My question involves criminal records for the state of: California

Hi, my niece was prosecuted for shoplifting (misdemeanor) at the age of 18 years and 2 months. She was on probation and after two years went through the "expungement" process. Filed the appropriate papers, paid filing fees, went before the judge and I believe they changed the verdict to "Case Dismissed". I'm not really sure what that means as far as her criminal record goes or what will come up in a background investigation for employment. There are a lot of rumors and speculation as to what actually happens. Now, 5 years later, she has just completed all of her coursework for becoming an EMT. She graduated with honors and seems to have turned the corner staying out of trouble since the shoplifting incident. Her next step was to apply for a special driver's license for driving an ambulance. After taking a training course and getting a certificate she applied for an ambulance driver's license and was denied. They claim it was denied due to the criminal charge. Anyone have any experience with this or any ideas on what to do next?

Thanks!