Failure to Prevent and Investigate Misappropriation of Resident Funds
Summary
The facility failed to ensure that residents were free from misappropriation and exploitation of their funds. Multiple instances were identified where resident payments intended for care and room charges were deposited into a bank account that only the Business Office Manager (BOM) had access to. This account was unknown to other facility leadership and was used for personal purchases, including cash withdrawals, restaurant, and store charges. The BOM was the sole authorized user of this account, and the facility administrator only became aware of its existence after reviewing a bank statement. The administrator's subsequent investigation revealed that resident checks and insurance payments were being deposited into this unauthorized account, and the BOM closed the account after being questioned. Several residents and their families reported ongoing issues with missing funds, unexplained billing, and inability to access or account for their money. For example, one resident's family continued to receive bills despite having made substantial payments, and another resident was at risk of losing their place at an assisted living facility due to missing Social Security payments. In some cases, checks written from residents' personal checkbooks had signatures that did not match the residents' handwriting, and funds were withdrawn from resident accounts after discharge. Facility staff, including the social worker and administrator, expressed concerns about the whereabouts of resident funds and suspected misappropriation, but these concerns were not promptly or thoroughly investigated or reported to the state agency or law enforcement as required. The facility did not have or could not provide policies related to accounts receivable or resident funds when requested by the surveyor. Interviews with staff and family members revealed a lack of communication and transparency regarding the handling of resident funds. The administrator and other leaders failed to notify affected residents or their representatives about the suspected misappropriation, and there was no evidence of a thorough internal investigation prior to the survey. The facility's failure to act on suspicions of misappropriation and to report these incidents in a timely manner left residents at continued risk of financial exploitation and resulted in a finding of immediate jeopardy.
Removal Plan
- The NHA and member of a governing body conducted an audit of past residents' funds. Credits will be made to families who are owed. The NHA and member of the governing body reviewed the petty cash policy and implemented it.
- The Director of Nursing (DON), Social Service Director (SSD) and Minimum Data Set (MDS) nurse/care plan nurse will review clinical documents to identify any negative outcome that may have resulted from the alleged deficiency. The following documents were reviewed: NAR report, 24-hour summary, order report listing, incident report portal, transfer/discharge log, concern log and resident council minutes.
- The DON/SSD/Nurses will complete assessment of all residents to identify any negative psychosocial outcomes or worsening of overall condition that may have resulted from the alleged deficiency. The attending physician/Nurse Practitioner (NP) of the resident will be notified of any negative findings.
- The NHA/SSD/DON will conduct interviews of interviewable residents to identify if they have any concern related to mishandling, misused and/or misappropriation of their funds. Any identified concern will be reported to the state agency and law enforcement, and investigation will be conducted. For residents who are not able to participate in the interviews, the NHA/SSD/DON will interview the resident representatives.
- The corporate BOM will also audit all residents' status of benefits (Medicaid and Managed Care) to identify any concern. An investigation will be conducted if any concern is identified.
- Any identified misappropriation of residents' funds and exploitation will be reported to the NHA, state agency and law enforcement.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
A cognitively intact resident with psychiatric diagnoses had a $900 check cashed by social services and chose to keep the cash on her person after being advised to secure it. After an outing to Walmart and other locations with another cognitively intact resident, she reported that her wallet, containing approximately $400–$450, went missing from her bed. A CNA reported the loss, and staff searched both residents’ rooms, finding the wallet on top of the other resident’s dresser with the cash missing. The other resident denied taking the money or knowing how the wallet got into his room. The facility’s investigation substantiated a theft, constituting misappropriation of resident property under the facility’s abuse prevention policy.
A resident with dementia and multiple psychiatric diagnoses relied on a family member, acting as Responsible Party and POA, to manage finances and deliver applied income checks to the facility. The routine process involved the receptionist placing these checks into an unsecured business office mailbox, a procedure known to a CNA who had previously covered the reception desk. One such check, made payable to the facility, never reached the business office; instead, it was later discovered to have been mobile-deposited into the CNA’s personal bank account, with the CNA’s verified signature on the back of the check. This constituted misappropriation of the resident’s funds in violation of the facility’s abuse policy, which prohibits wrongful use of a resident’s belongings or money without consent.
A cognitively intact resident with multiple medical conditions, including diabetic retinopathy, PTSD, and a lower leg amputation, gave an LVN his debit card and PIN so she could buy him food. The resident later learned from his bank that multiple unauthorized transactions totaling $800 had been made, and he reported that the LVN admitted to using some of his money and agreed to repay it. The LVN acknowledged having the card to purchase items but denied using it without the resident’s knowledge. The Activities Director and Administrator stated that only designated staff, such as the Activities Director, were allowed to purchase items or assist with resident funds, and both were unaware that this LVN was handling the resident’s card, contrary to facility policies prohibiting misappropriation and limiting financial assistance to designated staff.
The facility failed to properly inventory and safeguard residents’ belongings and money, leading to missing items and inaccurate or absent inventory records. One hospice resident arrived with personal items documented by ambulance staff, but the facility’s admission inventory listed no belongings, and her representative later reported missing identification, a cell phone, and a debit card, along with unusual financial transactions and phone use after the resident’s death. The Administrator acknowledged a $1,200 monetary transaction between this resident and a CNA for an airline ticket but did not formally document or broaden the investigation. Another cognitively impaired resident was documented by the hospital as being discharged with $3,600 and jewelry, with instructions to facility admission staff to secure these valuables, yet the social worker later concluded the facility was not responsible when the items were reported missing and the admission staff did not recall the valuables. Additional audits found clothing labeled for another person among one resident’s belongings and a resident with multiple clothing items but no inventory sheet, despite a policy requiring admission inventories and safeguarding of valuables.
A resident with multiple chronic conditions and significant pain needs had an order for PRN oxycodone, and later two tablets were found missing from the resident’s oxycodone card and replaced with taped‑in pills that did not match the remaining tablets. During a shift‑change narcotic count, an LPN identified the non‑matching, taped‑in pills in two card slots, while another LPN acknowledged she had previously counted the narcotics without removing the card from the drawer. The facility’s investigation, as described by the RDCO, determined the substituted pills were melatonin and confirmed the oxycodone tablets were missing, but could not identify who took them or where they went, despite a policy stating that drug diversion is treated as misappropriation of resident property.
A resident who was cognitively intact and managed her own finances had her debit card information accessed by a former Business Office Manager while receiving assistance with a Medicaid application. Over several months, the former Business Office Manager used the resident’s debit card to make multiple unauthorized payments for personal credit cards, utilities, and internet service, totaling nearly $5,000. The misuse was not detected until after the employee resigned, when a Travel Business Office Manager reviewed historical bank statements for the Medicaid process and identified the suspicious transactions. The resident confirmed she had not authorized any of these charges and stated she would not have known about the missing funds without this review.
Failure to Protect Resident From Misappropriation of Money
Penalty
Summary
The deficiency involves the facility’s failure to protect a cognitively intact resident from misappropriation of property, specifically the wrongful use of her money. The resident, who had diagnoses including bipolar disorder, borderline personality disorder, and major depressive disorder, had a check for $900 cashed by social services, with staff advising her to keep the money safe or allow the business office to secure it; the resident chose to keep the cash on her person. After going on an outing to Walmart with another resident and spending a portion of the funds, she reported having approximately $400–$450 remaining in her wallet, which she last recalled seeing on her bed. On a subsequent morning, she discovered the wallet missing and reported this to a CNA, who then notified the nurse. Staff searched her room and the room of another cognitively intact resident who had accompanied her on the outing. During the search, staff found the missing wallet on top of the other resident’s dresser, but the cash was no longer inside. The resident whose wallet was taken reported that only the other resident had been in her room and that he knew she had the money. The other resident stated he did not know how the wallet ended up in his room and denied taking the money, though he acknowledged having gone out with the resident to Walmart and other locations before returning to the facility. The facility’s internal financial abuse report documented that the theft was substantiated, and the facility’s abuse prevention and reporting policy defines misappropriation of resident property as the deliberate misplacement, exploitation, or wrongful use of a resident’s belongings or money without consent. The events demonstrate that the resident’s money was misappropriated while under the facility’s care, in violation of the policy requirement to protect residents from misappropriation of property.
Misappropriation of Resident Applied Income Check by Staff Member
Penalty
Summary
A resident with dementia, psychotic disturbance, mood disturbance, anxiety, bipolar disorder, and muscle weakness had a family member designated as Responsible Party and Power of Attorney who managed the resident’s finances and routinely brought applied income checks to the facility. The resident’s assessment and care plan documented poor memory recall and a need for cues, reminders, prompting, and redirection. The facility’s usual process was for the family member to give the applied income check to the receptionist, who would then place it in an unsecured business office mailbox slot for later collection by the business office. A nurse aide who had previously covered the reception desk was familiar with this procedure. An applied income check from the resident, made payable to the facility and dated 3/9/26, was dropped off by the family member but did not reach the business office as intended. Subsequently, the family member reported to the business office manager that the check was missing and had been deposited via mobile deposit. After the family member provided a copy of the check, the business office manager observed a signature on the back that was identified and verified as belonging to the nurse aide. Further review determined that the bank account numbers associated with the deposited check matched the nurse aide’s personal banking account. The facility’s abuse policy, which prohibits misappropriation of resident property and defines misappropriation as the deliberate misplacement, exploitation, or wrongful use of a resident’s belongings or money without consent, was not followed when the resident’s applied income check, intended as payment to the facility, was wrongfully deposited into a staff member’s personal account.
Misappropriation of Resident Funds by Non‑Designated Staff
Penalty
Summary
The deficiency involves the facility’s failure to protect a cognitively intact resident from misappropriation of funds by a staff member. The resident, an adult male with diabetic retinopathy, lack of coordination, muscle weakness, PTSD, and a left lower leg amputation, had a BIMS score of 15 on a recent MDS, indicating he was cognitively intact. He reported that he trusted an LVN and gave her his debit card and PIN so she could buy him food. Later, his bank contacted him about a declined $300 payment and informed him that multiple small unauthorized withdrawals totaling $800 had been made from his account. The resident stated that only his son and the LVN had access to his card. After learning of the unauthorized transactions, he contacted his bank to stop the card and issue a new one. He reported that he confronted both his son and the LVN; according to the resident, the LVN admitted to using some of his money and agreed to repay it, which the resident stated she did through installments from her paychecks. The resident did not report the incident to the facility and stated this was the first and only time such an incident had occurred. A banker confirmed that the bank’s call center generated a report of declined transactions of $300, $100, $50, and $200 on the resident’s card, and that the resident said he had not authorized those transactions. The LVN acknowledged that the resident had given her his bank card to purchase items but denied using the card or the resident’s money without his knowledge. The Activities Director, who had long tenure at the facility, stated that she was the only staff member designated to purchase items for residents and that she was unaware of any other staff, including the LVN, doing so. The Administrator similarly stated that residents needing items could ask the Activities Director, that only designated staff should assist with resident funds, and that he had instructed staff not to take residents’ money or cards. He reported being unaware that this resident had a credit card in his possession and that he expected the LVN to direct the resident to the Activities Director and notify him so purchases could be tracked. Facility policies on abuse, neglect, and misappropriation, and on residents’ funds, specified that residents have the right to be free from misappropriation and that only designated staff may assist in managing resident funds.
Failure to Inventory and Safeguard Residents’ Belongings and Money
Penalty
Summary
The deficiency involves the facility’s failure to properly inventory and safeguard residents’ personal belongings and money, resulting in missing property and inaccurate or absent inventory documentation. For one resident admitted under hospice care, ambulance transport records showed she arrived with a bag of supplies, a cell phone, a wheelchair, and a backpack, while the facility’s admission inventory form documented “No Belongings upon arrival” and noted that donated clothes were provided. The resident’s responsible party later reported missing items including a cell phone, driver’s license, and debit card, and described abnormal financial activity and long-distance calls from the resident’s phone and withdrawals from her debit card after the resident’s death. The responsible party stated she had shared this information with the Administrator and requested help in investigating and retrieving the missing items, but reported that the facility had not taken responsibility for safeguarding the resident’s belongings. The Administrator acknowledged awareness of the responsible party’s concerns and confirmed that the resident had transferred $1,200 to a CNA to purchase an airline ticket to Zimbabwe, which he characterized as a highly unusual interaction between a resident and staff member. He stated that he determined the money was refunded when the resident was unable to take the trip and took no further action because there was nothing in the facility’s handbook or policy specifically prohibiting this type of transaction. The Administrator did not comment when presented with ambulance documentation indicating the resident arrived with belongings that were not reflected on the admission inventory, and he stated he did not expand his review to other residents under the CNA’s care and did not formally document the allegations or his investigation beyond some emails. For another resident with a BIMs score indicating severe cognitive impairment, the hospital discharge record documented that she was to be discharged with $3,600 in U.S. currency, a yellow necklace and bracelet, and two pendants, and that hospital staff had discussed these valuables with facility admission staff, who reportedly would document and secure them for safekeeping. The social worker reported that the resident’s family later raised concerns about missing money and jewelry and that, based on the resident arriving without belongings, she concluded the facility was not responsible. She stated she was aware of the hospital documentation and had interviewed the admission staff, who did not recall the conversation or valuables, and that the resident reported giving her money and jewelry to a Vietnamese man, although no such staff member worked at the facility at that time. Additional issues were identified during an inventory audit: one resident’s belongings included a housedress labeled with another woman’s name and room number, and another resident had multiple clothing items in his room but no inventory sheet in either the electronic or physical chart. These findings occurred despite a facility policy stating that residents have the right to be free from theft or misappropriation of personal property and that resident belongings are to be inventoried upon admission and safeguarded from easy public access.
Misappropriation and Undetected Diversion of Resident Opioid Medication
Penalty
Summary
The facility failed to protect a resident from misappropriation of property when two oxycodone tablets were missing from the resident’s prescribed opioid medication card and had been replaced with non‑matching pills. The resident had multiple serious medical conditions, including acute kidney failure, end‑stage renal disease, pleural effusion, hypertensive chronic kidney disease Stage V, diabetes, COPD, peripheral vascular disease, atrial flutter, and dependence on renal dialysis, and was care planned for pain related to chronic conditions and procedures. The resident’s orders included oxycodone 5 mg, two tablets every four hours as needed for pain, which was later discontinued. During a shift‑change narcotic count, two pills in the oxycodone card (in slots #2 and #6) were found taped into place, were not uniform in color, and were not scored like the other oxycodone tablets. One LPN reported that when she had counted the narcotics at the beginning of her shift, she did not remove the medications from the cart and only visually checked them in the drawer. Witness statements documented that on a prior count, the oxycodone card had no taped‑in medications, but at a later count the two taped‑in pills were present and did not match the remaining oxycodone tablets. The Regional Director of Clinical Operations stated that the facility’s investigation determined the two taped‑in medications were melatonin and that the two oxycodone tablets were missing, with no determination of who took them or where they went. The RDCO also stated that the pharmacy was notified of the missing oxycodone and that they inquired whether the resident was due any monies, despite the medication having been discontinued. When asked why the allegation of misappropriation was unsubstantiated, the RDCO could not provide an answer. Facility policy on controlled drugs and security stated that drug diversion would be treated as misappropriation of resident property and that the Board of Nursing would be notified as appropriate for known or suspected drug diversion after review and evidence collection.
Misappropriation of Resident Funds by Former Business Office Manager
Penalty
Summary
The deficiency involves the facility’s failure to protect a cognitively intact resident’s personal funds from misappropriation by a former Business Office Manager. The resident, who was her own responsible party and handled her own finances, was admitted on an unspecified date and later required assistance from the facility with an ongoing Medicaid application. During the period in question, the former Business Office Manager had access to the resident’s financial information, including her debit card, in connection with this assistance. Record review of the resident’s bank statements showed that, between late September and late December, the former Business Office Manager used the resident’s debit card to make multiple unauthorized payments for the former Business Office Manager’s personal expenses. These included several credit card payments, a natural gas payment, and an internet service fee, totaling $4,945.62. The resident confirmed in interview that she had not given permission for the former Business Office Manager to use her debit card and stated that the charges were not authorized. She also reported that she would not have known any money was missing from her account if the Travel Business Office Manager had not reviewed her past bank statements for the Medicaid application. The misappropriation was discovered only after the former Business Office Manager had resigned from employment. When the Travel Business Office Manager assumed the former Business Office Manager’s duties related to the resident’s Medicaid application and reviewed several years of bank statements, she identified transactions made in the name of the former Business Office Manager over a defined three‑month period. This discovery led to notification of facility leadership and external agencies, and subsequent interviews with the resident and multiple staff confirmed that the resident’s funds had been wrongfully used for the former Business Office Manager’s personal bills. No other residents were identified as having unauthorized charges during the time the former Business Office Manager was employed, but the facility’s failure to prevent or detect the misuse of this resident’s debit card resulted in misappropriation of the resident’s personal funds.
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