Failure to Maintain Surety Bond for Resident Trust Funds
Summary
The facility failed to maintain a surety bond to protect the account balance of the resident trust fund, which had the potential to affect 23 of 41 residents with trust accounts managed by the facility. During an interview, the office manager, responsible for the resident trust funds, was unable to locate a copy of the surety bond and indicated a need to follow up with the corporate office. The administrator later provided a document titled 'Erisa Dishonesty Bond Edition of 10/1/17' from Spring Valley Mutual Insurance Company, which covered employees insured by employee benefit plans but did not include coverage for residents with trust accounts. Despite additional requests, no further documents specific to the resident trust accounts were received. The facility's policy on handling resident finances and property requires that any party responsible for managing residents' personal funds be bonded or insured in sufficient amounts to cover losses of resident funds and provide proof of such bond or insurance.
Penalty
Resources
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The facility failed to ensure resident personal fund accounts were covered by adequate surety bond protection. Records showed 33 residents had positive account balances totaling more than the bond limit, and the administrator acknowledged the bond would not fully cover the resident funds. The documents provided did not include a surety bond policy.
Surety Bond Did Not Cover Resident Trust Funds: The facility failed to ensure its surety bond exceeded the total resident trust fund balance. Record review showed resident trust fund balances were higher than the bond amount, and the BOM verified that both the April balance and the current balance exceeded the bond. The BOM stated a bond increase was requested.
The facility failed to ensure its surety bond named only the residents as the obligee. Review of the prior bond showed the obligee was listed as the residents of Spring Hill Rehabilitation Center or unto the Commonwealth of Pennsylvania, and the NHA confirmed the bond was not limited to residents only.
Surety Bond Did Not Cover Resident Trust Funds: The facility failed to ensure its surety bond covered the total amount in resident trust fund accounts. The Resident Trust Fund policy required bond coverage at least equal to resident funds and quarterly review by the BOM, but the current bond was $150,000 while monthly statements showed the resident fund balance exceeded that amount in most months reviewed. The BOM confirmed the bond was insufficient and stated the Regional Account Manager was aware, but no documentation of that notification was provided.
Resident trust funds were not fully covered by adequate surety bond protection. The business office manager confirmed the resident personal funds account balance totaled $40,688.56 for 34 residents, while the CFO confirmed the bond penalty amount was only $10,000 and said it should have been $100,000. Review of the bond and rider showed the lower coverage was in effect before the rider increased it, despite facility policy requiring a surety bond to secure all resident personal funds.
Insufficient Surety Bond for Resident Funds: Facility staff failed to maintain a surety bond large enough to secure resident funds held by the facility. Review of the trust fund account showed an average monthly balance that required a bond of $75,000 or more, but the facility only had a $70,000 approved non-cancelable Escrow Agreement Account. The BOM and administrator both stated they were responsible for resident funds and were not aware the bond was insufficient.
Insufficient Surety Bond Coverage for Resident Funds
Penalty
Summary
The facility failed to ensure resident personal fund accounts were insured with adequate surety bond coverage to cover the total account balance. A Bond Execution Report dated 5/10/19 showed the facility had a surety bond in place for up to $25,000.00, but the resident fund account record dated 7/29/26 identified 33 residents with positive fund balances totaling $38,563.85. During an interview on 7/30/26 at 8:26 a.m., the administrator acknowledged the surety bond would not fully cover the residents' personal funds and stated corporate oversaw the bond. The administrator also stated that when she contacted corporate, she was told the bank holding the resident funds was FDIC insured. When a facility surety bond policy was requested, the documents provided were Trust Fund Accounting & Records dated 11/2017 and Trust Fund Authorization dated 9/2019, and neither included information about a surety bond.
Surety Bond Did Not Cover Resident Trust Funds
Penalty
Summary
The facility failed to ensure the surety bond exceeded the total resident trust fund balance for residents whose personal funds were deposited with the facility. The facility’s Resident Personal Funds policy states that the facility will purchase a surety bond, or otherwise provide assurance satisfactory to the Secretary, to assure the security of all personal funds of residents deposited with the facility. Record review showed the facility’s Bond Continuation Certificate had an insured sum of $117,000, while the Commercial Interest Checking statement for 4/1/26-4/30/26 documented resident trust fund balances beginning at $126,776.99 and ending at $150,821.17, with a minimum balance of $128,100 and average balance of $150,582. The Trial Balance dated 6/2/26 documented a total resident trust fund balance of $157,677.38. Residents R15, R138, and R92 were included in the resident trust fund balances reviewed. On 6/02/2026, the Business Office Manager verified that the resident trust fund balance for April 2026 exceeded the facility’s surety bond and confirmed later that the current resident trust fund balance also exceeded the bond, stating that a surety bond increase was requested that day.
Surety Bond Listed Incorrect Obligee
Penalty
Summary
The facility failed to ensure that the surety bond listed the obligee as only the residents of the facility. Review of the facility’s previous surety bond showed that the obligee was listed as "the residents of Spring Hill Rehabilitation Center or unto the Commonwealth of Pennsylvania," rather than residents only. During an interview, the Nursing Home Administrator confirmed that the facility failed to list the obligee as only the residents of the facility.
Surety Bond Did Not Cover Resident Trust Funds
Penalty
Summary
The facility failed to ensure that its surety bond covered the total amount of money in residents’ personal fund accounts. Review of the facility’s Resident Trust Fund policy showed the bond was required to be at least equal to the total amount of residents’ funds as of the most recent quarter, and that the BOM was to review the bond amount quarterly for adequate coverage. The facility’s current surety bond was $150,000, but review of monthly resident fund statements from 11/30/2025 through 05/19/2026 showed that six of seven months exceeded the bond amount. As of 05/19/2026, there were 101 resident accounts with monies. During interview, the BOM confirmed the bond did not cover the amount currently in the resident personal fund account and stated the Regional Account Manager was aware, but no documentation was provided showing notification to the Regional Account Manager.
Resident Trust Funds Not Fully Covered by Surety Bond
Penalty
Summary
Assure the security of all personal funds of residents deposited with the facility was not maintained because the facility did not ensure resident personal fund accounts were insured with adequate surety bond coverage to cover the total account balance. During interview and document review, the business office manager confirmed the residents' personal funds accounts totaled $40,688.56 for 34 residents. The CFO confirmed the facility's surety bond for resident personal funds identified a penalty amount of $10,000 and stated the bond should cover $100,000, noting they needed to contact their insurance representative for clarification. Review of surety bond number 2653018 showed a $10,000 bond in effect from 7/23/25 through 7/23/26, and a rider dated 4/23/26 showed the bond increased from $10,000 to $100,000 effective 4/23/26. The facility policy stated it would maintain a surety bond to assure the security of all resident personal funds deposited with the facility.
Insufficient Surety Bond for Resident Funds
Penalty
Summary
Assure the security of all personal funds of residents deposited with the facility was deficient because facility staff failed to purchase a surety bond in an amount sufficient to cover all resident funds held by the facility. The facility census was 44.1, and review of the resident trust fund account for March 2025 through February 2026 showed an average monthly balance of $47,132.42, which required a surety bond of $75,000 or greater. Review of the DHSS database showed the facility had an approved non-cancelable Escrow Agreement Account in the amount of $70,000. During interviews, the BOM stated he/she was responsible for resident funds and ensuring the bond was sufficient but was not aware it needed to be increased, and the administrator stated the BOM was responsible for resident funds and ensuring the surety bond was sufficient but was not aware the bond was insufficient.
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