M.O. Matthew v. SCSC (Dept. of Health) ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Marina O. Matthew, :
Petitioner :
:
v. :
:
State Civil Service Commission :
(Department of Health), : No. 1563 C.D. 2016
Respondent : Submitted: May 12, 2017
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: September 6, 2017
Marina O. Matthew (Matthew) petitions this Court for review of the
State Civil Service Commission’s (Commission) August 23, 2016 adjudication and
order (Adjudication) dismissing her appeal challenging the Department of Health
(Department) removing her as its Public Health Program Director. Matthew presents
seven issues for this Court’s review: (1) whether the Department met its burden of
proving that Matthew authorized a vendor to perform work without a contract; (2)
whether the Department met its burden of proving that Matthew’s actions constituted
contract violations; (3) whether the Department established that Matthew was
responsible for procurement; (4) whether the Commission erred by not making
findings relative to SueAnn Caruso’s (Caruso) role in the procurement process; (5)
whether the Commission erred by failing to consider Matthew’s 24-year work
performance record; (6) whether the Department met its burden of proving just cause
for Matthew’s removal from a civil service position for actions taken when she held a
non-civil service position; and (7) whether the Commission’s Adjudication was based
on arbitrary and capricious reasoning.
Matthew was employed by the Department as Acting Director of its
Bureau of Health Statistics and Research (BHSR) from January 19, 2011 until she
was formally promoted to BHSR Director, a non-civil service position, effective July
2, 2011.1 Matthew served as BHSR Director until the Department’s Deputy
Secretary for Administration Anne Baker (Baker) reassigned Matthew to serve as
Director of the Department’s Bureau of Women, Infants and Children (WIC),
effective June 21, 2014, for reasons unrelated to the instant removal action.2
Matthew’s job as WIC Director was a civil service position.
VitalChek Network, Inc. (VitalChek) is a company from which the
Department acquired Database Application for Vital Events (DAVE) software for
BHSR’s birth and death records. The Department purchased VitalChek software and
its standard maintenance and support under the Commonwealth’s contract with
DELL (formerly ASAP). Subsequent enhancements to DAVE were to be procured
pursuant to an Invitation to Qualify (ITQ3) under which VitalChek was a pre-
qualified vendor. When BHSR needed VitalChek work done, either under the DELL
contract or the ITQ, a work order would be developed describing the work needed,
and the Department’s Bureau of Information Technology (BIT) would issue a
1
The parties stipulated to the procedural background of this action at the December 2, 2014
pre-hearing conference. See Reproduced Record (R.R.) at 10a-11a, Joint Stipulations, 17a.
2
“Baker felt that Matthew was taking BHSR in a different direction from that envisioned by
leadership, and Matthew was unable to embrace that vision.” Department Br. at 8; see also
Matthew Br. at 10. According to the record, Baker reassigned Matthew before she was aware of the
circumstances underlying Matthew’s removal. See Department Br. at 8.
3
ITQ “is a commonly-used term for the invitation for bids or request for proposals that is
used to solicit bids or proposals for the multiple award method of procurement. It is also used to
identify the document that solicits applications or proposals for the qualification of bidders and
offerors.” Certified Record Notes of Testimony (N.T.) Ex. AA-44.
2
purchase order4 against the applicable contract authorizing payment for the requested
work. Matthew approved and signed the work orders as BHSR Director.
In accordance with the Commonwealth’s procurement policies,
regardless of whether the DELL contract (for maintenance and support) or the ITQ
(for enhancements) was implicated, there had to be a contract in effect from which a
purchase order could be issued and under which invoices could be paid.5 The
Commonwealth’s procurement policies prohibit the Department from paying for
work conducted outside a valid contract. BIT ultimately installed BHSR’s DAVE
enhancements. Caruso was the independently-contracted project manager BIT
retained for BHSR’s DAVE enhancement work.
On June 26, 2014, BIT Chief Patrick Keating (Keating) received an
email request from VitalChek for approval to invoice the Department for work orders
totaling $557,252.00, which Matthew approved and signed between August 16, 2013
and February 14, 2014.6 See Reproduced Record (R.R.) at 257a-259a (Certified
Record Notes of Testimony (N.T.) Ex. AA-1), 323a-444a. Because neither
VitalChek nor Keating were able to produce a purchase order authorizing the services
4
A purchase order is a “[w]ritten authorization for a contractor to proceed to furnish a
supply [or] service in accordance with the terms of the bid document or sole source and the awarded
bidder’s bid or a Contract.” N.T. Ex. AA-44.
5
Part I, Chapter 04 of the Commonwealth’s Procurement Handbook specifies that “[n]o
contract shall be implemented, nor shall any materials [or] services . . . be accepted or work begun
on any contract not processed, executed, and approved in accordance with policies and procedures
in [the Commonwealth’s Procurement Code] or this [Procurement H]andbook.” R.R. at 307a (N.T.
Ex. AA-42). Moreover, “any individual giving permission to accept materials [or] services . . . to
begin work before a contract is completely approved, in violation of this policy, may be held
personally responsible.” R.R. at 307a.
6
VitalChek’s invoice approval request covered the following DAVE enhancement work
orders: 1665 (Matthew approved 8/16/13), 1672, 1675, 1676, 5811, 5816, 5897, 6537, 7778, 7779,
8028, 8168, 8534, 9745, 9792, 9817, 9903, 9942, 10009, 10031, 10227, 10623, 10699, 11311,
11412, 11433, 11517, 11645, 11682, 11717, 11718, 11721, 11770, 11924, 11966, 12023, 12057,
12058, 12096, 12204, 12205, 12206, 12229, 12256, 12263, 12266, 12451 (Matthew approved
2/14/14), 12490. See R.R. at 258a-259a, 323a-444a. Work Order No. 12490 was not included in
the record. On the invoice approval list, Work Order No. 12490 is marked “HOLD.” R.R. at 259a.
3
for which Matthew approved the work orders, Keating instructed VitalChek to stop
work. Keating’s investigation further revealed that VitalChek delayed invoicing for
its DAVE enhancements during the 2013-2014 fiscal year at Matthew’s request.
Keating also discovered that Matthew had attempted to pay VitalChek using
Commonwealth purchasing cards. “As a result of VitalChek performing work
without a proper contract, the [Department had to] enter[] into a settlement agreement
to pay invoices for an amount in excess of $800,000.00.” See Matthew Br. App. A
(Commission Adj.) at 12, Finding of Fact (FOF) 43.
At a July 25, 2014 pre-disciplinary conference, the Department’s Labor
Relations Human Resource Analyst Jerry Sheehan (Sheehan) notified Matthew that
she was being suspended from her employment pending an investigation into
allegations of her unsatisfactory work performance and policy violation. See R.R. at
1a. By July 30, 2014 letter, the Department directed Matthew’s employment
suspension effective July 25, 2014. See R.R. at 1a-2a. On August 13, 2014, Matthew
appealed from her suspension to the Commission. See R.R. at 3a-5a. However, by
August 15, 2014 letter, the Department notified Matthew:
This is to advise you that you are being removed from your
position of Public Health Program Director, Regular Civil
Service status, in the Bureau of WIC effective August 18,
2014.
You are removed from employment due to Unsatisfactory
Work Performance and Violation of Policy. Specifically,
you failed to adequately manage the procurement activity of
the [BHSR] during your term as Bureau Director, and you
violated procurement policy when you authorized a vendor
to perform work without a contract in place.
A pre-disciplinary conference was held with you on July 25,
2014, and the response you provided was not acceptable.
R.R. at 6a.
4
On August 27, 2014, Matthew appealed from her discharge to the
Commission. See R.R. at 8a-9a. Pursuant to Section 951(a) of the Civil Service Act
(Act),7 hearings were held on December 5, 2014 and January 28, 2015 to determine
whether the Department had just cause for Matthew’s removal. See R.R. at 12a-491a.
On August 23, 2015, the Commission concluded that the Department established just
cause as required by Section 807 of the Act,8 and dismissed Matthew’s appeal.9 See
Commission Adj. at 24. Matthew appealed to this Court.10
Initially, Section 807 of the Act provides that “[n]o regular employe in
the classified service shall be removed except for just cause.” 71 P.S. § 741.807.
Consequently, “[t]he appointing authority bears the burden of proving just cause and
the substance of the charges underlying the employee’s removal.” Dep’t of Transp. v.
State Civil Serv. Comm’n, 84 A.3d 779, 783 n.1 (Pa. Cmwlth. 2014). Since “[t]he
term ‘just cause’ is not defined in the Act[,]” Woods v. State Civil Serv. Comm’n, 912
A.2d 803, 808 (Pa. 2006),
[t]his Court has explained that ‘just cause for removal is
largely a matter of discretion on the part of the head of the
7
Act of August 5, 1941, P.L. 752, as amended, added by Section 27 of the Act of August
27, 1963, P.L. 1257, 71 P.S. § 741.951(a) .
8
71 P.S. § 741.807.
9
The Commission explained:
Under Section 101.21(6) of the Rules of the [Commission], when a
suspension, pending investigation, results in a final disciplinary
action, the suspension is deemed a part of that final disciplinary
action. 4 Pa. Code § 101.21(6). Appellant was suspended pending
investigation effective July 25, 2014, and subsequently removed
effective August 18, 2014. Accordingly, the Commission will treat
this matter as a removal effective July 25, 2014.
Commission Adj. at 1 n.1.
10
“The Court’s review of a decision of the Commission is limited to determining whether
constitutional rights have been violated, [whether] errors of law have been committed or whether its
findings are supported by substantial evidence.” Walsh v. State Civil Serv. Comm’n (Dep’t of
Transp.), 959 A.2d 485, 488 n.2 (Pa. Cmwlth. 2008).
5
department.’ Perry v. State Civil Serv[.] Comm[’]n (Dep[’]t
of Labor [&] Indus[.], 38 A.3d 942, 951 (Pa. Cmwlth.
2011). However, ‘just cause ‘must be merit-related and the
criteria must touch upon [the employee’s] competency and
ability in some rational and logical manner.’’ Wei v. State
Civil Serv[.] Comm[’]n (Dep[’]t of Health), 961 A.2d 254,
258 (Pa. Cmwlth. 2008) (quoting Galant v. Dep[’]t of
Env[tl.] Res[.], . . . 626 A.2d 496, 498 n.2 ([Pa.] 1993)). . . .
‘Whether the actions of a civil service employee constitute
just cause for removal is a question of law fully reviewable
by this Court.’ Perry, 38 A.3d at 951.
Szablowski v. State Civil Serv. Comm’n (Pa. Liquor Control Bd.), 111 A.3d 256, 261
(Pa. Cmwlth. 2015).
In the instant case, Matthew argues that the Department did not prove
just cause for her removal, particularly because it failed to establish that she
authorized VitalChek work without a contract, where it is undisputed and the
Commission found that there were two contracts in place.11 Essentially, Matthew
argues that the Commission’s findings were not supported by substantial evidence.
We disagree.
11
Relative to Matthew’s issue that the DELL contract and ITQ were not made part of the
record, since Matthew appears to have raised that objection for the first time on appeal to this Court,
it is waived. Martin v. State Civil Serv. Comm’n (Dep’t of Cmty. & Econ. Dev.), 741 A.2d 226, 230
(Pa. Cmwlth. 1999) (“[N]o question shall be heard or considered by the [C]ourt which has not been
raised before the government unit. Pa.R.A.P. 1551.”). Notwithstanding, since the work order
approvals that led to Matthew’s removal were not based upon either the DELL contract or the ITQ,
their absence from the record does not render the Commission’s decision erroneous. Moreover,
despite being afforded the opportunity to do so, Matthew did not challenge Department witness
testimony relative to what the contracts covered and how purchases were to be made thereunder.
Matthew’s claim that the Commonwealth’s procurement policy is missing from the record,
which was made for the first time in her brief to this Court, see Matthew Br. at 1, is likewise
waived. However, even if that issue was not waived, the Department included in the record
excerpts from the Commonwealth’s Procurement Handbook (see R.R. at 307a-320a (N.T. Ex. AA-
42), N.T. Ex. 43), IT Bulletins (see N.T. Exs. AA-7, AA-45), Management Directive (see N.T. Ex.
AA-43), and the Department’s Contract Bulletins (see N.T. Ex. AA-44). Further, despite being
afforded the opportunity to do so, Matthew did not challenge Department witness testimony
regarding the Commonwealth’s IT procurement policies, practices and procedures.
6
Although there were contracts under which VitalChek software was
purchased and maintained, and VitalChek was a DELL and ITQ pre-approved
vendor, the record evidence makes clear that the DELL contract and the ITQ did not
cover the procurements Matthew authorized herein. At the Commission hearings,
BIT’s Division of Enterprise Services Director Robert Chilcote (Chilcote) testified
that VitalChek software and its standard maintenance and support were purchased
under the DELL contract. See R.R. at 18a-20a, 29a. He explained that statements of
work issued under the DELL contract defined the services DELL would provide,
which included annual maintenance for defect or problem resolution and operational
support. See R.R. at 19a. Chilcote articulated:
A. Under the DELL contract, it was an annual maintenance
contract. So every year, we would do an annual purchase
order . . . . [T]here was always a purchase order in place to
cover the work. And the vendor would invoice for the work
against that purchase order that was covered by the DELL
contract.
Q. So under the DELL contract with the statement of work,
a purchase order would be issued. What does the purchase
order do for VitalChek?
A. It’s the authorizing document that authorizes the vendor
to --- that they can perform the work.
Q. And then, I believe you testified then there would be the
invoice?
A. The invoice is issued. For deliverable type services, it’s
issued after the vendor completes the service. For annual
maintenance type work, like we have the DELL contract,
it’s typically for any vendor made up front at the beginning
period as soon as the [purchase order is] issued. So that’s
your invoice. The Commonwealth would pay the invoice.
Q. Okay. Did the ITQ contract work differently than the
DELL software contract?
A. Yes.
7
Q. And can you explain for the Commission what the
differences are?
A. Typically, the DELL contract covered just the standard
maintenance and support . . . . [Under t]he ITQ contract, . .
. VitalChek was qualified [to] . . . do service engagements
that cover enhancements that you couldn’t do for the DELL
contract or other service work within limits. You know, the
up to $50,000 on a purchase order or two purchase orders
for a maximum of $100,000 per year. So it provided for the
enhancement capability and other services like dating the
births, that we didn’t have through the DELL contract.
R.R. at 19a-20a; see also R.R. at 30a, 33a, 36a. Chilcote described:
[T]he DELL contract [was for] standard maintenance and
support. Any enhancements in the software provided would
be provided by the [ITQ] vendor as [its] own line of
business, upgrading [its] system for all the customers. In
the ITQ contract, the enhancements we’re talking about
[are] enhancements that are specific for Pennsylvania to
make it operational and provide updates for what
Pennsylvania needed to have added into the system.
R.R. at 20a; see also R.R. at 30a, 33a, 36a.
Chilcote expounded:
The ITQ’s a preexisting contract that’s already been
[through] a preapproval process, [and the vendor is]
prequalified. But . . . a purchase order, . . . has to get
issued. It goes through an approval process to approve the
purchase order. So there is a Commonwealth approval
process authorizing the vendor. . . . There has to be [a]
document to authorize the vendor to do the work.
R.R. at 26a. Chilcote declared that BIT issued all of the Department’s IT purchase
orders. See R.R. at 31a. He testified that it was a longstanding practice, even before
Matthew became Acting Director, for BHSR to work directly with VitalChek for its
needs and, “if work was requested of [BIT] to get issued on a purchase order, [BIT]
proceeded to do that. But otherwise, [BIT] had no involvement in deciding the work
8
orders or what was to be on a work order. It was part of [BHSR’s] business.” R.R. at
22a; see also R.R. at 24a, 28a, 40a, N.T. Ex. AA-11.
According to Chilcote, he notified the Department, including Matthew,
as early as 2009 when the Department purchased DAVE’s death module that
enhancements thereto would not be covered by the DELL contract. See R.R. at 20a,
27a-28a; see also N.T. Ex. AA-9. He further recalled that there had come a time
when BHSR required Pennsylvania-specific enhancements (i.e., DAVE data
conversion) that could not be made under the VitalChek’s ITQ limitations. See R.R.
at 20a-21a, 28a. Chilcote specifically notified Matthew of the ITQ’s limitations by
June 13, 2012 email, and further reminded Matthew that “[n]othing can be paid
outside the [purchase order,]” and that, where applicable, the ITQ contract number
must be referenced. N.T. Ex. AA-11; see also R.R. at 21a. Chilcote reminded
Matthew and others by February 28, 2013 email regarding the Commonwealth’s IT
procurement review process. See R.R. at 24a-25a; see also N.T. Ex. AA-7. He
recalled that BIT employees and independent contractors, including Caruso, met
weekly with VitalChek regarding VitalChek’s work, and that Department staff
(including Matthew and BHSR) and BIT held twice-monthly meetings about the
DAVE project. See R.R. at 39a.
Chilcote recalled that the Department decided to enter into a stand-alone,
sole source contract with VitalChek that would cover services not provided under the
DELL or ITQ contracts, plus maintenance, support and enhancements under a
specifically-defined statement of work (Proposed Contract). See R.R. at 22a-23a.
Chilcote explained that, some time in 2012, Department representatives, including
Matthew, met and attempted to develop a statement of work for the Proposed
Contract.12 See R.R. at 23a-24a. He recounted that, although the DELL maintenance
12
A statement of work “defines the services to be provided, the requirements to be met, and
any service level agreements that are required[.]” R.R. at 19a. Service level agreements set forth
9
and support agreement had been extended several times through and beyond
December 31, 2013, see R.R. at 33a, 38a, 54a, the Proposed Contract was not yet in
place when Matthew issued the subject work orders.
Chilcote described, per Keating’s direction, “looking to see if any
purchase orders had been issued to cover the [VitalChek] work [Matthew requested].
And there weren’t.” R.R. at 27a. He further maintained that he looked for but did
not find a contract that covered the subject work orders. See R.R. at 29a. He
expressed that BIT Enterprise Development Services Director Karen Ford (Ford)
emailed Matthew on July 7, 2014, informing Matthew that “none of those work
orders [for which VitalChek intended to bill] were listed on the [two] ITQs that were
done in the fall,” and Ford “[could] find no record of any [purchase orders] for this
work for [VitalChek] to bill against.” N.T. Ex. AA-6; see also R.R. at 30a. Notably,
Matthew admitted to Ford that no contract covered the work orders she issued:
Per discussions in meetings going all the way back to last
July [2013,] [V]ital[C]hek was supposed to have a contract
on [sic] place. First [BIT] told them July the[n] October
then January the[n] March then June. So seeing as how
releases take awhile[,] everyone figured the contract would
be in place before the releases. . . . I guess they are now
tired of waiting for a contract and are invoicing for
work completed.
R.R. at 269a (N.T. AA-6) (emphasis added); see also R.R. at 30a.
Keating testified at the hearings that since the Commonwealth’s
procurement policy requires there to be a contract in place for any procurement,
“[y]ou can’t engage services unless you have a contract.” R.R. at 47a. He specified
that, “[o]nce you have a contract in place with the vendor, then you issue a . . .
criteria the Commonwealth uses to hold a vendor to specific performance levels (i.e., system must
be operational 99% of the time). See R.R. at 22a. The Proposed Contract’s statement of work was
ultimately drafted by Commonwealth contractor Deloitte in November 2013, but the Department
continued to refine it through at least the end of December 2013. See R.R. at 23a-24a.
10
purchase order[] against that contract, identifying the services that you want to be
accomplished.” R.R. at 44a. Keating confirmed that VitalChek software
maintenance and support for BHSR was obtained by purchase orders issued under the
DELL contract,13 but that additional software enhancements had to be obtained by
purchase orders issued against the ITQ. See R.R. at 44a-46a, 49a.
After receiving VitalChek’s June 26, 2014 email, Keating instructed
Chilcote and Caruso’s replacement project manager Charu Pahwa (Pahwa)14 to find
any active purchase orders that would support the VitalChek work orders. Keating
reported that Chilcote, Pahwa and VitalChek ultimately substantiated that there were
no specific contracts or purchase orders authorizing the services VitalChek provided
under the subject work orders. See R.R. at 47a. Keating further recalled VitalChek
Vice President Greg Sirko (Sirko) confirming that there was not an existing
Commonwealth contract covering the work orders, but rather Matthew had asked
VitalChek to proceed with the work, and then invoice the Commonwealth after the
Proposed Contract’s statement of work was completed. See R.R. at 47a, 50a; see also
N.T. 264a-266a (N.T. Ex. AA-3).
Pahwa explained her understanding that quality issues with VitalChek’s
2011, 2012 and 2013 releases necessitated the repeated additional releases and, as a
result, calendar time passed, and the 2013 releases were still being issued into the
2013-2014 fiscal year. See R.R. at 71a. She testified that, during her investigation of
13
Keating described that VitalChek sends invoices for DELL contract-related work to
DELL for payment, DELL invoices the Commonweath, the Commonwealth pays DELL, and the
transaction is recorded in the Commonwealth’s SAP procurement/financial tracking system. See
R.R. at 46a.
14
Pahwa was hired to replace Caruso as BIT’s interim VitalChek project manager when
Caruso’s contract expired on June 30, 2014. See R.R. at 31a, 43a, 136a-139a. Pahwa began on
June 23, 2014 to serve as project manager until BIT could hire Caruso’s replacement. See R.R. at
43a, 60a. Pahwa and Caruso conducted a knowledge transfer for six days before Caruso’s
departure. See R.R. at 60a, 66a. Pahwa was the Department’s VitalChek project manager until she
was re-assigned on October 1, 2014. See R.R. at 66a.
11
this matter, she located all but one of the work orders for which VitalChek sought
payment, but since she was not familiar with the project, she could not state whether
the work orders had been satisfied and the work accepted.15 See R.R. at 63a.
However, Pahwa learned that BIT was not involved in any way with the writing,
reviewing or invoicing of the work orders at issue in this case. See R.R. at 64a.
Pahwa also found in BHSR’s network a document entitled “Work Order Process
Tracking,” wherein BHSR’s VitalChek work order payment process was outlined.
See R.R. at 63a-64a, 69a; see also R.R. at 267a-268a (N.T. Ex. AA-4). According to
the “Work Order Process Tracking” instructions:16
1. Work orders are requested by the Program [project
manager, Caruso] and can only be signed off on by
[Matthew].
2. The Program [project manager, Caruso] is only
facilitating the movement of the work order through the
review life cycle including final approval and tracking them
on the summary sheet. The Program [project manager,
Caruso] is not involved in the payment process unless
requested by [Matthew].
3. How the work order[s are] paid and/or the vehicle
which is used to pay them is the responsibility of
[Matthew], [BHSR’s Vital Records Director] Debra
Romberger [(Romberger)] and [Chief of BHSR’s
Administrative and Fiscal Services Division] Cathy Sabol
[(Sabol)].
15
The missing work order was not signed because there was confusion surrounding its
drafting, and a new work order was going to be created. See R.R. at 65a.
16
Despite Matthew’s claim that she never saw the Work Order Process Tracking Document
prior to her July 25, 2014 pre-disciplinary conference, and that she did not know who created it, she
nevertheless agreed that its contents were accurate – particularly that she signed every VitalChek
work order, and that Caruso could not make DAVE enhancement funding decisions. See R.R. at
192a-193a. Matthew confirmed that Caruso could not access funding or the budget and, if she
needed funding figures, she had to obtain them from Matthew, BHSR’s Vital Records Director
Debra Romberger or Chief of BHSR’s Administrative and Fiscal Services Division Cathy Sabol.
See R.R. at 192a-193a.
12
R.R. at 268a (emphasis added); see also R.R. at 67a. The document further specified
that the password for BHSR’s DAVE work order files “must be authorized and
given from [Matthew], [Romberger], or [BHSR’s Statistical Registries Director]
Diane Kir[sc]h [(Kirsch)].”17 R.R. at 268a (emphasis added).
Sheehan investigated the subject events, interviewed staff, and reviewed
supporting documents and the Commonwealth procurement policy before
recommending Matthew’s removal. Sheehan verified that the work orders for which
VitalChek sought payment were for DAVE enhancements not covered by the DELL
contract, and that there were no purchase orders issued under the ITQ before
VitalChek did the work specified therein. See R.R. at 172a, 177a. He further
discovered that the ITQ’s annual two $50,000.00 purchase order limit had already
been met for fiscal year 2013-2014,18 and that the subject work was not included
under those purchase orders.19 See R.R. at 149a-151a, 174a; see also R.R. at 321a-
444a (N.T. Ex AA-49); N.T. Exs. AA-46, AA-47, AA-48. Sheehan also explained
that although BIT installed the enhancements pursuant to the work orders, BIT did
not review or process payments for them. See R.R. at 146a, 166a, 175a-176a.
Sheehan articulated that his review of VitalChek and BHSR emails made
clear that Matthew was aware that there was no contract to support the work she
approved in the subject work orders. In a June 11, 2014 email, Caruso notified
VitalChek employees Karen Gary (Gary) and Stephen Berryman (Berryman) that, at
Matthew’s request, they were to submit forms for VitalChek to be paid by
17
Matthew supervised both Romberger and Kirsch. See R.R. at 131a-132a. Baker also
recommended discipline for Romberger and Kirsch as a result of errors that led to Matthew’s
removal. See R.R. at 132a, 142a-143a.
18
The new fiscal year 2014-2015 began July 1, 2014. See R.R. at 174a.
19
Sheehan discovered that VitalChek completed the work referenced in those purchase
orders before the purchase orders were issued. See R.R. at 149a-152a, 174a; see also N.T. Exs.
AA-20, AA-46, AA-47 and AA-48.
The work order numbers referenced in the purchase orders did not include those VitalChek
listed in its June 26, 2014 invoice approval request.
13
Commonwealth purchase card. See R.R. at 177a, 302a-303a (N.T. Ex. AA-34).
Berryman responded that the Commonwealth “will need PA to submit a [purchase
order] for the Work Orders that will be paid for.” R.R. at 302a. Caruso informed
Matthew:
It looks like we can’t do this without a [purchase order]
being created.
Based on my past experience, if a [purchase order] needs to
be generated, then I have to go through BIT/[Chilcote] to
make that happen?
Maybe you know of another way, I don’t know? In the
meantime, I have reached out to [Sabol] to see if she knows
how we can get this done independently of BIT. . . .
R.R. at 302a. Matthew responded: “We can only do two [purchase orders] a
year and we have reache[d] our max.” R.R. at 302a (emphasis added). Caruso
stated: “I know and I’m working on your [two] fifty’s [sic] for 2014 now, and those
we know will have to go through BIT, so that would end up using your two for the
year . . . unless we can find a way to pay on the credit card.” R.R. at 302a. On June
12, 2014, Berryman emailed Caruso two invoice acceptance forms splitting a portion
of VitalChek’s balance so that it could be paid “within Pennsylvania’s [c]redit [c]ard
limitations.” R.R. at 306a (N.T. Ex. AA-37). Sheehan clarified for the Commission
that Commonwealth procurement policies prohibit splitting invoices in order to
bypass the procurement process. See R.R. at 156a.
According to a June 17, 2014 email chain Sheehan discovered,
Romberger requested that Sabol provide Commonwealth purchasing card details
because “[Matthew] would like to pay [a few VitalChek work] orders by credit card,”
and Sabol informed Romberger: “We currently have $26.00 as a remaining balance
on the . . . [p]urchasing card line item. Can this expenditure wait until the next [fiscal
year]?” N.T. Ex. AA-40; see also R.R. at 159a. Romberger notified Matthew that
14
the purchasing card was not a payment option, and asked “where would you like to
go from here?” N.T. Ex. AA-40. By June 27, 2014 email, Caruso verified to Kirsch,
Pahwa and Romberger that “all of [the invoices in VitalCheks’ June 26, 2014
approval form] can be paid” because the requested work had been completed.20 R.R.
at 160a; see also R.R. at 159a; N.T. Ex. AA-41. Sheehan substantiated that since
Caruso was an outside, third-party contractor and not a Commonwealth employee,
she “ha[d] no authority at all whatsoever to release a payment.” R.R. at 160a.
Finally, in an August 1, 2014 email, Sheehan observed that Sirko
summarized for Keating:
The work orders in question were requested by [Matthew]
and her staff (usually through [Caruso]). We developed the
requirements, got them approved by the [BHSR] staff, and
delivered them. After testing, they were in turn signed off
on by [Matthew]. We were asked to invoice PA after the
new [statement of work] went into effect, because it
would include a mechanism to get us easily paid. This was
not initially troublesome to us, since we believed the
[statement of work] would be completed in July of 2013.
However, as you know, the date of the [statement of
work] continued to slip. Earlier this year, we made a
decision internally to send the request to invoice if it
didn’t appear the [statement of work] would be in effect
by July. After [Matthew] left, we decided to prepare and
submit the request. [Gary] believes that [Berryman]
reached out to [Caruso], advised her what we were going to
do, and provided her with a copy so she could check her
records to make sure it corresponded accurately with PA’s
records. We then formally submitted the request.
R.R. at 265a (N.T. Ex AA-3) (emphasis added). When Keating inquired “who
specifically asked VitalChek to wait for the new [statement of work] to go into effect
before sending the invoices[,]” Sirko responded: “It was [Matthew] who asked us to
20
Contrary to Matthew’s representation that “Caruso directed that the VitalChek invoices be
paid” (Matthew Br. at 24), Caruso did not authorize payment, but rather justified that since the
requested work had been completed, payment was due VitalChek.
15
do that.” R.R. at 264a (emphasis added). Based upon his investigation, Sheehan
recommended Matthew’s removal for unsatisfactory work performance and policy
violation and, with Baker’s approval, conducted Matthew’s pre-disciplinary
conference. See R.R. at 161a.
This Court has explained:
In civil service cases, the Commission is the sole fact-
finder. As such, determinations as to witness credibility
and resolution of evidentiary conflicts are within the
Commission’s sole province, and we will not reweigh the
evidence or substitute our judgment even though we might
have reached a different factual conclusion. When
reviewing a Commission decision, we view the evidence,
and all reasonable inferences arising from the evidence, in a
light most favorable to the prevailing party.
Perry, 38 A.3d at 948 (citations omitted). Accordingly, “[t]his Court . . . must accept
[the Commission’s] findings, if they are supported by substantial evidence.
Substantial evidence needed to support a finding of the Commission is relevant
evidence that a reasonable mind might accept as adequate to support the conclusion
reached.” Daily v. State Civil Serv. Comm’n (Northampton Cnty. Area Agency on
Aging), 30 A.3d 1235, 1239-40 (Pa. Cmwlth. 2011) (quoting Naso v. State Civil Serv.
Comm’n (Dep’t of Corr.), 696 A.2d 923, 926 (Pa. Cmwlth. 1997) (citation omitted)).
Here, the Commission concluded:
Upon review of the record, the Commission finds that the
[Department] has presented sufficient evidence to support
the charges. We find Chilcote credible that BIT was
involved in installation of the products, but not responsible
for the procurement. We find Baker credible that
[Matthew] had ample opportunities to inform her of any
concerns about VitalChek’s work and failed to take
advantage of any of those times. We find Keating, Pahwa,
and Sheehan credible that they obtained documents
showing [Matthew’s] procurement of services without a
contract, that [Matthew] made an attempt to pay VitalChek
work orders via Commonwealth credit cards, and that
16
[Matthew] tried to make payments without following the
required protocol, and improperly authorized VitalChek to
install software without a contract or any purchase orders
issued. . . . [Matthew] knowingly authorized VitalChek to
complete work when she knew there was neither a contract
nor a purchasing order in place.
Commission Adj. at 22-23 (footnote omitted).
Substantial evidence supported the Commission’s findings and
conclusions that, although there were two methods under which VitalChek may have
qualified for payment – the DELL contract and the ITQ – neither contract covered
the specific VitalChek services Matthew authorized in this case. Matthew was
aware that in order for VitalChek to be paid for the work she authorized in 2013 and
2014, a purchase order had to be issued by BIT pursuant to the ITQ, but the two
$50,000.00 purchase order limit had already been met for the 2013-2014 fiscal year.21
In order to avoid that process, without a purchase order, Matthew instructed
VitalChek to proceed with the work, but to wait until after the Proposed
Contract was executed to bill the Commonwealth. Although it is not evident
whether the Proposed Contract was ever executed with VitalChek, it is clear that the
Proposed Contract was not in effect when Matthew ordered the subject work to
be performed. Accordingly, we hold that the Commission properly determined that
Matthew authorized VitalChek to conduct work without a contract in violation of the
Commonwealth’s procurement policy.
Matthew further asserts that the Department failed to meet its burden of
proving that Matthew was responsible for managing the VitalChek procurement
while she was BHSR Director. Matthew specifically declares that the Commission
21
Even assuming, arguendo, that Matthew had not ascertained that knowledge from the
Commonwealth Procurement Code, 62 Pa.C.S. §§ 101-4604, the Commonwealth’s Procurement
Handbook, or her meetings with BIT and VitalChek, she was reminded of that requirement by
Chilcote in June 2012 (N.T. AA-1) and February 2013 (N.T. Ex. AA-7), and by Caruso in June
2014 (see R.R. at 302a).
17
failed to make necessary findings of fact concerning Caruso’s pivotal procurement
role in the VitalChek initiative. We disagree.
We acknowledge that the Commission did not make specific findings
relative to Caruso’s role in the VitalChek procurement process. Nevertheless, it is
undisputed that Caruso was under contract with BIT to be the VitalChek project
manager, and that Caruso worked with Matthew on the operation side of the DAVE
enhancement process (i.e., translating and coordinating BHSR’s needs with
VitalChek’s functionality, etc.) during the events that led to Matthew’s removal. See
R.R. at 31a, 127a-130a. That the Commission made no such findings does not render
the Commission’s Adjudication “fatally flawed,” Matthew Br. at 25, nor change the
fact that Matthew was ultimately responsible for approving the procurement of the
DAVE enhancements while she was BHSR Director.
Despite Matthew’s contention that she relied on Caruso to manage the
VitalChek project, and that Matthew merely signed work orders as directed by
Caruso, see Matthew Br. at 20-24, it is clear from the record that Matthew was well-
informed about BHSR’s technology needs, VitalChek, and the DAVE enhancements.
She admitted that she participated with BHSR and Caruso in weekly meetings with
VitalChek regarding the system and DAVE enhancements, and attended biweekly
meetings with BIT to discuss VitalChek operations, necessary changes, DAVE
enhancements, problems and work orders. See R.R. at 187a-188a, 192a. Matthew
also confirmed that when DAVE enhancements were necessary, her staff created the
work orders and Caruso would review them, but Matthew ultimately approved and
signed them. See R.R. at 187a. In addition, Matthew reported regularly informing
Baker about the improvements BHSR experienced due to the enhancements installed,
and upcoming enhancements to be made. See R.R. at 122a, 124a, 137a, 188a.
The record is devoid of support for Matthew’s assertion that since
Caruso was the BHSR/BIT liaison, BIT knew about the VitalChek work orders and,
18
thus, should have maintained greater oversight of Matthew’s actions.22 See R.R. at
187a. Keating declared, and Chilcote verified, that Matthew and BHSR completely
managed the DAVE enhancement process and “took ownership of paying . . . without
involving [BIT].” R.R. at 48a. That fact is illustrated by the Work Order Process
Tracking document for the subject enhancements, which did not include BIT therein,
and was maintained in BHSR’s password-protected network drive, accessible only to
Matthew and her staff. See R.R. at 48a. Moreover, in the June 11, 2014 email
exchange, Caruso informed Matthew that Matthew’s plan to pay VitalChek without a
purchase order or BIT’s involvement would not work, and she sought Matthew’s
instruction on how to get VitalChek paid “independently of BIT.” R.R. at 302a.
Matthew – not Caruso or BIT – instructed VitalChek to work without a contract, and
not to send invoices for that work until after a contract was put in place. Finally, and
most importantly, Matthew affirmed Baker’s representation that Caruso was
prohibited from being involved with the Proposed Contract under which Matthew
instructed VitalChek to provide the services at issue. See R.R. at 140a, 192a, 195a.
Based upon the evidence and testimony the Commission found credible,
BIT was excluded from VitalChek’s DAVE enhancement process, and Matthew
directed Caruso’s actions related thereto. There is no record evidence that Caruso
could retain VitalChek’s services without Matthew’s approval and, by Matthew’s
own admission, Caruso could not participate in negotiations, let alone authorize
funding for VitalChek or direct work under the Proposed Contract. Accordingly,
there was substantial evidence to support the Commission’s conclusions that Matthew
22
We acknowledge Keating’s testimony that, in September 2013, he began to consider
replacing Caruso due to complaints regarding her general lack of communication with BIT. See
R.R. at 57a, 130a. However, Caruso’s purported inadequacies do not excuse Matthew’s failures.
To the contrary, armed with the knowledge of Caruso’s shortcomings, Matthew should have taken
even more care to ensure BIT’s full involvement. Rather, Matthew expressed her displeasure about
Caruso being replaced as project manager, and continued to exclude BIT. See R.R. at 57a, 130a.
19
was responsible for “manag[ing] the procurement process used by BHSR during her
tenure as its Director,” that she “knowingly authorized VitalChek to complete work
when she knew there was neither a contract nor a purchasing order in place[,]” and
that “BIT could not be responsible for making payments on invoices it never received
or for work it did not know was being performed.” Commission Adj. at 23. Under
the circumstances, it was not necessary for the Commission to issue specific findings
of fact concerning Caruso’s role in the VitalChek procurement that led to Matthew’s
removal.
Matthew next contends that the Commission erred by failing to consider
Matthew’s 24-year work performance record. See Matthew Br. at 31. We disagree.
Initially, we acknowledge that an employee’s work history may be relevant to
determining punishment levels. See Pa. Dep’t of Transp. v. State Civil Serv. Comm’n
(Boccinfuso), 84 A.3d 779 (Pa. Cmwlth. 2014). We also recognize that Matthew’s
2008-2009, 2009-2010 and 2012 evaluations reflect her previous exemplary work
performance. See R.R. at 445a-450a (N.T. Ex. AP-1), 451a-457a (N.T. Ex. AP-2),
462a-464a (N.T. Ex. AP-5). However, “just cause for removal is largely a matter of
discretion on the part of [Baker,] the head of the [D]epartment.” Szablowski, 111
A.3d at 261 (quoting Perry, 38 A.3d at 951).
According to Sheehan, who recommended Matthew’s removal to Baker:
Q. Did you take [Matthew’s] prior employment history with
the Department into account?
A. Yes. Yes, it was a very difficult decision. [Matthew]
had a great record[.] . . . She had a good work record,
but, unfortunately, the size, scope, and duration of this
lapse was too great to rehabilitate, we felt, as an
employer. The trust had been broken to the point where we,
as the employer, cannot trust [Matthew] to effectively
manage independently [D]epartment programs at this
point because of this, so ---.
20
R.R. at 167a (emphasis added); see also R.R. at 180a. Baker, who ultimately
approved Matthew’s removal, explained:
Q. In concluding that removal was the appropriate level of
discharge, did you take [] [Matthew’s] prior experience
with the Commonwealth into consideration . . . ?
A. Yes, and it probably made it, at least for me, a more
appropriate response of dismissal, because she had been
here a long time; she knew the rules. She had worked
with contracts and grants, I mean, the rules. I mean, if she
was an absolute newbie to the State Government, right or
wrong, it might have given you pause, but I was always
under the impression she knew the rules. So in that respect,
you know them, you know them. And if you’re not sure,
when you’ve been with the State long enough, you know
when to ask. You know when to go to someone saying can
I do this or can I not do this. And so I did expect that level
of understanding on her part.
R.R. at 136a (emphasis added).
Where, as here, both Baker and Sheehan expressly declared that they
reviewed and considered Matthew’s work history before concluding that removal was
the appropriate discipline for her actions, and the Commission found Sheehan’s and
Baker’s testimony credible, held that “the [Department] has properly supported its
charges,” Commission Adj. at 23, and concluded that “[t]he [Department] has
presented evidence establishing just cause for [Matthew’s] removal[,]” Commission
Adj. at 24, we hold that the Commission considered Matthew’s work performance
record.
Matthew further argues that the Department erred by removing her from
a civil service position due to her alleged failure to properly carry out procurement
duties she had while in a non-civil service position. Rather than asserting that the law
prohibits such action, Matthew specifically contends that the Department “set forth
21
no rationale as to how [her] alleged nonfeasance . . . as a non-civil service Director in
BHSR rendered [her] unfit for her lower civil service position[.]” Matthew Br. at 28.
The law requires that just cause must be merit-related, and must
rationally and logically touch upon Matthew’s competency and ability. Szablowski;
Wei. Thus, “to be sufficient, the cause should be personal to the employee and such
as to render the employee unfit for his or her position, thus making dismissal
justifiable and for the good of the service.” Pa. Bd. of Prob. & Parole v. State Civil
Serv. Comm’n (Manson), 4 A.3d 1106, 1112 (Pa. Cmwlth. 2010). Accordingly, there
is no legal prohibition against the Department removing a civil service employee
based on incompetency demonstrated in a non-civil service job.
Here, the Commission credited testimony about the Commonwealth’s
and the Department’s procurement procedures and policies, and Matthew’s
knowledge and violations thereof. Based on that record evidence, Matthew
knowingly approved at least 47 work orders over a span of six months for
VitalChek to provide $557,252.00 in IT services to the Department without a
contract in place under which VitalChek could be paid. Even if we assume
arguendo that Matthew was not aware that BIT had to issue a purchase order before
VitalChek executed Matthew’s work orders, and/or that Caruso was solely
responsible for notifying BIT about the work orders, the record evidence is clear that
Matthew: (1) was fully aware of VitalChek’s ongoing DAVE enhancements; (2)
approved the subject work orders; (3) intended for VitalChek to be paid for that work
under the Proposed Contract (about which Caruso was deliberately not provided any
information and had no oversight authority) and, thus, instructed VitalChek to wait to
bill the Department after the Proposed Contract was in place; (4) knew the Proposed
Contract was not effective when she approved the work and VitalChek completed it;
and (5) attempted to pay VitalChek by alternate methods, in violation of established
procedures.
22
Although Matthew’s removal stemmed from her procurement-related
errors as BHSR Director, we agree that the “size, scope and duration” of her
performance failures in this instance related directly to her competency and ability to
manage or supervise any Department business, i.e., authorizing work contrary to
policy, failing to properly oversee the process and intentionally seeking to avoid
disclosure of her actions. R.R. at 167a. Moreover, rather than investigate and/or take
responsibility for what she should have known as BHSR Director, or take ownership
of what clearly were her actions, she attempted to excuse her behavior and even went
so far as to blame Caruso and/or BIT for failing to stop her. Thus, the just cause for
Matthew’s removal was personal to Matthew.
Under the circumstances, the Commission properly found that Matthew
failed to adequately manage her duties as BHSR Director and, since her “actions
clearly reflect negatively upon her ability and competence to perform her job duties”
as WIC Bureau Director, Commission Adj. at 23, her dismissal was “justifiable and
for the good of the service.” Manson, 4 A.3d at 1112. Accordingly, we hold that the
Department did not err by removing Matthew from her civil service position based on
her failure to properly carry out procurement duties she had while in a non-civil
service position.
Matthew finally asserts that the Adjudication “evidences [the
Commission’s] arbitrary and capricious reasoning.” Matthew Br. at 34. We disagree.
Just cause for Matthew’s removal was within the Department’s discretion.
Szablowski. “‘To constitute an abuse of discretion, the [administrative agency] must
have based its conclusion upon wholly arbitrary grounds, in capricious disregard of
competent evidence.’ Lily Penn [Food Stores, Inc. v. Pa. Milk Mktg. Bd.], 472 A.2d
[715,] 719 [(Pa. Cmwlth. 1984)].” Unified Sportsmen of Pa. v. Pa. Game Comm’n,
18 A.3d 373, 382 (Pa. Cmwlth. 2011).
23
[Our Supreme Court has] defined a capricious disregard of
the evidence to exist ‘when there is a willful and deliberate
disregard of competent testimony and relevant evidence
which one of ordinary intelligence could not possibly have
avoided in reaching a result.’ Arena v. Packaging Sys[.]
Corp., . . . 507 A.2d 18, 20 ([Pa.] 1986); see also Leon E.
Wintermyer, Inc. v. Workers’ Comp[.] Appeal B[d.]
(Marlowe), . . . 812 A.2d 478 ([Pa.] 2002). Furthermore,
under the capricious disregard standard, an agency’s
determination is given great deference, and relief will rarely
be warranted. Wintermyer, 812 A.2d at 484.
Station Square Gaming L.P. v. Pa. Gaming Control Bd., 927 A.2d 232, 237-38 (Pa.
2007). “An appellate court conducting a review for capricious disregard of material,
competent evidence [still] may not reweigh the evidence or make credibility
determinations.” Wise v. Unemployment Comp. Bd. of Review, 111 A.3d 1256, 1263
(Pa. Cmwlth. 2015). Accordingly, “[w]here substantial evidence supports the
findings, and those findings in turn support the conclusions, it should remain a rare
instance where an appellate court disturbs an adjudication based on capricious
disregard.” Kiskadden v. Pa. Dep’t of Envtl. Prot., 149 A.3d 380, 401 (Pa. Cmwlth.
2016). Moreover,
the fact-finder ‘is not required to address each and every
allegation of a party in its findings, nor is it required to
explain why certain testimony has been rejected.’ Balshy
[v. Pa. State Police], 988 A.2d [813,] 836 [(Pa. Cmwlth
2010)]. The pertinent inquiry is whether the
[Commission’s] findings are supported by substantial
evidence. Id. ‘The findings need only be sufficient to
enable the Court to determine the questions and ensure the
conclusions follow from the facts.’ Id.
Kiskadden, 149 A.3d at 401.
In the instant matter, the Commission made extensive, detailed findings
in its Adjudication supported by substantial record evidence that Matthew authorized
VitalChek to perform work without a contract in violation of the
Commonwealth/Department’s procurement policy, and that her work performance
24
was unsatisfactory because she failed to adequately manage the BHSR’s procurement
activities. Accordingly, we hold that the Commission’s Adjudication did not contain
“arbitrary and capricious reasoning.” Matthew Br. at 34. Rather, viewing the
evidence and all reasonable inferences arising therefrom in a light most favorable to
the Department, as we must, Perry, we hold that the Commission properly sustained
Matthew’s removal and dismissed her appeal.
Based on the foregoing, the Commission’s Adjudication is affirmed.
___________________________
ANNE E. COVEY, Judge
Senior Judge Colins dissents.
25
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Marina O. Matthew, :
Petitioner :
:
v. :
:
State Civil Service Commission :
(Department of Health), : No. 1563 C.D. 2016
Respondent :
ORDER
AND NOW, this 6th day of September, 2017, the State Civil Service
Commission’s August 23, 2016 Adjudication is affirmed.
___________________________
ANNE E. COVEY, Judge