STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF CUMBERLAND FILE NO.: 10 DOC 3417

______________________________________________________________________________

ANDRIA LAMBERT

,

Petitioner,

v.

NORTH CAROLINA DEPARTMENT OF CORRECTION,

Respondent.

)

)

)

)

)

)

)

)

)

DECISION

______________________________________________________________________________

This contested case was heard before Administrative Law Judge Joe L. Webster on April 13, 2011 at the Office of Administrative Hearings (“OAH”) in Raleigh, North Carolina.

APPEARANCES

Petitioner: Kirk I. Angel

The Angel Law Firm PLLC

Post Office Box 692

Harrisburg, NC 28075

Phone: (704) 455-3311

Fax: (704) 973-7859

Respondent: Terence D. Friedman

Assistant Attorney General North Carolina Department of Justice

Post Office Box 629

Raleigh, North Carolina 27602

Phone: (919) 716-6650

Facsimile: (919) 716-6708

WITNESSES

For Petitioner: Andria Lambert

For Respondent: Kelly Cooper

Doris Martin

Gloria McLamb

Lisa Seffels

EXHIBITS

For Petitioner, Petitioner’s Exhibits (“P. Exs.”) 1 – 7, 9.

For Respondent, Respondent’s Exhibits (“R. Exs.”) (Resp. Ex. 1 Admitted for illustrative purposes only, Tr. 179), 1-A, 1-B, 1-C, 2 – 6.

ISSUE

1. Whether, as of January 2010, Petitioner owed Respondent a debt of $5,576.34, which Respondent was entitled to satisfy in part by seizing $1,273.17 from Petitioner’s 2009 North Carolina state income tax refund pursuant to the Setoff Debt Collection Act (“SODCA”), N.C. Gen. Stat. §§ 105A-1 (2008), et seq.

Based on the pleadings and other materials in the file, sworn testimony of the witnesses, exhibits presented at the hearing and other competent and admissible evidence, the undersigned makes the following:

FINDINGS OF FACT

1. The parties acknowledged proper notice of the date, time and place of the hearing.

2. Petitioner worked for Respondent as a probation parole officer (“PPO”) in Stanly

County, North Carolina.

3. Respondent terminated Petitioner’s employment effective May 29, 2009. Tr. 212,

226.

4. During the investigation leading to Petitioner’s discharge, Respondent’s employee

Lisa Seffels was requested to conduct an audit (“Audit”) of Petitioner’s time worked beginning in March 2008, when Respondent initiated a new computer payroll system named “Beacon.” Tr. 27-28, 30, 75.

5. Ms. Seffels audited Petitioner’s time worked between March 2008 and May 2009

(“Audit Period”), the month Petitioner’s employment was terminated. Tr. 30, 78-79. In doing so, Ms. Seffels reviewed Petitioner’s original timesheets for the Audit Period and compared them to the time that had actually been entered into Beacon. Tr. 29-32.

6. Ultimately, Ms. Seffels identified 15 weeks (“15 Weeks”) during the Audit Period when Petitioner had either received too little credit or too much credit on Beacon for the time Petitioner actually worked. Tr. 30-31. R. Ex. 1-A consists of Petitioner’s original timesheets for the 15 Weeks plus one additional timesheet (R. Ex. 1-A (page 000039)) for a week in which Ms. Seffels did not find an error. Tr. 29, 31, 94-95. R. Ex. 1-B consists of the timesheets for the 15 Weeks but with Ms. Seffels’ Audit notes on them. Tr. 29. R. Ex. 1-C consists of printouts from Beacon demonstrating the time originally entered into Beacon for Petitioner in the 15 Weeks. Tr. 99.

7. After Ms. Seffels identified the time Petitioner had actually worked in the 15 Weeks, Respondent updated Beacon with the correct time. Tr. 125-126. On September 9, 2009, Best Shared Services, which administers Beacon, sent Petitioner a notice that she had been overpaid by $5,067.58. R. Ex. 2 (pages 000004 to 000005); Tr. 187-88. On November 3, 2009, the North Carolina Department of Justice, on behalf of Respondent, sent Petitioner a notice advising her that she had to reimburse Respondent the $5,067.58. R. Ex. 2 (pages 000006 to 000007); Tr. 193. This amount included the federal and state income taxes for Petitioner that Respondent was required by law to remit, and actually remitted, to the Internal Revenue Services and the North Carolina Department of Revenue (“DOR”) based on the resulting overpayments to Petitioner from the incorrect time entered for the 15 Weeks. Tr. 252, 253-255, 257.

8. Pursuant to SODCA, Respondent submitted to the DOR a request to offset any tax refund due Petitioner by the amount she owed Respondent. Tr. 194. On May 16, 2010, the DOR notified Respondent that it had redirected $1,273.17 from Petitioner’s 2009 personal tax refund to Respondent. R. Ex. 2 (page 000011); Tr. 95. On May 20, 2010, Respondent advised Petitioner that it had received the $1,273.17 from the DOR and applied it toward Petitioner’s debt to Respondent. R. Ex. 2 (000012 to 00013); Tr. 195. Respondent offered Petitioner the opportunity to appeal the offset by filing an action in OAH, which Petitioner has done. Tr. 195-196.

9. Respondent’s employee. Kelly Cooper, who works in Respondent’s Controller’s Office (a) reviewed Petitioner’s timesheets for the 15 Weeks; (b) like Ms. Seffels, Ms. Cooper checked Beacon to be certain what time was originally input into Beacon for Petitioner; and (c) Ms. Cooper arrived at the same calculation as Ms. Seffels regarding the incorrect time that was originally entered into Beacon for Petitioner in the 15 Weeks versus the correct time that should have been entered. Tr. 96, 98-99, 110, 112.

10. Ms. Cooper reviewed the overpayment to Petitioner of $5,067.58 that Best Shared Services had calculated. Tr. 97. Ms. Cooper also reviewed all of Petitioner’s pay records from April 2008 forward, checking both Beacon’s records and Petitioner’s electronic pay stubs, and confirmed the amount that Best Shared Services calculated. See Tr. 98-99, 135; see also R. Ex. 4 (Petitioner’s electronic pay stubs from April 2008 forward). In doing so:

a. Ms. Cooper calculated every underpayment or overpayment by

Respondent to Petitioner resulting from the incorrect time entered for Petitioner in the 15 Weeks and netted out the difference between the overpayments and underpayments. See Tr. 101, 103-104; see also, e.g., Tr. 112-113, 125-126, 128.

b. Ms. Cooper took into account whenever an underpayment or overpayment

occurred, even if they occurred over different pay periods in the Audit Period. Tr. 100-102.

c. And, Ms. Cooper confirmed that the overpayments and underpayments

Resulting from the incorrect time entered for the 15 Weeks had been deposited into Petitioner’s checking account. Tr. 101, 103-104.

11. R. Ex. 1, which was admitted for illustrative purposes only, is a summary prepared by Ms. Cooper and Ms. Seffels based on Ms. Seffels’ Audit of Petitioner’s actual time worked in the 15 Weeks and Ms. Cooper’s calculations of the resulting underpayments and overpayments by Respondent to Petitioner. Tr. 27, 103. In particular, R. Ex. 1 summarizes: the incorrect time that was originally entered into Beacon for Petitioner versus the correct time that should have been entered; and the resulting underpayments or overpayments that Petitioner received.

12. The errors in the entry of Petitioner’s time that Ms. Seffels identified and that are illustrated in R. Ex. 1 concern a variety of types of pay. In particular:

a. PPOs who are responsible for monitoring Electronic House Arrest

(“EHA”) must occasionally carry a telephone while outside of the workplace, in case they have to respond to calls about probationers/parolees on EHA. Tr. 32-33. If a PPO has physically been at her workplace for 40 hours in a week, then the PPO can earn “On Call Pay” for any time she is carrying the telephone outside of the workplace in excess of that 40 hours. See, e.g., Tr. 55-56. Respondent’s On Call Pay rate is $2.00 per hour. Tr. 44.

b. A PPO who is carrying a telephone to respond to calls about EHA may

occasionally be called to actually visit the home of the probationer/parolee on EHA. Tr. 33. If a PPO is called to do so and she has physically been at her workplace for 40 hours in a week, then the PPO is deemed to work 1.5 times every hour she works in excess of that 40 hours (“Call Back Pay”). Tr. 33, 52, 55-56, 64, 105. During the Audit Period, Petitioner’s hourly rate of pay was $20.64 and, accordingly, her rate for Call Back Pay was $30.96. Tr. 112, 148; R. Exs. 1, 1-C.

c. If a PPO is physically at her workplace for over 40 hours in a week, she

earns 1.5 times every hour she worked in excess of that 40 hours and is paid accordingly (“Overtime Pay”). Tr. 44, 52, 64, 104-105. During the Audit Period, Petitioner’s Overtime Pay rate was the same as her Call Back pay rate. Tr. 88.

13. R. Ex. 1 refers to On Call Pay and Call Back Pay. In summarizing Petitioner’s incorrect or correct time worked, R. Ex. 1 refers to time that Petitioner was physically at her worksite as “Time Worked” and, wherever Petitioner’s Time Worked is in excess of 40 hours, the excess constitutes Overtime hours that Petitioner worked. Tr. 59. In summarizing the actual overpayments or underpayments to Petitioner based on her incorrect or correct time worked, R. Ex. 1 refers both to Overtime Pay and Call Back Pay as “Comp Time.” Tr. 70, 105-106.

14. As illustrated in R. Ex. 1, there was a great variety of errors in the time that was originally entered into Beacon for the 15 Weeks, resulting in a great variety of underpayments and overpayments by Respondent to Petitioner. For example:

a. For the week of June 8 to June 14, 2008, Petitioner recorded the correct

time she had worked on her original time sheet, including 45 hours for which she should have received only On Call Pay at $2.00 an hour. Tr. 32-33; R. Ex. 1-A. Respondent, however, incorrectly entered her time into Beacon for this week, resulting in Petitioner receiving 45 hours of Overtime Pay at $30.96 an hour. Tr. 34, 103-104, 108; R. Exs. 1, 1-C, 4.

b. In some of the 15 Weeks, Petitioner recorded On Call Pay on her

timesheets when, in fact, she should have recorded Overtime Pay, resulting in underpayments to Petitioner. See Tr. 36-37, 41-42, 44-45, 48, 54; see also Tr. 103, 108; R. Exs. 1-A, 1-C, 4.

c. In other weeks, Petitioner recorded Overtime Pay and received payment

for it when, in fact, she had not been physically at her worksite for over 40 hours so as to be entitled to Overtime Pay. See Tr. 39, 43; see also Tr. 103, 108; R. Exs. 1-A, 1-C, 4.

d. For the week of January 25 through January 31, 2009, among other things,

Petitioner recorded and was paid for eight hours of On Call Pay and 83 hours of Call Back Pay. Tr. 55-56; R. Exs. 1, 1-A, 1-C, 4. Petitioner’s own timesheet for this week, however, demonstrates that Petitioner was actually entitled to only 83 hours of On Call Pay, four hours of Call Back Pay, and four hours of Overtime Pay. Tr. 57-59; R. Ex. 1-A.

e. For the week of March 8 through March 14, 2009, among other things,

Petitioner recorded and was paid for 10 hours of On Call Pay and 63 hours of Call Back Pay. Tr. 62; R. Exs. 1, 1-A, 1-C, 4. Petitioner’s own timesheet for this week 6, however, demonstrates that Petitioner was actually entitled to 63 hours of On Call Pay and no Call Back Pay because she was not physically at her workplace over 40 hours. See Tr. 65-66; see also Tr. 222 (Petitioner conceded she did not work 63 Call Back hours this week); R. Exs. 1, 1-A.

15. The undersigned finds as a fact that the underpayments and overpayments discovered by Ms. Cooper and which are summarized in R. Ex. 1 were all a result of erroneous time entry into Beacon, or “user error,” and not an error committed by the Beacon computer system itself. Tr. 133.

16. In response to cross examination by Petitioner’s counsel and questioning by the Court, Ms. Cooper was able to demonstrate exactly when Petitioner received overpayments summarized in Ex. 1. Tr. 154-158, 160-161, 167, 170. Additionally, as R. Ex. 5, Respondent introduced Ms. Cooper’s detailed notes memorializing her calculations.

17. In January 2010, Respondent added a one-time 10% penalty of $506.76 to the

$5,067.58 by which Petitioner had been overpaid, increasing Petitioner’s liability to Respondent to $5,576.34. Tr. 186-187, 197. R. Ex. 2 summarizes this penalty.

18. After the $1,273.17 setoff Respondent received from the DOR under SODCA, Respondent also received a credit of $179.64 from an insurance payment to Petitioner that Respondent intercepted and credited toward Petitioner’s debt. Tr. 196; R. Ex. 2 (page 000013).

19. Respondent’s counsel stipulated at trial that Respondent does not seek any interest from Petitioner.

20. Petitioner, through her counsel, conceded that she would not present evidence in

support of any claim she might have had that some portion of the SODCA offset was allegedly owing to Petitioner’s husband. Tr. 19.

21. As of January 2010, Petitioner owed Respondent a debt of $5,576.34.

Respondent’s witnesses presented extensive and detailed testimony establishing this debt. R.

Exs. 1 and 2 accurately summarize this debt. Further, R. Exs. 1-A, 1-B, 1-C, 4 and 5 provide

support for and confirm both the testimony of Respondent’s witnesses and the summaries in R.

Exs. 1 and 2.

22. In contrast, although Petitioner was provided with all of the materials necessary to

calculate her correct time in the 15 Weeks and any resulting underpayments or overpayments,

Petitioner did not produce any evidence at trial seriously disputing the calculations in R. Exs. 1

and 2. In particular:

a. In response to questions about Petitioner’s correct time worked during

various of the 15 Weeks, Petitioner testified that she did not know what time had been entered into Beacon, what time should have been entered, or how to calculate the correct time that should have been entered. Tr. 221-224, 241.

b. Petitioner repeatedly conceded that she did not know whether Respondent’s calculations of overpayments and underpayments were correct. Tr. 216-218, 220.

c. Petitioner conceded that: she has never gone back to check whether Respondent’s various overpayments and underpayments were made into her checking account for any months prior to May 2009; and she does not whether or when she got paid by Respondent for the incorrect time Respondent found had been entered for the 15 Weeks. See, e.g., Tr. 213, 216-218.

23. As of the trial date, Petitioner’s debt to Respondent had been reduced to $4,123.53 based on the SODCA setoff and the insurance payment described above.

CONCLUSIONS OF LAW

1. The OAH has personal and subject matter jurisdiction over this contested case per

Chapter § 105A and § 150B of the North Carolina General Statutes.

2. Petitioner timely filed an appeal with the OAH of Respondent’s setoff of Petitioner’s 2009 personal tax refund.

3. N.C. Gen. Stat. § 147-86.21 states: “A State agency to which an account

receivable is owed is responsible for collecting the account receivable.” An “account receivable” is:

An asset of the State reflecting a debt that is owed to the State and has not been received by the State agency servicing the debt. The term includes claims, damages, fees, fines, forfeitures, loans, overpayments, taxes, and tuition as well as penalties, interest, and other costs authorized by law.

N.C. Gen. Stat. § 147-86.20(1). A “debtor” is any “person who owes an account receivable” to the State. N.C. Gen. Stat. § 147-86.20(2) . Further, N.C. Gen. Stat. § 147-86.23 requires that a State agency “shall add to a past-due account receivable a late payment penalty of no more than ten percent (10%) of the account receivable.”

4. N.C. Gen. Stat. §§ 147-86.22(c) and 147-86.25 permit Respondent to use SODCA

as one of its remedies to collect a past-due account receivable due to Respondent. SODCA requires the DOR to cooperate with other State agencies to collect debts to those agencies. N.C. Gen. Stat. § 105A-1. Under SODCA, the “claimant agency” to which the debt is owed may inform the DOR of the debt, and, if the debt is over $50.00, the DOR “must set off the debt” against the debtor’s tax refund. N.C. Gen. Stat. §§ 105A-6(a) and (b).

5. SODCA places the burden of proof on Respondent to establish that Petitioner

owed a debt to it, the amount of the debt, and that Respondent correctly utilized SODCA to obtain a setoff from the DOR. N.C. Gen. Stat. § 105A-8. Respondent has met its burden in this case. In particular, Respondent has established that:

a. As of January 2010, Petitioner owed Respondent a debt of $5,576.34.

This debt constituted a past-due account receivable to Respondent within the meaning of N.C. Gen. Stat. § 147-86.20(1) and 147-86.23.

b. Respondent correctly used SODCA to set off $1,273.17 from a tax refund

due Petitioner for tax year 2009;

c. As of the trial date in this matter, Petitioner’s debt to Respondent had been

reduced to $4,123.53

6. Finally, where debts are created “[u]pon a liability created by statute, either state

or federal,” Respondent has three years to bring an action against a debtor. See N.C. Gen. Stat. § 1-52(2); see also N.C. Gen. Stat. § 1-30 (“The limitations prescribed by law apply to civil actions brought in the name of the State, or for its benefit, in the same manner as to actions by or for the benefit of private parties.”). In this case, Petitioner’s debts to Respondent were “created by statute” – namely, N.C. Gen. Stat. § 147-86.20. Respondent’s setoff of Petitioner’s 2009 tax refund under SODCA was timely under N.C. Gen. Stat. § 1-52(2).

On the basis of the above-noted Findings of Fact and Conclusions of Law, the undersigned makes the following:

DECISION

That, as of January 2010, Petitioner owed Respondent a debt of $5,576.34, which Respondent was entitled to satisfy in part by seizing $1,273.17 from Petitioner’s 2009 North Carolina state income tax refund pursuant to the Setoff Debt Collection Act, N.C. Gen. Stat. §§ 105A-1 (2008)

NOTICE AND ORDER

The agency making the final decision in this contested case is required to give each party an opportunity to file exceptions and to present written arguments regarding this Decision issued by the Undersigned in accordance with N. C. Gen. Stat. § 150B-36.

In accordance with N.C. Gen. Stat. § 150B-36 the agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence, giving due regard to the opportunity of the administrative law judge to evaluate the credibility of witnesses. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency. Every finding of fact not specifically rejected as required by Chapter 150B shall be deemed accepted for purposes of judicial review. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge’s decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency establishing that the new finding of fact is supported by a preponderance of the evidence in the official record.

The agency shall adopt the decision of the Administrative Law Judge unless the agency demonstrates that the decision of the Administrative Law Judge is clearly contrary to the preponderance of the admissible evidence in the official record. The agency that will make the final decision in this case is the North Carolina Department of Corrections.

This the ____ day of August, 2011.

Joe L. Webster

Administrative Law Judge

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download