The beginning of the year is an ideal time to review the manner by which the facility's Resident Trust or Personal Needs accounts are being managed. The Resident Trust is usually the most common way that an employee can embezzle as it is often the least regulated and monitored by LTC management. According to McKnight's Long Term Care News, the Office of the Inspector General (OIG) will increase its focus and review of the Resident Trust more carefully in the coming year. Best practice is to have appropriate checks and balances in place for the management of the Resident Trust in order to protect resident monies and to reduce facility exposure to citations and/or potential employee theft.

Suggestions to consider when reviewing your process would be to begin with obtaining a copy of the state and federal regulations that govern how the trust must be managed. The amount of the Personal Needs Allowance (PNA) and requirements for interest paid may be changing in your state in January. Take the following steps to help establish adequate checks and balances with all financial transactions:

1. Segregation of duties: avoid having just one staff member responsible for making and posting deposits, writing checks, distributing cash. Assign an administrator or someone in a management position to be the only one authorized as a signatory for resident checks.
2. Depending on the size of the facility and the level of activity in the trust, separate business office functions such as distributing cash and balancing the cash box.
3. If petty cash and resident banking are handled by front desk staff, Activity and/or Social Services staff, it is critical to balance the cash box to the daily receipts and activity.
4. Reconcile charges for Beauty Shop, Activity Department outings and miscellaneous expenses promptly so that residents and family members may have an accurate accounting of transactions and available balances.
5. Update trust management account information at the time of the transaction or minimally on a daily basis.
6. Reconcile deposit and withdrawal activity to the bank statement at least monthly. If able to access banking online check activation weekly.
7. Consider using a trust management software such as RFMS.

Resident Trust Fund statements must be provided as detailed in the guidelines for each state, most often requiring a quarterly statement be provided to residents with interest paid after a certain amount of funds is in the account. Having an outside person or entity reconcile the resident trust activity at the end of each month provides another layer of scrutiny, comparing the transactions posted against the transactions recorded on the bank statement. Thorough checks and balances will help to ensure that a facility is compliant in regards to managing resident funds.

***Update 3/14/14: The Ohio Department of Health, in consultation with the Ohio Department of Job and Family Services/Medicaid, has issued a revised document regarding resident funds which can be accessed here.