Inadequate Surety Bond Coverage for Resident Personal Funds
Penalty
Summary
The facility failed to ensure that resident personal fund accounts were protected with a surety bond sufficient to cover the total balance of all resident funds held by the facility. During an interview, the administrative assistant reported that the total amount of resident funds was $91,117.79. However, documentation provided by the administrator showed that the facility's surety bond only covered up to $50,000, which was less than the total amount of resident funds on hand. The administrator explained that the bond amount was based on a 12-month average balance and acknowledged that a recent property sale by a resident had increased the total balance significantly, with two residents accounting for more than $58,000 of the total funds. Further document review included a resident statement showing a balance of $20,995.70 for one resident after a large bank credit, and a trial balance listing 166 residents with accounts at the facility. The facility's policy on deposit of resident funds stated that personal funds would be safeguarded but did not include information about maintaining a resident trust fund surety bond. The lack of adequate surety bond coverage had the potential to affect all residents with positive account balances.