Unauthorized Use and Poor Accounting of Resident Trust Funds
Summary
The deficiency involves the facility’s failure to properly manage resident personal funds, including making unauthorized purchases from resident trust accounts and failing to provide required quarterly account statements. For multiple residents, surveyors identified debits to online retailers that were not signed or authorized by the residents or their representatives, despite facility policy requiring such authorization via vouchers or check request forms. The facility also did not document that quarterly resident fund statements were sent to the residents or their representatives for the fourth quarter of 2025 and the first quarter of 2026. One affected resident had congestive heart failure, Alzheimer’s disease, and aphasia, was severely cognitively impaired, and required staff assistance with ADLs. This resident’s fund statement showed debits for online retailer purchases in specific amounts on two dates, and the resident’s representative had not authorized these transactions. The Administrator verified that these purchases were made from the resident’s funds without authorization and confirmed that quarterly statements for the relevant quarters had not been provided to the resident or representative. Another resident, cognitively intact with type 2 diabetes mellitus, PTSD, and osteoarthritis, had a substantial increase in account balance over a quarter, yet there was no documentation that quarterly statements were sent, which the Administrator also confirmed. Additional residents with varying levels of cognitive impairment and medical conditions, including type 2 diabetes mellitus, pulmonary hypertension, generalized anxiety disorder, epilepsy, end stage renal disease, aphasia following cerebral infarction, anxiety disorder, cerebral infarction, and Alzheimer’s disease, were similarly affected. Their quarterly fund statements showed multiple debits to an online retailer on various dates and in specific amounts, none of which were signed or authorized by the residents or their representatives. For each of these residents, record review showed no documentation that quarterly statements for the fourth quarter of 2025 or the first quarter of 2026 were sent, and in interviews, the Administrator consistently verified both the unauthorized nature of the purchases and the failure to provide the required quarterly statements. Review of the facility’s undated Resident Trust Funds policy showed that resident fund withdrawals were supposed to be supported by signed vouchers or check request forms and invoices, which was not followed in these cases. Across all six residents reviewed for this issue, the survey findings demonstrated that the facility did not maintain resident fund accounts using basic accounting principles as required by its own policy. Unauthorized online purchases were repeatedly charged to resident accounts without the required signatures or documented consent, and there was a systemic lack of documentation that quarterly fund statements were provided to residents or their representatives for two consecutive quarters. These actions and omissions formed the basis of the cited deficiency related to the management and safeguarding of resident personal funds.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
Failure to provide quarterly resident trust fund statements for three residents and to accurately account for one resident's personal funds. Facility records showed active resident fund accounts, but no evidence that quarterly statements were sent to residents or their reps. For one resident, the acct reflected only one month's allowance after a lump-sum payment that covered several months, and the ABOM confirmed the resident fund statement was inaccurate.
Resident funds were not properly managed or accounted for. A resident with intact cognition, ADL dependence, and monthly SSA income had a resident fund account and patient liability obligations, but the BOM reported using the resident’s bank card to make ATM withdrawals from a shared account, converting the cash to cashier’s checks, and depositing the money into the facility account without written authorization. The BOM could not verify the resident’s monthly allowance or fully track what had been paid toward patient liability, and the facility policy required separate resident accounting, receipts, signatures, and no commingling of funds.
Resident trust petty cash was not properly safeguarded because cash from other sources was commingled with resident funds and the account did not reconcile to the expected $600 balance. An AA reported that families sometimes gave money for visitor meal tickets at the front desk and that cash from the box was also used for change, while the business office only reconciled the account periodically. The Administrator, DON, and ADON stated resident petty cash should be balanced and kept separate from other money.
Failure to provide quarterly resident financial statements: A resident with encephalopathy, schizophrenia, anxiety disorder, and moderately impaired cognition had Social Security checks deposited into the facility's bank account, but the BO did not inform the resident of the deposits or provide quarterly financial statements. The DON stated the resident's physician should have participated in the financial decision-making process and the resident should have signed an appointment form for management of personal funds.
Failure to provide quarterly personal funds statements to designated representatives for several residents with severe cognitive impairment. A resident with dementia, another with Alzheimer’s disease and bipolar disorder, and a third with Alzheimer’s disease, schizophrenia, and CKD had personal funds accounts, but the facility could not show that required statements were sent to the proper contacts. The DSS said statements were supposed to be mailed for cognitively impaired residents, but documentation was missing and one resident’s rep said they never received any statements.
Personal fund accounting was not properly documented for four residents whose account statements listed $50 and $75 deposits as cash receipts instead of identifying the source of the funds. An R resident also voiced concerns about access to money and knowing what was in the account, and the BOM confirmed the deposits were entered this way and said she was not aware all deposits needed to specify what they were.
Failure to Provide Quarterly Resident Trust Fund Statements and Accurately Account for Resident Funds
Penalty
Summary
The facility failed to provide quarterly resident trust fund statements for three residents with active resident fund accounts, identified in the facility trust fund account as Residents R12, R23, and R48. Review of facility business records and resident records did not show evidence that quarterly statements were provided to the residents or their representatives. During interviews, the Revenue Accounting Manager and the Assistant Business Office Manager confirmed that quarter one statements were not sent out and that the facility could not provide documented evidence for the previous quarters as well. The facility also failed to accurately account for Resident R48's personal funds. Resident R48 was admitted to the facility on [DATE], and review of the resident fund statement showed the facility received one payment on 4/17/26. On 5/13/26, the resident fund account reflected only one month's worth of the allotted money, although the Assistant Business Office Manager stated the payment represented a lump sum covering the resident's stay from September 2025 through April 2026. The Assistant Business Office Manager confirmed that the facility should have transferred eight months of monthly allowance into the account and that the facility failed to have an accurate resident personal fund statement for Resident R48.
Resident Funds Were Not Properly Managed or Accounted For
Penalty
Summary
The facility failed to appropriately manage a resident’s personal funds that were deposited with the nursing home. The resident was admitted with diagnoses including acute respiratory failure with hypoxia, HTN, and type II DM, and had a BIMS score of 15 indicating he was alert and oriented to person, place, and time. The resident was dependent on staff for ADLs and had a lower extremity impairment on one side. The care plan identified the resident as needing assistance with ADLs and maintaining involvement as desired. The resident opened a resident funded account and had a monthly SSA benefit payment of $1,335.00, with a designated allowance of $75.00. Review of the resident fund account records showed a current balance of $0.08 and quarterly statements that reflected limited activity, including cash credits of $600.00 and care cost payment debits of $600.00, with no other activity besides interest credits. The ODM eligibility verification form showed patient liability amounts of $402.00 for October 2025, $1,249.00 for November and December 2025, and $1,260.00 from January 2026 through June 2026. The BOM stated the facility had difficulty getting the resident’s RP to make payments toward patient liability. She reported that starting in April 2026 she obtained the resident’s bank card and made monthly ATM cash withdrawals totaling approximately $1,260.00 from a shared bank account for the resident and the RP, then converted the cash into cashier’s checks and deposited them into the facility’s designated account to apply to patient liability and/or care costs. She stated there was no documentation or written authorization allowing her to use the bank card, withdraw cash, obtain cashier’s checks, or deposit the funds into the facility account instead of the resident’s personal account, and she could not verify from bank statements that only the withdrawn amounts were taken or that the resident received the monthly $75.00 allowance. The facility policy required separate accounting for each resident’s funds, receipts and signatures for every transaction, documentation of all revenues and expenses, and that resident funds not be commingled with operating funds.
Resident Trust Petty Cash Not Reconciled
Penalty
Summary
The facility failed to maintain a system to safeguard resident trust petty cash by commingling money from other sources with resident trust petty cash and by failing to reconcile the resident trust petty cash account. During observation of the resident petty cash box and review of the petty cash log, Administrative Assistant E counted $474.50 in resident trust petty cash, while the log showed receipts totaling $435.38. The available cash and receipts did not reconcile to the expected petty cash balance of $600, resulting in a $309.88 discrepancy. During interview, Administrative Assistant E stated that families sometimes gave money to the front desk for family meal tickets instead of going through the business office, which caused a discrepancy with the resident trust petty cash. He/She also said recent events with more visitors likely caused the cash box balance to be off, and that some cash from the box had been given to the front desk to have on hand to give change to residents when needed. The facility kept $600 on hand in the resident trust petty cash, used a paper log sheet and receipts to track resident money, and the business office reconciled the account periodically and replenished the box. The Administrator, DON, and ADON stated they would expect the resident petty cash to be balanced and not commingled with other sources of money.
Failure to Provide Quarterly Resident Financial Statements
Penalty
Summary
The facility failed to ensure that the individual financial record was provided quarterly and upon request for one sampled resident whose personal money was deposited with the nursing home. Resident 1 was originally admitted and later readmitted to the facility, and had diagnoses including encephalopathy, schizophrenia, and anxiety disorder. The resident's H&P stated the resident could make needs known but could not make medical decisions, and the MDS indicated the resident could understand and be understood by others, had moderately impaired cognition, used a wheelchair, and required supervision for activities of daily living and mobility. During a concurrent interview and record review, the Business Office reviewed Resident 1's Resident Fund Management Service form and stated the facility had established a Resident Fund Trust Account for the resident and had deposited the resident's Social Security checks into the facility's bank account since February 2026. The BO stated the resident was not informed about these deposits and had not been provided quarterly financial statements. The DON stated the resident's primary physician should have participated in the Interdepartmental Team meeting to determine the resident's ability to make financial decisions and co-sign the Resident Fund Management Services document, and the BO should have ensured the resident signed an Appointment of Representative to Manage Personal Funds confirming agreement for the facility to manage the Social Security funds.
Failure to Provide Quarterly Personal Funds Statements
Penalty
Summary
The facility failed to ensure that residents or their designated representatives received quarterly personal funds account statements for residents whose money was deposited with the nursing home. Record review and interviews showed that the facility could not provide documentation that quarterly statements were given to the designated representatives of Residents #74 and #101 for the quarters ending 06/30/2025, 09/30/2025, 12/31/2025, and 03/31/2026, and to the designated representative of Resident #15 for the quarters ending 09/30/2025 and 12/31/2025. Resident #101 had diagnoses including dementia, Type 2 diabetes, and epilepsy. The Minimum Data Set dated 03/25/2026 documented severe cognitive impairment and indicated that family involvement in care discussions was very important. The resident face sheet identified the resident's designated representative as the first contact and next of kin. During interview, the designated representative stated they were unaware the resident maintained a personal funds account at the facility and had never received quarterly account statements. Resident #15 had diagnoses including Alzheimer's disease, dysphagia following a cerebral infarction, and bipolar disorder, and the Minimum Data Set documented severe cognitive impairment. Resident #74 had diagnoses including Alzheimer's disease, schizophrenia, and severe chronic kidney disease, and the Minimum Data Set documented severe cognitive impairment and inability to report preferences related to clothing choice, family involvement in care discussions, and care of personal belongings. The Director of Social Services stated they were responsible for providing quarterly statements and believed statements had been mailed for Residents #15 and #74, but could not provide documentation verifying they were sent; they also stated quarterly statements were not mailed to Resident #101's designated representative because no mailing address was on file. The Administrator stated the Director of Social Services was responsible for mailing quarterly statements to the resident's designated primary contact and documenting compliance by retaining a photocopy of the dated mailing envelope.
Personal Fund Deposits Not Properly Documented
Penalty
Summary
Properly hold, secure, and manage each resident's personal money which is deposited with the nursing home was not maintained for four of five active resident accounts reviewed. Record review showed that Residents #9, #26, #34, and #38 each had personal fund statements listing $50 and $75 credits as cash receipts rather than identifying what the deposits were. The personal fund statement for Resident #34 also showed the same issue, and during interview the resident stated concerns about access to money and knowing about the money in her account. The Business Office Manager confirmed that these residents had deposits made into their personal funds accounts and labeled them as cash receipts, and stated she was not aware all deposits should specify what they were.
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