South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
SCDHEC vs. College Corner

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
South Carolina Department of Health and Environmental Control

Respondent:
College Corner
 
DOCKET NUMBER:
06-ALJ-07-0821-CC

APPEARANCES:
For Petitioner: Nancy L. Roberts, Esquire

For Respondent: Pro Se
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Court (ALC or Court) pursuant to a request for a contested case hearing by Mr. Fayeq Yousef, owner of College Corner Grocery (Respondent). Respondent challenges the decision of the South Carolina Department of Health and Environmental Control (Department) to disqualify College Corner from participation as a vendor in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). After proper notice, a contested case hearing was held on March 20, 2007, at the Administrative Law Court.

ISSUES

1.      Did College Corner Grocery violate Section 7 CFR 246.12, S.C. Code Ann. §§ 43-5-910, et seq. and 25A S.C. Code Ann. Regs. § 61-94?

2.      What penalties are appropriate for the above named violations?

STIPULATIONS OF FACT

At the hearing into this matter and pursuant to ALC Rule 25(C), the parties entered the following written stipulations of fact into the Record:

1.      College Corner has been a participating WIC Vender since February 12, 2001.

2.      In the Agreement with DHEC, College Corner agreed to follow all applicable WIC regulations.

3.      College Corner received the WIC Training Manual.

4.      College Corner staff attended WIC training sessions on August 31, 2005 and August 15, 2006.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and taking into consideration the burden of persuasion and the credibility of the witnesses, I make the following findings of fact by a preponderance of evidence:

1. College Corner is a convenience store owned and operated by Fayeq Yousef. It is located at 1 Coming Street, Charleston, South Carolina, 29401.

2. College Corner has been a participating WIC vendor since February 12, 2001. Mr. Yousef entered into the most recent agreement with the Department in January of 2005 for College Corner to participate in the WIC program. Mr. Yousef also attended WIC Vender Training on behalf of College Corner on two separate occasions. The training sessions included information on how to properly redeem vouchers and what foods qualify for the program. Vendors accepted into the WIC Program receive posters of varying sizes and a WIC manual, all of which list the authorized foods. DHEC also maintains a list of authorized foods on their website.

The WIC Program operates by issuing vouchers to eligible participants for use in obtaining authorized supplemental foods. A dietician helps to determine what supplemental foods each individual participant needs in their diet. The allowable foods are selected to meet the daily nutritional needs of each individual WIC participant. Junk foods are not authorized by the WIC Program.

3 College Corner was flagged as a high risk vendor based on established criteria such as redemption history, an increase in dollar volume and error rates. College Corner was deemed to be a high risk vendor partly because of their extremely high volume of WIC purchases. High risk vendors have a high probability of committing vendor violations. Once a vendor is flagged as high risk, the state WIC Program conducts compliance investigations on the store.

A two person DHEC team was assigned to conduct three compliance buys at College Corner. A violation was found during each of the following compliance buys:

a. On April 4, 2006, a DHEC Buyer observed a female WIC participant using WIC vouchers to obtain two gallons of Pet Coolie drinks, which are not authorized under the WIC Program. Buyer then selected the following items for purchase: two one-gallon containers of Pet Blue Raspberry Coolie and two one-gallon containers of Pet Lemon Lime Coolie, one pound of Parade American cheese singles, one thirty-six ounce container of Quaker quick grits and two one-dozen cartons of Nature’s Design large white eggs. The only item displaying a shelf or sticker price was the Quaker Quick Grits. The cashier did not ask Buyer for her WIC identification card nor did she enter the purchase price of the goods on the WIC voucher before asking the Buyer to sign it. Furthermore, the cashier did not inform Buyer that six of her items were unauthorized. When the voucher was returned to DHEC, it was noted that College Corner had entered a purchase price of $42.60 for the above listed products.

b. On May 25, 2006, the DHEC Compliance Buyers made a second visit to College Corner. Buyer purchased one fifteen ounce box of Kellogg’s Apple Jacks, one twenty ounce box of Kellogg’s Frosted Flakes, one sixteen ounce package of Parade American Cheese Product, one eighteen ounce jar of Peter Pan Peanut Butter, six one gallon jugs of Pet Coolie Fruit Drinks and two dozen Nature’s Design eggs. Again, the cashier did not request the Buyer’s ID Card, did not fill out the purchase price of each item and did not inform the Buyer that some of her items were unauthorized. The cashier also allowed Buyer to purchase foods in excess of the amount permitted by WIC. This voucher came back to DHEC in the amount of $50.13. The only authorized items Buyer purchased were two dozen eggs.

c. On May 28, 2006, the Compliance Buyers made their third and last visit to College Corner. Buyer purchased six one-gallon jugs of ValuTime Grape and Fruit Punch, one jar of Peter Pan Crunchy peanut butter, one fourteen-ounce box of General Mills Lucky Charms cereal and one nineteen ounce box of Kellogg’s Fruit Loops cereal. None of these items were authorized foods under the WIC Program. The cashier did not ask for the Buyer’s ID Card and did not fill out the prices on the voucher. Furthermore, the cashier repeatedly asked the Buyer if he could have the milk listed on the WIC voucher that was not purchased. The total purchase price on the WIC voucher returned to DHEC for this purchase was $49.47.

Following the three compliance buys, DHEC sent a letter to Respondent informing him of the violations documented during the buys. The letter informed Respondent that he would be disqualified from the program for a period of four years and two months from the date of the letter. The letter listed the following sanctions:

a. Not marking WIC items with price labels or shelf tags-5 points

b. The failure to properly redeem food instruments-5 points

c. Providing unauthorized food items in exchange for food checks, including charging for supplemental food provided in excess of those listed on the food check- Automatic disqualification for one year

d. Charging for supplemental foods not received- Automatic disqualification for three years.

At the hearing Mr. Yousef offered no evidence or testimony to support his case. He argued that he should have been given prior warning[1] and put on probation for his violations. He stated that he tried to follow the regulations but during the first few months of last year he hired new cashiers, including his brother who does not speak English, who were untrained and inexperienced.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:

1. The Administrative Law Court has jurisdiction over this contested case matter pursuant to S.C. Code Ann. § 1-23-600(B) (Supp. 2006). Specifically, S.C. Code Ann. § 43-5-970 (Supp. 2006) provides an opportunity for a hearing from decisions of “the department imposing disqualification, penalties or requiring a vendor to refund monies for overcharging.” Furthermore, 25A S.C. Code Ann. Regs. § 61-94, Section 1001 provides for appeals from the Department’s determination.

In contested case hearings, the Administrative Law Judge is the fact finder. Brown v. S.C. Dep’t of Health and Envtl. Control, 348 S.C. 507, 560 S.E.2d 410 (2002). In weighing the evidence and deciding the merits of the case, the Administrative Law Judge must make findings of fact by a preponderance of the evidence. Anonymous (M-156-90) v. State Bd. of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998). Furthermore, the Department as an agency seeking to enforce an administrative order and the assessment of a civil penalty bears the burden of proof. ALC Rule 29(b); see also Nat’l Health Corp. v. S.C. Dep’t of Health and Envtl. Control, 298 S.C. 373, 380 S.E.2d 841 (Ct. App. 1989).

2. DHEC administers the Special Supplemental Food Program for Pregnant and Breast-feeding Women, Infants, and Children (WIC)[2] in South Carolina pursuant to an agreement with the U.S. Department of Agriculture. S.C. Code Ann. § 43-5-920 (Supp. 2006) To carry out that function, DHEC “may promulgate and enforce regulations to govern the participation of vendors in the WIC Program including a point system to determine periods of disqualification; to impose other sanctions and civil penalties for violation of this article and regulations issued under it…” S.C. Code Ann. § 43-5-930 (Supp. 2006). Any person violating any of the provisions of Article 7, Title 43, titled “Women, Infants and Children Supplemental Food Program,” or any regulation, agreement or final determination of the department “is subject to disqualification, or a civil penalty not to exceed five thousand dollars each day of the violation, or both.” S.C. Code Ann. § 43-5-960 (Supp. 2006).

3. Mr. Yousef is clearly a WIC Vendor who is bound by the regulations of the WIC Vendor Act. See S.C. Code Ann. § 43-5-910(3) (Supp. 2006) (vendor is defined as “any food store or pharmacy approved for participation in the WIC Program which has a valid Vendor Agreement on file at the WIC Program office.”). A vendor under this program

“must comply with the vendor agreement and Federal and State statutes, regulations, policies, and procedures governing the Program, including any changes made during the agreement period.” 7 C.F.R. 246.12 (h)(3)(xxii) (2006). In that regard, there are very specific criteria a participating vendor must follow when redeeming a WIC voucher. 25A S.C. Code Ann. Regs. § 61-94, Section 301(B) states that a vendor must “[a]ccept food instruments only from individuals who present a valid South Carolina WIC Program ID Card listing them as authorized to redeem the food instruments and receive the supplemental foods.” The vendor must also “[o]btain the signature of the person receiving the supplemental foods and check that signature against the signature on the WIC Program ID Card.” 25A S.C. Code Ann. Regs. § 61-94, Section 301(I). College Corner clearly did not follow those procedures. The compliance buyers were never asked to show a WIC Participant’s ID card during any of the three compliance buys that were conducted. Furthermore, because the buyer’s ID was never checked, the signature on the voucher could not have been compared to the signature on the WIC Program ID Card, as required by Section 301(I). Therefore, College Corner clearly did not properly redeem the vouchers presented.

During the redemption process, the cashier is also required to enter the date and total purchase amount on the voucher, prior to obtaining the signature of the WIC Participant. See 25A S.C. Code Ann. Regs. § 61-94, Section 301(H). Again, College Corner failed to comply with this Regulation. Instead of filling out the voucher and then obtaining the signature, the cashier requested on all three occasions that the buyer sign the voucher prior to entering any information on it.

Additionally, 25A S.C. Code Ann. Regs. § 61-94, Section 301(C) states that the vendor must “[p]rovide the supplemental foods at the current price or less than the current price charged to other customers, as indicated on individual food items or shelf labels indicating the price of the items.” (emphasis added); see also 7 C.F.R. 246.12 (h)(3)(v) (2006) (“The vendor must ensure that the purchase price is entered on food instruments in accordance with the procedures described in the vendor agreement.”) The only qualified WIC purchases during the April 4, 2006 and May 25, 2006 compliance buys were two dozen Nature’s Design eggs. The price of the eggs was not listed on the shelf or the carton on either occasion.[3] Therefore, College Corner was in violation of Section 301(C) on both the April 4 and May 25 visits by not displaying a sticker price or shelf price on the qualified WIC items purchased.

Finally, 25A S.C. Code Ann. Regs. § 61-94, Section 301 requires that “[i]n providing supplemental foods to participants, the Vendor shall: (A) Only provide the supplemental foods as specified on the food instrument and only the types, sizes and quantities specified on the food instrument.” Likewise, 7 C.F.R. 246.12 (h)(3)(ii) sets forth that: “The vendor may provide only the authorized supplemental foods listed on the food instrument. The vendor may not provide unauthorized food items, non-food items, cash, or credit (including rainchecks) in exchange for food instruments.” Here, all but four items purchased during the three compliance buys were not qualified under the WIC Program.[4] Based on the monetary amount the vouchers were redeemed for, it is clear that the WIC Program was charged for supplemental foods that were not in fact received. College Corner charged the WIC Program $42.60 for the April 4, 2006 buy, $50.13 for the May 25, 2006 buy and $49.47 for the May 28, 2006 buy. The items that were not received are as follows:

April 4, 2006- two gallons milk, four 11.5-12 ounce or 46 ounces of approved juice, 36 ounces approved cereal, 1 pound approved cheese

May 25, 2006- two gallons milk, six 11.5-12 ounce or 46 ounces of juice, 36 ounces of approved cereal, one pound of approved cheese, one jar of approved peanut butter.

May 28, 2006- two gallons milk, two dozen eggs, six 11.5-12 ounce or 46 ounces of juice, 36 ounces of approved cereal, one pound of approved cheese, one jar of approved peanut butter.

Mr. Yousef did not dispute that he violated the above Regulations. Rather, he simply argued that his sanction for the violations should be lessened because his cashiers were newly hired at the time of the compliance buys and therefore, not well trained. However, a vendor must specifically inform and train cashiers and other staff on program requirements. See 7 CFR § 246.12(h)(xii); see also 25A S.C. Code Ann. Regs. 61-94 Section 201(B)(9) (Supp. 2006) (setting forth that a participant in the WIC Program must inform and train cashiers and other staff on program requirements). More importantly, pursuant to 7 CFR § 246.12 (h)(3)(xiii) the vendor is accountable inter alia for all violations committed by its managers and employees who violate the WIC regulations. See also 25A S.C. Code Ann. Regs. 61-94 Section 201(B)(10) (a WIC Vendor must “[b]e accountable for the actions of employees in the utilization of WIC Food Instruments.”) Therefore, Mr. Yousef is responsible for the actions of his employees, even if they are inexperienced and unable to communicate in English.

4. 7 C.F.R. 246.12 (l)(1)(iii) provides for a mandatory three year disqualification if a vendor exhibits “[a] pattern of charging for supplemental food not received by the participant.” See also 25A S.C. Code Ann. Regs. 61-94 Section 901 (4)(14) (“Charging for supplemental food not received by the participant shall result in a three (3) year disqualification.”). Over the course of three compliance buys, the WIC Program was charged each time for food items that were not received by the buyer. Furthermore, 7 C.F.R. 246.12 (l)(1)(iv) provides for a one year disqualification if a vendor shows a pattern of “providing unauthorized food items in exchange for food instruments.” On each occasion, the buyer was allowed to purchase multiple products not listed on the WIC voucher or approved by the WIC Program. Some of the unauthorized food items include cheese product, bacon, “coolie” drinks, quick grits and unauthorized cereals. Moreover, despite Respondents entreaties to the contrary, a “[s]tate agency does not have to provide the vendor with prior warning that violations were occurring before imposing any of the sanctions in paragraph (l) of this section.” 7 C.F.R. 246.12 (l)(3); see also 25A S.C. Code Ann. Regs. 61-94 Section 901 (4)(8). Therefore, in light of the repeated blatant violations of federal and state regulations, I find that a three year disqualification is warranted.

ORDER

IT IS HEREBY ORDERED that College Corner be disqualified from the WIC Program for a period of three (3) years from the date of this Order.

AND IT IS SO ORDERED.

______________________________

Ralph King Anderson, III

Administrative Law Judge

May 21, 2007

Columbia, South Carolina



[1] Pursuant to 7 C.F.R. 246.12 (l)(3) the “State agency does not have to provide the vendor with prior warning that violations were occurring before imposing any of the sanctions in paragraph (l) of this section.”

[2] See S.C. Code Ann. § 43-5-910(2) (Supp. 2006).

[3] During the May 28, 2006 compliance buy no qualified WIC items were purchased.

[4] Two cartons of eggs were purchased during each of the first two compliance buys. The four cartons of eggs were the only qualified purchases made.


~/pdf/060821.pdf
PDF

Brown Bldg.

 

 

 

 

 

Copyright © 2024 South Carolina Administrative Law Court