Failure to Manage Resident's Financial Affairs and Inform of Tax Refund Checks
Summary
The facility failed to ensure the resident's right to manage their financial affairs, as evidenced by the mishandling of a resident's tax refund checks. The resident, who was cognitively intact and had been living at the facility for approximately four years, reported during a Resident Council Meeting that the facility did not inform them upon receipt of their tax refund checks. The checks were opened and deposited into the facility's operating account without the resident's written authorization. The facility's policies on privacy, confidentiality, and resident rights were not adhered to, as there was no documented evidence of the resident's consent to manage their finances or open their mail. The Business Office Manager confirmed that the tax refund checks were deposited into the resident's account without informing the resident. The facility was unable to provide documented evidence of the resident's written authorization for the facility to manage their finances or a detailed accounting of the transactions related to the tax refund checks. Additionally, the facility failed to provide the resident with quarterly statements or detailed transaction history, which are required to ensure transparency and accountability in managing resident funds. Interviews with the Business Office Manager and the Administrator revealed a lack of communication and oversight regarding the handling of resident mail and financial management. The Administrator, who was not involved in the Business Office operations, was unaware of the practices related to opening resident mail and depositing checks. The facility's failure to inform the resident and obtain proper authorization for managing their finances resulted in a deficiency in maintaining a system that assures a full and complete accounting of the resident's personal funds.
Penalty
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The facility did not timely update resident trust account records, causing multiple accounts to show negative balances that staff acknowledged did not reflect actual resident funds. Fourteen residents with various chronic conditions, including dementia, schizophrenia, depression, COPD, and DM, were affected, with negative balances ranging from small amounts to over one thousand dollars. Staff interviews revealed that the Business Office Manager relied on the Executive Director to provide information on cashed checks and cost-of-care payments, and both the Administrator and Executive Director admitted they were behind on bookkeeping and documentation. Facility policies allowed residents or their representatives to request account balances and detailed fund activity, but the delayed updates meant the financial records were not accurate at the time of review.
The facility failed to maintain accurate accounting and recordkeeping for resident trust funds, affecting two cognitively intact residents who relied on the facility to manage their personal money. One resident reported requesting holiday gifts, snacks, soda, and a replacement cell phone through the Business Office Manager but did not receive or sign receipts, did not know the cost of the phone, and had only ever received a single account statement after specifically requesting it. Another resident stated she had a trust fund and used it as needed but had never received an accounting or quarterly statement. The former Business Office Manager acknowledged that in at least one case involving soda purchased by the Activity Director, no receipt was obtained and the resident did not sign anything. After the Business Office Manager left, corporate leadership found pouches with loose cash and notes but almost no receipts, and record review showed missing or incomplete documentation, unsigned or undated receipts, inconsistent signatures, and transactions not reflected in the trust fund ledger, all contrary to the facility’s own policy requiring complete, filed financial transaction records.
The facility failed to maintain an effective process to track and refund a required $6,000 security deposit owed to a discharged resident under a prior admission agreement. Under the former management’s contract, a deposit was collected at admission and was to be refunded after discharge, but later invoices contained no record of the deposit. The resident, who had severe cognitive impairment and multiple diagnoses, was transferred to another facility with coordination involving the resident’s daughter. Interviews showed that current leadership, including a Regional Nurse Consultant and the Administrator, were unaware of the prior deposit/refund requirement or the specific deposit, and the current admission agreement did not address handling of deposits collected under the previous management, resulting in the deposit not being identified and returned at discharge.
A resident with Parkinson's disease, moderately impaired cognition, and dependence on staff for ADLs had Social Security benefits totaling over $27,000 deposited by SSA into the facility's payroll bank account over several months, where the funds were used for employee paychecks instead of being placed in a separate trust or personal funds account. A business manager later discovered the deposits in payroll bank statements and reported them to leadership, but no action was taken to return the money to the resident's estate, and a subsequent review confirmed no reimbursement had occurred. The administrator acknowledged that the resident's funds were co-mingled with facility funds, contrary to the facility's written policy prohibiting resident trust funds from being combined with facility funds.
The facility failed to provide accurate quarterly statements for resident trust fund accounts and did not issue any quarterly statements to multiple residents with Individual Resident Fund accounts. A cognitively intact resident with multiple chronic conditions reported not receiving expected trust fund money and being limited to smaller withdrawals than the balance shown on the Resident Trust Sheet, and stated he had never received a quarterly statement. Other cognitively intact residents reported receiving regular $30 disbursements but never receiving quarterly statements, and one resident stated he requested an audit but was not given an account statement. Another resident with moderately impaired cognition also reported never receiving a quarterly statement. The Business Office Manager confirmed that quarterly statements had not been provided for an extended period, that residents only saw balances at the time of weekly withdrawals, and that the balances on the trust fund sheets were inaccurate because deposits and credits were not included and did not match RFMS records, contrary to facility policy requiring quarterly transaction statements.
A resident with moderate cognitive impairment, whose personal funds were managed by the facility, did not receive required quarterly trust fund statements. The administrative assistant responsible for resident fund accounts reported that quarterly statements were not routinely provided and were only printed upon request, without tracking which residents received them. Facility records showed dozens of residents had personal accounts managed by the facility, and policy required quarterly trust fund statements to be available to residents or their legal representatives.
Untimely Resident Trust Account Updates Result in Inaccurate Negative Balances
Penalty
Summary
The facility failed to properly hold, secure, and manage residents' personal funds by not keeping resident trust account financial records timely updated, resulting in multiple accounts showing negative balances. Fourteen residents' financial records were reviewed, and each showed a negative balance as of 02/27/26, despite facility leadership stating that most of these residents did not actually have negative balances. The residents involved had a range of medical diagnoses, including hypertension, dementia, schizophrenia, major depressive disorder, COPD, diabetes, and other chronic conditions, and several had documented cognitive impairments ranging from mild to severe, while others were cognitively intact. Specific review of each resident's trust account information dated 02/27/26 revealed negative balances varying in amount. One resident had a negative balance of -$970.99, another had -$31.45, and others had negative balances such as -$59.09, -$77.14, -$110.97, -$31.57, -$56.96, -$44.47, -$4.73, -$18.97, -$64.57, -$39.72, and -$36.71. One resident's account showed a significantly larger negative balance of -$1,819.10. These negative balances were documented for residents with differing cognitive statuses, including residents whose MDS assessments showed severe cognitive impairment, mild cognitive impairment, intact cognition, and some whose cognitive status had not yet been evaluated. Interviews with facility staff confirmed that the negative balances were largely due to delays and backlogs in bookkeeping and updating of financial records, rather than actual overspending by residents. The Business Office Manager stated that many resident financial records were not up to date and that she depended on the Executive Director to provide information about cashed checks and cost-of-care payments before she could update the accounts. The Administrator acknowledged that the facility was behind in paperwork and bookkeeping, resulting in resident financial records reflecting negative balances that did not correspond to the residents' true financial status. The Executive Director confirmed he could fall behind on documenting resident financial expenses and revenues and that most residents with negative balances did not truly have negative balances because the records had not yet been updated. Facility policies stated that residents are permitted to manage their personal funds or, if managed by the facility, to receive quarterly statements and to obtain their account balances and written breakdowns of fund activity upon request, underscoring the requirement for accurate and timely financial recordkeeping that was not being met.
Failure to Maintain Accurate Trust Fund Accounting and Provide Resident Financial Records
Penalty
Summary
The deficiency involves the facility’s failure to properly manage and account for residents’ personal funds held in trust accounts. Two cognitively intact residents, a 65-year-old male with dementia, Bell’s palsy, depressive disorders, and Parkinson’s disease, and a 52-year-old female with multiple sclerosis, congestive heart failure, heart failure, and chronic pain, both had trust fund accounts managed by the facility. The facility did not maintain an accurate running ledger for these residents, did not consistently retain or associate receipts with trust fund transactions, and did not provide regular or requested account statements as required by policy. The male resident reported that in December he requested the Business Office Manager (BOM) to purchase Christmas presents and later requested snacks and multiple cartons of soda, as well as a replacement cell phone after his phone broke. He stated he did not see or sign receipts for these purchases, did not know the cost of the phone, and had not received receipts for purchases in January or February. He also reported that he had only ever received one account statement, in November, and only after specifically asking for it, and that he had not seen any accounting of what was purchased with his funds. The former BOM stated that when she gave money out she had residents sign receipts and claimed she always had residents sign receipts for purchases, but she acknowledged that in the case of the soda purchased by the Activity Director (AD), the resident was not made to sign a receipt and she did not receive a receipt for that purchase. The female resident stated she had a trust fund account, knew she had money in it, and used it as needed, but had never received an accounting of what was spent or a quarterly statement. The Administrator reported being unaware of any issues with trust fund accounts and noted that shopping duties had been switched from the former AD to the former BOM, though she could not recall when this occurred. The Corporate CEO reported that after the former BOM left, they found several zippered pouches with random $10 bills and little notes, but no receipts other than a few she had provided, and that she and the Administrator could not find further information on trust fund accounts. Record review showed that the facility bank statement for January did not reveal separate purchases for residents with trust funds, and the trust fund records for the male resident in December lacked receipts or itemized purchase information. Receipts that were produced for that resident’s purchases included several phone and snack purchases, some undated or unsigned, with signatures that appeared inconsistent, and these amounts were not listed in the facility’s trust fund paperwork, contrary to the facility’s written policy requiring safeguarding, managing, and accounting for residents’ personal funds and filing copies of all financial transactions in the resident’s permanent record.
Failure to Track and Refund Resident Security Deposit After Discharge
Penalty
Summary
The deficiency involves the facility’s failure to implement a process to identify and return refundable resident deposits upon discharge, as required under a prior admission agreement. The previous management’s admission contract, revised on 3/22/23, required a $6,000 interest‑free security deposit to reserve a room, with the deposit to be refunded within 45 days after discharge, less applicable balances. Review of records for one resident showed an application dated 4/2/25 with a documented $6,000 deposit and additional room and board charges due at signing. However, later invoice review showed no documentation of the $6,000 deposit. The current admission agreement under new management did not address the prior $6,000 deposit requirement or how deposits made under the previous management’s contract would be handled. The resident associated with the missing deposit had severe cognitive impairment and diagnoses including HTN, non‑Alzheimer’s dementia, and asthma, and was discharged to another facility, as documented in progress notes describing coordination with the resident’s daughter and transfer by transportation with a Broda chair and Hoyer pad. Interviews revealed that the Regional Nurse Consultant was unaware of the prior contract’s $6,000 deposit and refund requirement and stated that the new management did not require such deposits, though they were still under the previous management until the change of ownership was completed and were honoring the original contract. The Administrator reported that funds were not turned over during acquisition and that all information had been requested from the previous ownership, but also stated unawareness of the specific deposit while acknowledging that the corporate Business Office Manager knew of it. These findings show that the facility lacked an effective process to track and return refundable deposits owed to discharged residents under the prior agreement.
Co-mingling of Resident Social Security Funds with Facility Payroll Account
Penalty
Summary
The facility failed to properly manage and safeguard a resident's personal funds by allowing the resident's Social Security benefits to be deposited into the facility's payroll account and used for employee paychecks over a six-month period. The resident, who had Parkinson's disease, moderately impaired cognition, and was dependent on staff for ADLs, had Social Security payments totaling $27,568.37 deposited by the Social Security Administration into the facility's payroll bank account on multiple occasions. Bank statements showed deposits made on behalf of the resident in one large lump sum followed by monthly deposits, all going into the payroll account rather than a separate resident trust or personal funds account. The business manager who discovered the issue while reviewing payroll bank statements reported that the deposits occurred over several months and informed the former administrator, the facility owner, and the payroll assistant, but no efforts were made to return the funds to the resident's estate. A subsequent review by a new business manager confirmed there was no evidence that the resident's Social Security funds had been returned, and no check had been issued from the payroll account to the resident's trust account. The current administrator acknowledged that the resident's Social Security funds were co-mingled with the facility's payroll account and stated that the appropriate action would have been to return the funds to the resident's trust or estate. The facility's undated policy on resident trust funds stated that money deposited to the account should not be used or combined with facility funds, which was not followed in this case.
Failure to Provide Accurate Quarterly Resident Trust Fund Statements
Penalty
Summary
The facility failed to provide accurate quarterly statements for residents’ personal trust fund accounts and did not issue any quarterly statements at all to several residents with Individual Resident Fund accounts. One resident with intact cognition, diagnosed with Parkinson’s disease, dementia, hypertensive heart disease, anemia, dysphagia, cognitive communication deficit, osteoarthritis of the hip, scoliosis, insomnia, benign prostatic hyperplasia, major depressive disorder, and blepharospasm, reported not receiving trust fund money for the last two weeks and stated he was denied access to the full $200 reflected on his Resident Trust Sheet, being told he could only receive $30. He also reported never receiving a quarterly statement during his stay. Other cognitively intact residents reported that they regularly received $30 from their trust fund but had never received quarterly statements, and one resident stated he had requested an audit of his account but was not provided with a statement and wanted to receive it regularly. Another resident with moderately impaired cognition similarly reported never receiving a quarterly statement of the trust fund account. The Business Office Manager confirmed that quarterly statements were not being provided to residents and explained that residents only saw their balance when they received weekly trust fund money. The Business Office Manager further acknowledged that the balances on the Resident Trust Fund Sheets were inaccurate because they did not include deposits or credits and did not match the balances reflected on the RFMS statements. The Business Office Manager stated that quarterly statements had not been provided since 2023. Facility policy on Resident Personal Trust Fund, dated 4/15/2024, requires that a quarterly statement of all transactions, including withdrawals, direct charges, deposits, and interest, be prepared and provided to the resident or legal representative. A CMS Form 671 documented that 111 residents resided in the facility at the time of the survey, indicating the potential for this deficiency to affect all residents with trust fund accounts.
Failure to Provide Quarterly Resident Trust Fund Statements
Penalty
Summary
The facility failed to provide required quarterly personal account statements to a resident whose funds were managed by the facility. Clinical record review showed that Resident #1 was admitted on 12/30/24 and had a BIMS score of 11/15 on the 12/18/25 MDS, indicating moderate cognitive impairment. During an interview, Resident #1 stated the facility assisted with managing her money and reported she had not received a quarterly statement, nor had she requested one. A review of the facility’s list of resident personal accounts showed 46 residents, including Resident #1, had funds managed by the facility. In an interview, the Administrative Assistant, who was responsible for maintaining resident fund accounts, reported that she did not provide quarterly account statements to residents. She stated she only printed statements when residents or their representatives asked and did not track which residents had received statements. She confirmed that Resident #1 had not received a quarterly statement and would only receive one upon request. Review of the facility’s “Resident Trust Fund” policy, dated 10/17/25, revealed that quarterly statements regarding resident trust funds were to be available to the resident and/or the legal resident representative, which was not being done for Resident #1.
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