[Federal Register Volume 61, Number 32 (Thursday, February 15, 1996)]
[Notices]
[Pages 5992-5993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3450]



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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.

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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