B's NURTURING NEIGHBORHOOD CHILD CARE AND DEVELOPMENT CENTER, INC. v. NEW JERSEY DEPARTMENT OF AGRICULTURE, CHILD AND ADULT CARE FOOD PROGRAM

RECORD IMPOUNDED

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0089-10T3

B's NURTURING NEIGHBORHOOD

CHILD CARE AND DEVELOPMENT

CENTER, INC., LAWRENCE MARTIN,

BEATRICE MARTIN, WILLIAM MARTIN,

PHYLLIS GOODWIN, SHIRLEY CHANCE,

and MARY CLAUD PETTY,

Appellants,

v.

NEW JERSEY DEPARTMENT OF

AGRICULTURE, CHILD AND ADULT

CARE FOOD PROGRAM,

Respondent.

_

July 1, 2011

Submitted June 23, 2011 - Decided

Before Judges Fisher and Grall.

On appeal from the Office of Administrative Law, Agreement No. 09-39-893.

Corey E. Ahart, attorney for appellants.

Paula T. Dow, Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Kristen D. Heinzerling, Deputy Attorney General, on the brief).

PER CURIAM

The United States Department of Agriculture (USDA) sponsors the Child and Adult Care Food Program (CACFP), which assists states through grants and other means "to initiate and maintain nonprofit food service programs for children in institutions providing child care." 42 U.S.C.A. 1766(a)(1). States administering the CACFP, which is entirely federally funded, are charged with ensuring that participating institutions are administratively capable, financially viable, and possess internal controls to ensure program accountability. 42 U.S.C.A. 1766(d). The CACFP is governed by a federal-state agreement, which provides that the state agency charged with administering the CACFP will comply with the program statutes and program regulations.

The New Jersey Department of Agriculture (NJDA) administers the CACFP in this state. Institutions that participate in the program are governed by reimbursement agreements, which regulate the respective responsibilities of the NJDA and the participating institution. Reimbursements are permitted only to those institutions in compliance with the terms of the agreements and related regulations. Upon discovering one or more serious deficiencies, the NJDA provides written notice and an opportunity for the participating institution to take corrective action. 7 C.F.R. 226.6(c)(3)(iii)(A). If corrective action is not taken within the prescribed time, the NJDA is required to seek the participant's termination from the program. A hearing is permitted, 7 C.F.R. 226.6(k), and if terminated, the institution and responsible principals are placed on the National Disqualified List for seven years or until it is determined that the deficiency has been corrected, 7 C.F.R. 226.6(c)(7).

B's Nurturing Neighborhood (BNN) was approved to participate in CACFP for 2009 and 2010. On May 15, 2009, an unannounced review of BNN's operations was conducted by a program specialist, who detected and identified deficiencies in program operations. The specialist reviewed with BNN personnel the findings that had been made and the need for corrective action.

On July 9, 2009, NJDA forwarded a notice of deficiency to BNN and the individual appellants. The notice detailed and memorialized the deficiencies observed at the unannounced review -- specifically, the unavailable eligibility application for March, April, and the first half of May 2009 that had resulted in an overclaim of $4,476.95, and attendance records for the same time period that appeared to have been altered -- and directed that BNN submit, by July 31, 2009, documentation demonstrating the corrective action it would take in response. The notice also advised that if timely corrective action was not taken, NJDA would proceed to seek the termination and disqualification of BNN and the individual appellants. The NJDA encouraged BNN to attend sponsor training.

BNN provided some documentation in a timely fashion and other documentation approximately ten days late. The program specialist visited BNN on September 8, 2009, to review the corrective action taken and its existing operations. Again, eligibility records were not on site, and the available attendance records were unacceptable. NJDA wrote to BNN on October 22, 2009, memorializing the deficiencies and advising that an unannounced review would be conducted in the immediate future.

The unannounced review occurred on November 19, 2009. Missing were the attendance sheets for the month of November, with the exception of the day of the visit. Eligibility applications were also found to be inaccurate or incomplete in a variety of ways.

On December 28, 2009, in light of what was observed during the unannounced review, NJDA gave BNN notice of the deficiencies and notice of its intent to terminate BNN and the individual appellants and seek their inclusion in the national disqualification list. BNN wrote to advise of its desire to appeal the NJDA's findings and the matter was transferred to the Office of Administrative Law for a hearing.

On June 15 and July 13, 2010, Administrative Law Judge Ellen S. Bass heard the testimony of the CACFP coordinator, the program specialist who had visited BNN's operations, and Lawrence Martin, a BNN board member. Judge Bass rendered her final decision on August 6, 2010; therein, she made extensive findings regarding BNN's lack of compliance and deficiencies, which were not fully or adequately remedied, and terminated and disqualified BNN and the individual appellants from the program. The ALJ's decision represents a final agency decision.1

BNN and the disqualified individuals appealed, arguing that their "actions and conduct . . . do not amount to program violations warranting termination" from the CACFP. We find no merit in that argument. Indeed, our review is limited. In such matters, we are required to defer to the agency's "expertise and superior knowledge" in the particular field. Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992). And, absent a clear showing that the decision is arbitrary, capricious, or unreasonable or that the agency's findings are not fairly supported by the record, we have no license to intervene. In re Herrmann, 192 N.J. 19, 27-28 (2007).

Judge Bass's findings are fully supported by the evidence presented, and her application of the regulations governing participation in the CACFP are far from arbitrary, capricious, or unreasonable. We affirm substantially for the reasons set forth in Judge Bass's opinion.

1NJDA argues, and appellants do not dispute, that federal regulations declare that the ALJ's final decision is the final administrative determination in such matters. See 7 C.F.R. 226.6(k)(5)(x).