Insufficient Surety Bond for Resident Personal Funds
Penalty
Summary
The facility failed to assure the security of all personal funds deposited by residents by not maintaining a sufficient surety bond to cover the total amount of resident funds managed. Review of the facility's policy on Resident Personal Funds indicated that a surety bond or other satisfactory assurance must be in place to secure all resident funds. Examination of bank statements over a six-month period showed that the facility held resident funds exceeding $100,000, with balances ranging from $106,898.12 to $133,831.89 during several months. However, the surety bond in effect during this period was only $100,000, which was not adequate to cover the highest balances held in resident accounts. Interviews with the Administrator and the Director of Regulatory Compliance (DRC) confirmed that the surety bond should be sufficient to cover the total balance of resident funds. The DRC later provided documentation of an increased surety bond amounting to $150,000, but this updated bond only became effective after the period in question and did not retroactively cover the higher balances previously held. As a result, the security of personal funds for 56 accounts managed by the facility was not fully assured during the months when the resident fund balances exceeded the surety bond amount.