(1) The department, after written notice to the applicant or licensee, may deny, suspend, restrict, revoke or reduce to a provisional status a license upon finding that:

(a) the agency is not in substantial compliance with licensing requirements established by these rules;

(b) the agency has made any misrepresentations to the department, either negligent or intentional, regarding any aspect of its operations or facility; or

(c) the agency or a member of its staff have been named as a perpetrator in a substantiated report of child abuse or neglect.