Misappropriation of Resident Funds Through Unauthorized Checks and Forged Signatures
Penalty
Summary
The deficiency involves the facility’s failure to protect residents from misappropriation of their personal funds when an administrative staff member wrote checks and forged signatures on resident accounts without proper authorization. One resident had dementia with moderately impaired cognition, required assistance with most ADLs, and had a documented diagnosis of dementia. This resident’s EHR did not contain any written authorization from the resident or the resident’s representative allowing the facility to manage personal funds, as required by facility policy. Despite this, an administrative staff member assumed responsibility for the resident’s finances and engaged in financial transactions on the resident’s behalf. According to the facility’s investigation notes and staff and representative statements, the resident’s representative was contacted by the bank’s fraud department about suspicious checks drawn on the resident’s account and deposited into the administrative staff member’s personal account. The administrative staff member stated she had written a large check in the past to apply toward the resident’s liability to the facility and later wrote two additional checks for several hundred and over one thousand dollars each, made out to the facility in care of herself. She reported that she deposited these checks into her personal bank account, then took cash to the facility and placed it in a safe, claiming it was part of a spend-down process to help the resident qualify for Medicaid and to provide the resident with money after Medicaid started. The resident’s representative reported that the administrative staff member admitted depositing the checks into her personal account and said she planned to keep the money in a closet and return it to the resident after Medicaid began. Further review by the facility revealed two additional instances in which the same administrative staff member forged signatures to cash checks belonging to two other residents, resulting in misappropriation of smaller amounts from their accounts. The facility’s policies on abuse prevention and management of residents’ personal funds stated that residents have the right to be free from misappropriation of property and that any management of resident funds by the facility must be authorized in writing and documented in the resident’s EHR. In these cases, checks were written, signatures were forged, and resident funds were deposited into a staff member’s personal account without appropriate written authorization or adherence to the facility’s stated procedures for handling resident funds.
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