panel do not necessarily represent the views and opinions of the U.S. Department of Education. Dated: February 12, 1996. Howard R. Moses, Acting Assistant Secretary for Special Education and Rehabilitative Services. [FR Doc. 96-3450 Filed 2-14-96; 8:45 am] BILLING CODE 4000-01-P