Young Minds Christian Preparatory Sch. v. Wis. Dep't of Pub. Instruction, 2014AP889.

• Decision Date: 24 March 2015
• Docket Number: No. 2014AP889.,2014AP889.
• Citation: 363 Wis.2d 655,862 N.W.2d 902 (Table)
• Parties: YOUNG MINDS CHRISTIAN PREPARATORY SCHOOL, Petitioner–Appellant, v. WISCONSIN DEPARTMENT OF PUBLIC INSTRUCTION, Respondent–Respondent.
• Court: Wisconsin Court of Appeals

363 Wis.2d 655

862 N.W.2d 902 (Table)

YOUNG MINDS CHRISTIAN PREPARATORY SCHOOL, Petitioner–Appellant

v.WISCONSIN DEPARTMENT OF PUBLIC INSTRUCTION, Respondent–Respondent.

No. 2014AP889.

Court of Appeals of Wisconsin.

March 24, 2015.

Opinion

¶ 1 KESSLER, J.

Young Minds Christian Preparatory School appeals a circuit court order upholding an administrative decision which directed the school to repay $65,433.54 received by the school under the National School Lunch Program. We affirm.

BACKGROUND

¶ 2 The Young Minds Christian Preparatory School (the School) is a private elementary school in Milwaukee. Most students at the School qualify for free meals under the School Breakfast Program and the National School Lunch Program (NSLP).¹ Both programs are funded by the United States Department of Agriculture (USDA). The State agency which administers the program in Wisconsin is the State Department of Public Instruction (DPI).

The Federal Program.

¶ 3 The USDA provides states with funds to reimburse schools that provide meals to students, provided the schools' meals meet certain nutritional standards and the students served meet eligibility standards.

¶ 4 The federal standards pertaining to student eligibility are known as “Performance Standard 1.” See 7 C.F.R § 210.18(b)(2)(i).² Schools are reimbursed after submitting a “benefit issuance list” to the DPI. That list must identify each student who is eligible for reimbursable meals, the date the child became approved for eligibility, the category of meals for which the student is eligible, and any changes in eligibility made after the initial approval process. See 7 C.F.R. § 210.7(c)(1).

¶ 5 Reimbursable meals must also satisfy nutrition requirements based on meal portion size (which varies based on the age groups of the students) and meal component requirements. The federal standards for breakfast nutrition and portion size are described in 7 C.F.R. § 220.8,³ while 7 C.F.R. § 210.10 describes the federal standards for lunch nutrition and portion size. These requirements are known as “Performance Standard 2.” Essentially, the minimum portion size for each nutritional category varies with the age group into which each child falls. The size of the minimum nutritional content and size of the portion is identified in the federal regulations by specific volume (e.g., 1 cup of milk) or by weight (e.g., 4 ounces of meat). See 7 C.F.R. § 210.10(a) -(n).

¶ 6 The federal regulations also require participating schools to maintain records specifying the components of each meal served during each school week. See 7 C.F.R. § 220.8(a)(3) (breakfast recording requirements); 7 C.F.R. § 210.10(a)(3) (lunch recording requirements). Upon a school's entry into the breakfast and lunch programs, the USDA provides each school with a manual titled “USDA Menu Planner for Healthy School Meals,” which specifies the information schools must provide in their production records. This information includes food components, recipes, serving sizes, portions, the actual amount of food prepared, the number of reimbursable and non-reimbursable meals served, substitutions and leftovers.

¶ 7 States are required to ensure that participating schools comply with the federal requirements and must take fiscal action to recover funds that were not properly payable.⁴ See 7 C.F.R. § 210.19(c). Failure to enforce compliance requires the state to return funds to the USDA.⁵ See 7 C.F.R. § 210.19(c)(3).

¶ 8 States must conduct periodic administrative reviews of participating schools and their records to ensure compliance. See 7 C.F.R. § 210.18(b)(1)-(2), (c). If a state's review reveals violations of either Performance Standard 1 or Performance Standard 2, the state is required to take corrective action to ensure that the school corrects its violations. See 7 C.F.R. § 210.18(k). The state is required to “take fiscal action against [the school] for Claims for Reimbursement that are not properly payable [under 7 C.F.R. Part 210].” See 7 C.F.R. § 210.19(c) (emphasis added). If a school violates either the eligibility standards or the nutritional standards, and has not taken corrective action within the federally prescribed compliance deadline, the state may place the school on “withholding status.” That status allows the state agency to withhold payments to the school until the school completes its corrective action. See 7 C.F.R. §§ 210.18(l)(1)-(2) ; 210.24.

The DPI Visits the School.

¶ 9 As a result of parent complaints, representatives from the DPI made an unannounced visit to the School in late March 2011. During the visit, the DPI representatives noted multiple areas of concern. The DPI particularly noticed a missing required meal component (grain) and a lack of proper equipment to adequately measure food portions. The DPI placed the School on a claims withholding status and scheduled another on-site evaluation for early April 2011.

¶ 10 Following the April evaluation, DPI representatives presented their findings to the School principal, Tracy Laster, and the administrative assistant responsible for handling “point of service” responsibilities during breakfast and lunch, Maneisha Gaston. The DPI sent the School a lengthy written report identifying deficiencies as to Performance Standard 2 and the corrective actions required to meet federal regulations. Specifically, the DPI indicated that the School:

• Failed to keep proper menu records for the review period to show that portion sizes met the daily minimum amounts as required by the menu planning approach specified in the contract between the School and the DPI;

• Failed to provide proper menu records for the review period to show that the weekly requirements for grain/bread, meat/meat alternative, and fruit/vegetable were met;

• Kept separate rosters for the traditional breakfast served in the cafeteria and the breakfast transported to the classrooms, allowing students to consume two breakfasts, both of which the School claimed reimbursement for;

• Made an improper substitution in the breakfast menu by substituting a bread/grain component for the required meat/meat alternative component;

• Had no Child Nutrition labels on file for purchased processed items; and

• Had no standardized recipes for menu items containing more than one ingredient.

The School was required to comply with the corrective actions by June 24, 2011.

¶ 11 For the next two months, the DPI, Laster, and the owners of Food For Thought, the company that provided the School's meals, communicated electronically about the deficiencies. Food for Thought provided food production documentation to the DPI, while Laster emailed the DPI a corrective action plan. The DPI informed both that their documentation was incomplete and did not satisfy the federal reporting requirements. The School continued to communicate with the DPI regarding its missing documentation; however, the DPI continued to indicate that the School's production records were incomplete under the federal reporting requirements.

¶ 12 In mid July 2011, the DPI took fiscal action against the School. The DPI acknowledged that the School made improvements on several of its violations, but concluded the School was still in violation of multiple Performance Standard 2 (nutrition) requirements. The DPI concluded that the School still:

• Showed a practice of double-counting breakfasts;

• Had incomplete production records;

• Claimed meals for students who did not receive meals; and

• Had missing meal components for both breakfast and lunch.

The DPI determined that the School received $8,177.12 for the August 2010–June 2011 school year which was not reimbursable. The DPI continued to ask the School for proper production records for that school year. The DPI also told the School it would remain in a withholding status until it submitted accurate claims and complete production records for three consecutive months.

¶ 13 Ultimately, after receiving additional breakfast and lunch production records from the School, the DPI determined that the School's reporting practices and the meals served continued to violate the federal requirements. Essentially, the school's documentation was incomplete and insufficient to support its breakfast and lunch claims from August 2010 through February 2011. Consequently, the DPI calculated that the School owed a repayment of $65,433.54 for meals that were improperly documented, but for which the School was reimbursed. The DPI also told the School that it would remain in withholding status until the repayment was paid in full and until the School complied with federal reporting requirements for three consecutive months.

¶ 14 The School appealed the DPI's determination to the Division of Hearings and Appeals. An Administrative Law Judge (ALJ) upheld the DPI's determination.

Appeals to the Circuit Court.

¶ 15 The School petitioned the circuit court for judicial review of the ALJ's decision. On September 4, 2012, the circuit court found that the DPI had not acted within its authority when it conditioned the School's removal from withholding status upon its repayment of $65,433.54. The circuit court ordered the DPI to: (1) review and cross-reference all of the submitted materials covering the August 2010 through February 2011 period, on a meal-by-meal basis; (2) identify each meal it concluded was not reimbursable under the federal program; and (3) explain why the meal was not reimbursable.

¶ 16 The DPI complied with the circuit court's order. In April 2013, the DPI sent the School a spreadsheet which summarized its results, meal-by-meal, component-by-component. The spreadsheet showed that all of the meals for which the School sought reimbursement either were missing food components or contained insufficient measurements to establish that the portion sizes met the federal requirements. The DPI again invited the School to submit additional documentation to support its claims for reimbursement. The School did not do so. The DPI then issued the Decision and Order at issue...