State of North Carolina s68
STATE OF NORTH CAROLINA IN THE OFFICE OF
ADMINISTRATIVE HEARINGS
COUNTY OF WAKE 06 DHR 1916
NIDAL DAHIR, )
)
Petitioner, )
)
v. ) ) DECISION
NORTH CAROLINA DEPARTMENT )
OF HEALTH AND HUMAN SERVICES, )
DIVISION OF PUBLIC HEALTH, )
)
Respondent. )
On April 16, 2007, Administrative Law Judge Melissa Owens Lassiter heard this contested case in Raleigh, North Carolina. On April 20, 2007, the undersigned issued an Order determining that Respondent acted properly when it issued a Notice of Intent to Disqualify Petitioner from the WIC Program. The undersigned ordered Respondent to file a proposed decision with the Office of Administrative Hearings reflecting that decision on or before May 8, 2007. On May 3, 2007, Respondent filed its proposed Decision with the Office of Administrative Hearings.
APPEARANCES
For Petitioner: Nidal Dahir, Pro Se
PO Box 14007
Raleigh, NC 27620
For Respondent: Donna Smith
Assistant Attorney General
PO Box 629
Raleigh, NC 27602-0629
ISSUE
Whether Respondent correctly issued an intent to disqualify Petitioner's store, Triangle D #4 Food Mart, from participating as a vendor in the Special Supplemental Nutrition Program for Women, Infants and Children (“WIC Program”) for three years for
overcharging for WIC supplemental foods provided on or about 6/23/06 and 7/28/06, in violation of 7 C.F.R. § 246.12(l)(1)(iii)(C), 10A N.C.A.C. 43D .0706(c)(3), .0706(c)(4), .0706(c)(5), .0706(g), .0706(g)(2)(B) and the WIC Vendor Agreement?
EXHIBITS ADMITTED INTO EVIDENCE
For Petitioner: None
For Respondent: 1 – 11
FINDINGS OF FACT
Based on the evidence presented by the parties, including sworn testimony of witnesses and documentary evidence, the undersigned makes the following:
1. The WIC Program is the federally funded Special Supplemental Nutrition Program for Women, Infants and Children, administered in North Carolina by Respondent.
2. The purpose of the WIC Program is to provide supplemental foods to pregnant women, infants, and children up to age five (called "participants"), who are at nutritional risk.
3. WIC supplemental foods are provided to participants through the retail grocery system via food instruments that list the authorized foods a participant may obtain. A participant may get some or all of the foods listed on a food instrument. The WIC Program contracts with retail grocery stores to serve as authorized WIC vendors. As an authorized WIC vendor, the vendor agrees to accept food instruments in exchange for WIC supplemental foods provided to participants. The WIC vendor deposits the food instruments in its bank, and is paid by the WIC Program for the supplemental foods provided to participants.
4. Petitioner owns Triangle D #4 Food Mart, a store located at 403 West Trinity Avenue in Durham, North Carolina. Petitioner operates his store as an authorized WIC vendor, stamp #7827.
5. The WIC Vendor Agreement is the contract between Petitioner and the Respondent under which the Petitioner agreed to comply with the terms of the Agreement and state and federal WIC Program rules, regulations and laws. A WIC vendor enters into a new Agreement each year to continue WIC vendor authorization.
6. The procedure for properly handling a WIC food instrument includes: totaling the price of the authorized supplemental foods provided, entering the total price of the supplemental foods provided in the “Pay Exactly” box on the food instrument, filling in the date of the transaction on the food instrument, and then obtaining the countersignature of the WIC customer on the food instrument. The vendor cannot enter a price on the food instrument that exceeds the total amount of the current shelf prices for the supplemental foods provided.
7. On June 27, 2005, Petitioner signed a WIC Vendor Agreement agreeing to be a WIC vendor from October 1, 2005, through September 30, 2006.
8. On June 22, 2005 and July 20, 2006, the Lincoln Community Health Center WIC Program conducted annual vendor training on WIC Program procedures, rules and regulations. The Lincoln Center distributed copies of the North Carolina WIC Vendor Manual to the vendor representatives attending these training sessions.
9. A store representative from Petitioner’s Triangle D #4 Food Mart attended both training sessions.
10. By Notice of Violation dated July 6, 2006, Respondent informed Petitioner that a recent compliance buy at Triangle D #4 Food Mart revealed a violation of vendor overcharging. The Notice advised Petitioner that additional compliance buys would be conducted at the store, and any further violations could lead to disqualification of Triangle D #4 Food Mart from the WIC Program. The Notice also offered Petitioner the opportunity to receive additional vendor training through the local WIC agency. On July 28, 2006, Respondent resumed its investigation of Petitioner's store.
11. Tracye Butler is employed by the North Carolina Department of Health and Human Services as a WIC Program Integrity Administrative Assistant. Part of her duties for the WIC Program includes conducting compliance buys at authorized WIC vendors to determine compliance with the laws, rules, and regulations governing the WIC Program.
12. On June 23, 2006 and July 28, 2006 respectively, Ms. Butler conducted compliance buys at Triangle D #4 Food Mart. On each of these dates, Ms. Butler posed as a WIC participant, and obtained WIC supplemental foods using a WIC food instrument.
13. Immediately following each compliance buy, Butler went to a separate location, and recorded the supplemental foods obtained with the food instrument and the price marked for each food item. For each of Butler’s compliance buys, the WIC Program was able to determine the actual total price of the supplemental foods provided to Butler in exchange for the WIC food instrument.
A PATTERN OF VENDOR OVERCHARGING FOR WIC SUPPLEMENTAL FOODS
6/23/06 COMPLIANCE BUY:
14. When investigator Butler entered Petitioner's store on 6/23/06, she used food instrument #06436403 to obtain WIC supplemental foods listed on the food instrument.
15. Butler selected one gallon of Maola whole milk marked at $4.49, two 46-oz. containers of Libby’s Juicy Juice marked at $3.29 each, one dozen P&R extra large eggs marked at $1.89, and one 16-oz. package of Kraft Deli Deluxe cheese marked at $5.39.
16. The actual total price of the supplemental foods Butler obtained with food instrument #06436403 was $18.35. Petitioner’s employee entered $22.00 in the "Pay Exactly" box of the redeemed food instrument.
17. The amount Petitioner’s employee entered in the "Pay Exactly" box of redeemed food instrument #06436403 exceeded the actual total price of the supplemental foods provided to Butler by $3.65.
7/28/06 COMPLIANCE BUY:
18. When investigator Butler returned to Petitioner's store on 7/28/06, she used food instrument #06436416 to obtain WIC supplemental foods listed on the food instrument.
19. Butler selected two gallons of Maola whole milk marked at $4.79 each, one 46-oz. container of Libby’s Juicy Juice marked at $3.29, and two 13-oz. boxes of General Mills Kix cereal marked at 36 cents per ounce ($4.68 per box).
20. The actual total price of the supplemental foods Butler obtained with food instrument #06436416 was $22.23. Petitioner’s employee entered $28.00 in the "Pay Exactly" box of the redeemed food instrument.
21. The amount Petitioner’s employee entered in the "Pay Exactly" box of redeemed food instrument #06436416 exceeded the actual total price of the supplemental foods provided to Butler by $5.77.
INTENT TO DISQUALIFY
22. 10A N.C.A.C. 43D .0202(20) defines “overcharge” by a WIC vendor as intentionally or unintentionally charging more for supplemental food provided to a WIC customer than to a non-WIC customer, or charging more than the current shelf price for supplemental food provided to a WIC customer.
23. 7 C.F.R. § 246.12(l)(1)(iii)(C), incorporated by reference at 10A N.C.A.C. 43D .0706(g), provides that a vendor must be disqualified for three years for a pattern of vendor overcharges. (Emphasis added)
24. 10A N.C.A.C. 43D .0706(g)(2) (previously .0706(g)(2)(B)) provides that a “pattern” of overcharging shall be established when there are two occurrences of vendor overcharging within a 12-month period.
25. Applying the foregoing provisions to the results of the compliance buys on 6/23/06 and 7/28/06, Respondent notified Petitioner by certified letter dated October 3, 2006 of its intent to disqualify Triangle D #4 Food Mart from participating as a WIC vendor for a period of three years. Respondent advised Petitioner of his right to appeal its decision to the Office of Administrative Hearings.
26. Prior to issuing its intent to disqualify the Petitioner’s store, as required by 7 C.F.R. 246.12(l)(1)(ix), 246.12(l)(8), and 10A N.C.A.C. 43D .0706(k), Respondent considered participant access to other WIC vendors.
27. On October 30, 2006, Petitioner filed a petition for a contested case hearing appealing Respondent’s notice of intent to disqualify Petitioner from being a WIC vendor.
28. At the administrative hearing, Petitioner’s manager acknowledged that he wrote the $22.00 and $28.00 amounts in the “Pay Exactly” boxes on the subject food instruments. In both instances, Petitioner’s manager indicated that he did not intentionally overcharge Respondent for redemption of these food instruments, and that neither he nor Petitioner intended to make money from the WIC program.
CONCLUSIONS OF LAW
1. Both parties are properly before the Office of Administrative Hearings, and the Office of Administrative Hearings has personal and subject matter jurisdiction over this case.
2. The North Carolina WIC Program is vested with the authority to authorize and disqualify WIC vendors pursuant to N.C. Gen. Stat. § 130A-361 and 10A N.C.A.C. 43D .0700 et seq.
3. As an authorized WIC vendor, Petitioner is bound by the terms of the WIC Vendor Agreement and the administrative rules, regulations, and laws governing the WIC Program.
4. 10A N.C.A.C. 43D .0202(20) defines a vendor “overcharge” as intentionally or unintentionally charging more for supplemental food provided to a WIC customer than to a non-WIC customer, or charging more than the current shelf price for supplemental food provided to a WIC customer.
5. 7 C.F.R. § 246.12(l)(1)(iii)(C), incorporated by reference at 10A N.C.A.C. 43D .0706(g), requires that a vendor must be disqualified for three years for a pattern of vendor overcharges.
6. 10A N.C.A.C. 43D .0706(g)(2) (previously .0706(g)(2)(B)) provides that a pattern shall be established when there are two occurrences of vendor overcharging within a 12-month period.
7. A preponderance of the evidence established a pattern of vendor overcharges occurred at Triangle D #4 Food Mart, through the two above-noted occurrences within a 12-month period. This pattern of overcharging violated 7 C.F.R. § 246.12(l)(1)(iii)(C), 10A N.C.A.C. 43D .0706(c)(3), .0706(c)(4), .0706(c)(5), .0706(g), .0706(g)(2) (previously .0706(g)(2)(B)), and the WIC Vendor Agreement between Respondent and Petitioner. The definition of “pattern” of overcharging outlined in 10A N.C.A.C. 43D .0202(20), necessarily dictates that Petitioner’s intent or lack of intent to overcharge in this case is irrelevant to this determination.
8. Pursuant to the regulatory scheme set forth at 7 C.F.R. § 246.12(l)(1)(iii)(C) and 10A N.C.A.C. 43D .0706(g)(2) (previously .0706(g)(2)(B)), Respondent correctly issued its intent to disqualify Petitioner’s Triangle D #4 Food Mart from participating as a WIC vendor for a period of three years.
9. Respondent did not act in an arbitrary and capricious manner in administering the WIC Program rules, regulations, and law, did not fail to act as required by law or rule, did not fail to use proper procedure, did not act erroneously, nor did it exceed its authority or jurisdiction.
DECISION
Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned determines that Respondent’s decision to disqualify Petitioner's store, Triangle D #4 Food Mart, as an authorized WIC vendor for three years, should be UPHELD.
NOTICE AND ORDER
The North Carolina Department of Health and Human Services, Division of Public Health will make the Final Decision in this contested case. N.C. Gen. Stat. § 150B-36(b), (b1), (b2), and (b3) enumerate the standard of review and procedures the agency must follow in making its Final Decision, and adopting and/or not adopting the Findings of Fact and Decision of the Administrative Law Judge.
Pursuant to N.C. Gen. Stat. § 150B-36(a), before the agency makes a Final Decision in this case, it is required to give each party an opportunity to file exceptions to this decision, and to present written arguments to those in the agency who will make the Final Decision. N.C. Gen. Stat. 150B-36(b)(3) requires the agency to serve a copy of its Final Decision on each party, and furnish a copy of its Final Decision to each party’s attorney of record and to the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, NC 27699-6714.
This the 14th day of May, 2007.
______
Melissa Owens Lassiter
Administrative Law Judge
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