On November 6, 2007, the Department of Public Health issued a "Notice of Termination of WIC [Women, Infants, and Children] Vendor Agreement and Disqualification from the WIC Program/Right of Appeal" to S and N Enterprise, LLC d/b/a Stop and Go at 4 Bardwell Street, South Hadley, Massachusetts, and its owner and manager, Mohammad Nusrat. In the notice the Department stated that, based on its analysis of three visits to the store by a compliance buyer, it
had found that the store had violated its WIC Vendor Agreement. Counsel for S and N Enterprise and Mr. Nusrat filed a timely appeal a letter dated November 13, 2007.
I held a hearing on September 9, 2008 at the Division of Administrative Law Appeals, 98 North Washington Street, Boston, Massachusetts. Mary Blocksidge, the WIC vendor manager for the Department of Public Health, testified for the Department, as did the undercover compliance buyer. I granted the Department's motion in limine to conceal the identity of the compliance buyer. The compliance buyer testified behind a screen positioned to allow me to see the witness, but not to allow Mr. Nusrat or his counsel to do so. Mr. Nusrat testified for himself and S and N Enterprise. I recorded the hearing on two cassette tapes.
The Department of Public Health asked that 16 documents it submitted be introduced into evidence. It also asked that its Notice of Termination be treated as Pleading A and the appeal be treated as Pleading B.
Counsel for Mr. Nusrat objected to the admission of copies of the WIC checks used by the undercover buyer with check numbers redacted except for the final two digits and the WIC program's calculations of the differences (if any) between the amounts the store should have charged the WIC program and the amount it actually charged. These documents are not self-authenticating. The WIC program introduced no testimony from the compliance buyer authenticating the checks she purportedly used to make purchases at Stop and Go. These six checks are documents numbered 3, 6 and 9. The WIC program also introduced no testimony from its vendor manager to authenticate her calculation sheets. These documents were numbered 4, 7 and 10. Mr. Nusrat, however, conceded that two of the checks were signed by him and the remainder were deposited by him in the bank. Counsel thereafter withdrew his objection to documents 3, 6, and 9. As for the vendor manager's calculations, I treated them as chalks because the calculations were based on data derived from documents in evidence.
FINDINGS OF FACT
Based on the testimony and exhibits admitted at the hearing, I make the following findings of fact:
1. The Massachusetts Department of Public Health/WIC program administers the Special Supplemental Food Program for Women, Infants and Children of the United States Department of Agriculture, Food and Nutrition Services. Ex. 1A. Women eligible to participate in the WIC program use checks provided by the program to pay for specified foods at stores that have entered into a vendor agreement with the WIC program after being selected as vendors. Blocksidge testimony and Ex. 1A.
2. Mohammed Nusrat is the owner of a store called Stop and Go at 4 Bardwell Street in South Hadley, Massachusetts. Nusrat testimony. Stop and Go has been a WIC vendor since at least 2006. Blocksidge and Nusrat testimony. Mr. Nusrat signed vendor agreements for the periods from November 2006 to September 2007 and October 2007 to September 2008. Exs. 1B and 1C.
3. The WIC vendor agreement requires that the store owner or manager participate in training to learn how to handle WIC checks and train all relevant store staff in the correct WIC check handling procedure. Ex. 1A (sections 1 and 2). The agreement also informs vendors that they are accountable for the actions of their employees. Ex. 1A (section 3). Mr. Nusrat received this required training and passed on his knowledge to his three to four employees. Nusrat testimony.
4. The WIC vendor agreement also requires the vendor to (a) provide correct vendor price lists to the WIC program, (b) comply with federal, state, and local law by affixing a price to any items offered for sale to WIC shoppers, (c) never charge the WIC program except for products actually purchased and received, (d) write on the WIC check a price no higher than the actual, current shelf price of an item purchased with a WIC check, (e) fill in the WIC check with the actual price of the items purchased before the WIC shopper signs the WIC check, and (f) observe the WIC shopper sign the check and ensure that the signature matches the authorized signature in the WIC ID folder. Ex. 1A (sections 5, 6, and 9). The WIC program requires vendors to provide price lists annually on a form that seeks the "highest actual shelf prices" of WIC food items; vendors may amend their lists as prices change. See Exs. 12-14.
5. The WIC vendor agreement warns that vendors may be disqualified from participating in the WIC program if they violate the program's requirements. 1A (Sanction Policy).
6. Class II violations include overcharging the WIC program. A pattern of overcharging, which the vendor agreement explains is two or more incidences of a violation, will result in a three year disqualification. Ex. 1A (Sanction Policy and Appendix A).
7. Class IV violations include failure to observe an authorized WIC shopper sign the check and to ensure that the signature matches the authorized signature in the WIC ID folder, failure to affix prices on food items offered for sale, and failure to fill in the WIC check price in the presence of the authorized shopper before the shopper has signed the check. Vendors who commit Class IV violations are assigned sanction points and may be disqualified depending on the cumulative total of sanction points. The accumulation of twenty or more sanction points constitutes sufficient grounds to disqualify a vendor for one year. The examples of Class IV violations just noted are each worth ten sanction points. Ex. 1A (Sanction Policy and
8. The WIC program monitors vendors' compliance with the vendor agreement by hiring an investigative company to send anonymous compliance buyers to stores selected by the WIC program. Compliance buyer and Blocksidge testimony.
9. A compliance buyer visits a selected store on multiple occasions, purchases the items she has been directed to buy with WIC checks, and after doing so prepares a report of each visit that notes the items purchased, whether the item price was listed by the store, whether the store clerk asked for her WIC identification, and whether the clerk filled out the purchase amount on each WIC check before presenting it to the WIC compliance buyer for her signature. Compliance buyer testimony and Exs. 2, 5, and 8.
10. The compliance buyer then submits her reports to the WIC program. The WIC vendor manager, Mary Blocksidge, reviews the reports and prepares calculations for each check used to determine whether the vendor charged the WIC program the correct amount. To prepare these reports, she compares the figure shown on each check with the prices of the items purchased. She determines the price of the items purchased by reviewing the prices shown on the corresponding compliance report, and if no price is shown there, the price list the vendor submitted to the WIC program that year. Blocksidge testimony.
11. On September 12, 2007, the compliance buyer visited Stop and Go. She purchased milk, cereal, and juice with one WIC check and milk, cheese, beans and juice with another WIC check. No price was posted in the store for any of these items except for the cereal and the cheese. Mr. Nusrat was the cashier who waited on her. Although Mr. Nusrat testified that he handles all WIC checks properly, the compliance buyer's report shows that she was not asked for identification, no grocery items were rung up, and she was told to sign the WIC checks without the purchase totals entered. Compliance buyer and Nusrat testimony and Ex. 2.
12. The check totals for the items purchased that day were $28.91 and $15.95. Ex. 3. Mr. Nusrat identified the handwritten entries for the check totals as his own. Nusrat testimony.
13. Blocksidge, working with the prices reported by the compliance buyer, a price list Stop and Go submitted on May 19, 2007, and a price update from September 12, 2007, calculated that the correct totals should have been $16.65 and $13.62. Blocksidge testimony, Exs. 13 and 14, and Chalk 4. Based on these calculations, the store overcharged the WIC program by $12.26 on the first check and by $2.33 on the second check. Chalk 4.
14. The compliance buyer returned to the Variety Store later in September 2007. This visit turned up no violations of WIC program requirements. Blocksidge testimony. A store employee, Mohammed Peeren, was the cashier who waited on the compliance buyer. Compliance buyer and Nusrat testimony. He entered the check totals before he had the compliance buyer sign the checks. Compliance buyer testimony.
15. On October 8, 2007, the compliance buyer returned to the store for a third time. She purchased milk, cereal, and juice with one WIC check and milk, cheese, beans, and juice with a second WIC check. She found prices posted only for the milk and the cheese. Mr. Peeren was the cashier to whom she presented her purchases. Compliance buyer and Nusrat testimony and Ex. 5. The cashier did not check the compliance buyer's identification. Compliance buyer testimony and Ex. 5.
16. The check totals for the items purchased were $16.46 and $14.45. Ex. 6. Blocksidge compared the check totals with the prices as reported by the compliance buyer, the May 19, 2007 price list, and the September 12, 2007 price update. Exs. 13 and 14 and Chalk 7. She determined that the correct price for the items purchased should have been $17.05 and $11.36. Based on these calculations, Stop and Go undercharged the WIC program by $0.59 on the first check and overcharged the program by $3.09 on the second check. Blocksidge testimony and Chalk 7.
17. The compliance buyer returned to Stop an Go for a fourth visit on October 17, 2007. She purchased milk, cereal, and juice with one check and milk, cheeses, beans, and juice with another check. She found a price listed only for the cheese. Compliance buyer testimony and Ex. 8. Mr. Peeren was the cashier. Compliance buyer and Nusrat testimony. He did not check her identification, did not ring up any grocery items, and had here sign the checks before purchase totals were entered. Ex. 8. He did, however, cross out on the first check the preprinted reference to one dozen eggs to show that the buyer had not purchased eggs. Nusrat testimony and Ex. 9.
18. The check totals for the items purchased were $27.02 and $17.05. Blocksidge compared the check totals with the prices reported by the compliance buyer, the May 19, 2007 price list, and the September 12, 2007 price update. Exs. 13 and 14 and Chalk 10. She determined that the correct price for the items purchased should have been $16.05 and $12.76. Based on these calculations, Stop and Go overcharged the WIC program by $10.37 on the first check and $4.29 on the second check. Blocksidge testimony and Chalk 10.
19. On November 6, 2007, the Department of Public Health/WIC program sent Mr. Nusrat a notice of termination of his WIC vendor agreement for S and N Enterprise, LLC d/b/a Stop and Go. It informed him that he and the store would be disqualified from participating as vendors for the following three years because the compliance buys had turned up a pattern of Class II violations involving overcharging the WIC program. The termination notice also recited three types of Class IV violations revealed by the compliance buys: failure to affix prices on goods for sale, failure to observe the authorized WIC shopper sign WIC checks and to ensure her signature matched the authorized signature in the WIC ID folder, and failure to fill out the amount of the purchases in the presence of the authorized WIC shopper before the shopper signed the checks. Pleading A.
20. On November 13, 2007, Mr. Nusrat and S and N Enterprise appealed the termination notice and requested a hearing. Pleading B.
The Department of Public Health met its burden of proving that S and N Enterprise d/b/a Stop and Go and its owner, Mohammad Nusrat, violated the WIC vendor agreement by overcharging the WIC program on five separate WIC checks presented at the store on three separate occasions. This is sufficient to establish a pattern of Class II violations of the vendor agreement, the sanction for which is disqualification from participating in the WIC program for three years.
The evidence establishes that the two WIC checks presented by the compliance buyer at Stop and Go on September 12, 2007 were completed by Mr. Nusrat with amounts that represented overcharges to the WIC program of the items purchased by the compliance buyer, as calculated by Ms. Blocksidge using the pricing information she obtained from the compliance buyer and the price lists Stop and Go had filed with the WIC program. The evidence also establishes that one WIC check presented by the compliance buyer at Stop and Go on October 8, 2007 was completed by a store employee in an amount representing an overcharge and two WIC checks presented to the same employee on October 17, 2007 were completed with amounts representing overcharges to the WIC program.
Counsel for Mr. Nusrat argues that this case boils down to a matter of credibility. He urges that I discount the testimony of the compliance buyer because she was evasive in response to questions about her general truthfulness, she has an incentive to find fault with WIC vendors in order to promote the worth of her job, and she acts alone, which makes the Department of Public Health's case totally dependent on her unverifiable accuracy.
I find the compliance buyer to be credible. General questions about whether she has always told the truth or whether she responded in the same way to this type of question at an earlier hearing concerning a different store are not of much help in discerning whether the testimony she presented about her four visits to Stop and Go was truthful and accurate.
As for bias, it may theoretically be possible that a compliance buyer might be motivated to find fault with a store in order to demonstrate the worth of continued use of compliance buyers to the WIC program, but there is no evidence that this compliance buyer has such a bias or how in fact such bias could have infected her work.
On the central issue of overcharging, the buyer's version of events put the pricing calculations outside her control. Having found few if any prices listed for the items she purchased, it was not her but Mary Blocksidge of the WIC program who ultimately determined what price should have been charged for these goods. And as for the prices that were actually charged, she testified that on the first and fourth visits, the cashier did not fill in the totals before having her sign the checks and on the third visit the cashier filled the check totals in before she signed. In each of these scenarios, control over the price charged by the store was in the hands of store personnel, not the compliance buyer. Mr. Nusrat confirmed this when he admitted that he filled in the totals for the checks presented on the first visit and that he deposited the checks presented on the other visits. Thus, even if the compliance buyer had hoped to find an overcharging violation, she had no perceptible way to allow such bias to influence her actions. Indeed, she could not even have known by the time she left the store whether the store had overcharged.
That no one from the WIC program was in the store supervising the compliance buyer at the time of the purchases hardly makes this case totally dependent on the buyer's version of events. Her version could be double-checked. When she reported that Stop and Go listed certain prices for cereal and cheese on the days she visited, Mr. Nusrat could have checked store records or his own memory to see if those prices were accurate. When the buyer reported that the store failed to list prices for other food items, this should also have been an area that was within the knowledge of Mr. Nusrat or another store employee.
Mr. Nusrat did not provide any testimony to counter the pricing testimony offered by the compliance buyer. All he responded with was his general statement that he followed WIC rules and so did his employees. The evidence supports this only to the limited extent that on one of the visits by the compliance buyer, the store did not overcharge. But on the other three visits, the store overcharged on five checks and undercharged on one check. This hardly demonstrates consistent compliance. To the contrary, the evidence establishes that Stop and Go committed a pattern of overcharging the WIC program, the sanction for which is the disqualification of Mr. Nusrat and S and N Enterprise from participation in the WIC program for three years.
I note that there was little if any testimony concerning the allegations made by the Department of Public Health that Mr. Nusrat and S and N Enterprise committed Class IV violations by failing to affix prices to food items offered for sale, failing to observe the authorized WIC shopper sign each WIC check and to ensure her signature matched the authorized signature in the WIC ID folder, and failing to fill out the amount of the purchases in the presence of the authorized WIC shopper before the shopper signed the checks. I conclude that the Department has proven these violations, except for the allegation that the store cashier failed to enter the purchase total before asking the buyer to sign checks during her visit to the store on October 8, 2007, as the buyer's testimony is that the cashier did enter the totals first. This finding does not affect the disposition here because the sanction for Class IV violations is a one year suspension from the program.
Because the Department of Public Health has established a pattern of overcharging by S and N Enterprise d/b/a Stop and Go, the store and its owner, Mohammad Nusrat, are disqualified from participating in the WIC program for three years.
DIVISION OF ADMINISTRATIVE LAW APPEALS
James P. Rooney
DATED: August 11, 2009