FOUR OAKS FAMILY AND CHILDREN'S SERVICES and TIM CART, Plaintiffs-Appellees,
IOWA DEPARTMENT OF EDUCATION, BUREAU OF NUTRITION AND HEALTH SERVICES, Defendant-Appellant.
from the Iowa District Court for Linn County, Christopher L.
administrative agency appeals the district court's
decision on judicial review. REVERSED.
J. Miller, Attorney General, and Meghan L. Gavin, Assistant
Attorney General, for appellant.
J. Penner and Steven J. Pace of Shuttleworth & Ingersoll,
P.L.C., Cedar Rapids, for appellees.
by Danilson, C.J., and Vogel and Vaitheswaran, JJ.
Iowa Department of Education and its Bureau of Nutrition and
Health Services (the Department) claim the district court
erred in its judicial review decision reversing the
Department's decision to pursue termination of Four Oaks
Family and Children Services' (Four Oaks) participation
in the Child and Adult Care Food Program (the CACFP) and to
place Four Oaks on the national disqualified list. Because we
agree that federal law allowed the Department to terminate
Four Oaks's participation in the CACFP and place it on
the national disqualified list, we reverse the district
court's judicial-review decision.
Background Facts and Proceedings
Oaks is a nonprofit organization that offers services related
to child welfare and juvenile justice, such as afterschool
childcare and other community-based prevention programs. Four
Oaks participates in the CACFP, which reimburses daycare
providers for meals and snacks given to children and adults.
The CACFP was created by the Federal Agricultural Risk
Protection Act and is administered in Iowa by the Department.
Oaks operates two facilities that participate in the CACFP,
one in Cedar Rapids and one in Iowa City. On August 30, 2012,
the Department conducted an unannounced visit at Four
Oaks's Cedar Rapids facility. The Department employee who
conducted the review noted several issues and discussed them
with Tim Cart, the Four Oaks employee responsible for
managing the program. On September 27, 2012, the Department
initiated an administrative review of Four Oaks's CACFP
records. On October 11, Four Oaks emailed the Department and
voluntarily terminated its participation in the CACFP program
at the Cedar Rapids facility retroactive to August 31.
October 25, the Department issued a citation to Four Oaks,
which cited "serious deficiencies" with Four
Oaks's participation in the CACFP, including: failure to
operate the program in conformance with the performance
standards set forth in paragraph (b)(18)(iii) of the program
accountability section of the agreement; failure to maintain
program operations that met CACFP requirements following
staff turnover; failure to maintain fiscal integrity and
accountability under 7 C.F.R. section 226.15(e) and failure
to process claims accurately; failure to maintain adequate
records; and failure to provide adequate and regular training
or monitor sponsored facilities in accordance with section
226.16(d) of the agreement. The citation directed Four Oaks
to complete corrective actions within one month or risk being
terminated from the program and placed on the national
disqualified list. Four Oaks did not complete the necessary
corrective actions, claiming it was unable to do so because
it was no longer participating in the CACFP. On December 7,
the Department proposed termination of Four Oaks's
ability to participate in the CACFP and disqualification from
future participation by placement on the national
January 29, 2013, Four Oaks filed its appeal of the
Department's decision. Four Oaks argued the
Department's decision was improper because it had already
voluntarily terminated its participation in the CACFP in an
October 11 email, prior to the Department's formal notice
of deficiency on October 25. Following a contested hearing,
an administrative law judge (ALJ), determined:
The evidence presented here amply supports a finding that
Four Oaks was seriously deficient in the management of the
CACFP program and further that Four Oaks failed to attempt to
correct the serious deficient practices with which it was
cited during the site visit on August 31, 2012, and the
administrative review on September 27, 2012.
response to Four Oaks's argument it voluntarily
terminated its participation prior to the ...