Archive for Aviation program

BOARD MUM ON HAMILTON MULTI-MILLION DOLLAR LAWSUIT

College loses motions in federal court; whistle-blower lawsuit on way to jury

The District Governing Board went into executive session February 14, 2017 to apparently discuss the Hamilton v. Yavapai College multi-million-dollar lawsuit.  Following the closed session, there was no comment on what, if anything, was discussed. The dispute is now headed for trial on the whistleblower’s claims. Here are the details that you will only find in the Blog.

 Federal judge Murray Snow ruled in December, 2016 that a second whistle-blower case against the Yavapai College flight program will proceed.  The case alleges that Yavapai College’s airplane pilot program took millions of dollars from the VA by submitting false claims for veteran education benefits while knowingly violating the VA’s enrollment limitations. 

The Complaint was filed by the former director of aviation programs at Yavapai College, Dan Hamilton, and alleges that Yavapai College and its airplane program partner, NorthAire Aviation, violated the Veteran’s Administration funding rule that limits VA beneficiary enrollment to 85% in any program.  (In other words, the program must have at least 15% of its enrollees as civilians.)

The Complaint alleges schemes wherein NorthAire improperly paid for students whom the program certified were not receiving any institutional aid and that the program improperly counted students who were not in the airplane program including part-time, non-flight training, high school students for whom YC waived tuition.  The 85% enrollment limitation is the VA’s safeguard to guarantee that the programs have real world relevance, demand and market driven pricing. 

In an earlier ruling on December 6, 2016, Judge Murray Snow denied a motion to dismiss filed by Yavapai College’s partner NorthAire.  NorthAire argued that as a mere contractor with the College who did not, itself, submit the claims or certifications to the VA, it could not be held liable for the program’s fraud. 

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VA CRACKS DOWN ON AVIATION PROGRAM

BIG CHANGES IN YAVAPAI’S AVIATION OFFERINGS

The Veterans Administration has cracked down on Yavapai Community College and other institutions that have been offering helicopter and pilot training for veterans.  New regulations have been established that will help reduce what the VA considers overreaching by various educational institutions in the nation. Under the new regulations that went into effect August 1, 2016 students can no longer obtain a private pilot’s license essentially free as  part of Yavapai College’s aviation program.  Rather, all students must complete their private pilot training before they enter Yavapai College’s aviation program.

helicopter flight trainingThis regulatory development specifically impacts the Helicopter Operations and Airplane Operations concentrations of the Associate of Applied Science in Aviation Technology (AVT) degree at Yavapai College.  The private pilot applicable courses had to be removed from the two flight concentrations.

In addition, if a veteran in the helicopter emphasis wishes to fly anything other than an R-22 (the cheapest helicopter option), they will now be required to pay for it out of their own pocket. VA will no longer be paying for veterans to fly R-44’s or expensive turbine helicopters like the R-66 or Bell 206 Jet Ranger.

These changes have meant a loss of hundreds of thousands of dollar in tuition to the College. Recall the College was charging over $600 per credit for these courses; it has dropped it to $575 per credit for 2016-17.  

You can find additional information about the impact of the new VA regulations on the aviation program at Yavapai Community C0llege  by clicking here.

These changes were the result, at least in part, of investigations in 2015 into various flight schools and how much they were charging veterans for aviation training.  Yavapai College was prominent among those institutions. 

See also “U.S. taxpayers stuck with the tab as helicopter flight schools exploit GI Bill loophole,” by clicking here.

Hamilton v. Yavapai College before Federal District Judge Snow in Phoenix

COLLEGE UNABLE TO REACH AGREEMENT ON THE $60 MILLION DOLLAR LAWSUIT

The $60 million dollar lawsuit brought by the former Yavapai College Director of Aviation Programs, Daniel Hamilton, was transferred earlier this year to U.S. District Judge G. Murray Snow.   This is the same judge who recently ordered sweeping reforms over the Maricopa County Sheriff”s Office run by Joe Arpaio.

vector scales of justice and gavelThe assignment to Judge Snow may encourage the College to reach a settlement.

Recall that Hamilton is a professional aviator, a veteran and a decorated former F-16 fighter pilot who served as a captain in the U.S. Air Force from 1997 to 2007. He reportedly started his job with Yavapai College in Sept. 6, 2011, and was terminated on or about May 31, 2012.

The lawsuit focuses on the Yavapai Community College helicopter pilot training, which is offered through Guidance Aviation. According to Hamilton’s lawyer, “One of the educational programs under the Post 9/11 GI Bill is a helicopter flight training/degree program.” Among the requirements of the program is that no more than 85 percent of the students in the program can be funded by the VA or by the educational institution.  “No new VA benefits are paid when the computation establishes that the 85/15 ratio is not satisfied.” Mr. Hamilton’s lawsuit alleges that Yavapai College and Prescott-based Guidance Aviation fraudulently took tuition money for its aviation programs from the U.S. Veterans Administration’s Post-9/11 GI Bill, but did not comply with the program’s requirements. Along with the false claim allegations, Hamilton is also suing Yavapai College for wrongful termination under the False Claims Act whistleblower protection provisions and under state law.

Since the lawsuit was filed, the VA halted enrollment in the spring, 2015 in Yavapai College’s helicopter program. The program offered by Yavapai College,  along with Southern Utah University, was viewed as “one of most popular and expensive programs, which routinely charged more than $250,000 for a two-year course.”  See LA Times  story of June 27 by clicking here According to the Times, helicopter flight training companies were able to collect tens of millions of dollars a year through a loophole in the latest GI Bill “in part because officials didn’t enforce laws aimed at preventing abuse of veteran education benefits.” Click here for Times story. 

The VA sent a letter to the college in 2015 stating its aviation program did not meet the threshold of 15 percent of its enrollees being non-veterans. The GI bill states that any program it funds must be affordable enough that at least some students are willing to invest their own money, rather than being entirely funded by the federal government. All 90 students in the helicopter flight training program offered by Guidance Aviation through Yavapai are veterans, according to the letter. Helicopter training is the most expensive form of education paid for under the GI Bill. See March 23, 2015 Times story by clicking here.

The GI Bill  covers 36 months of tuition and fees for veterans in degree programs at public universities and colleges. It was thought, erroneously, that schools would act as natural allies in controlling costs. Instead, some schools have used their newfound ability to offer veterans all-expenses-covered training in costly helicopters as a recruiting tool.  

Yavapai College announced in May, 2016 that it was going to lose about a million dollars in tuition revenue in the 2016/17 fiscal year. The loss, according to the College, was the result in part of its inability to comply with the VA requirements. Enrollment in the aviation programs plummeted.

Note that the College charges persons in the helicopter program well over $500 per credit, rather than the $75 per credit it claims is the base tuition for courses.  Most of the fees and other costs associated with the aviation program are being paid by the American taxpayer via the Veterans Administration.  

The aviation program continues at Yavapai College but apparently now in compliance with the VA.

Aviation program loses $1 Million net Revenue (profit)

College failure to follow VA regulations is the reason for huge loss; what kind of management does this suggest?

Vice President Clint Ewell announced at the January 12, 2016 Governing Board meeting that the College was suffering a net loss of income (profit) of $1 million dollars in the coming year in its aviation program.   This is the result of the failure of the College to comply with Federal Regulations regarding the ratio of Veterans to nonveterans that must be in the program.

aviation mllion dollar loss with arrow

The formula is simple:  A college offering an aviation program for veterans must show that 15% of the enrollees in the program are non-veterans.  For a few years the College was dodging this requirement.  However, in March, 2015 the VA caught up with it and suspended the program.

The VA program is lucrative.  In fact, so lucrative that without it, Ewell announced a net loss of $1 million dollars.  

What does this say about the present College management?