Due to the nature of money exchanging hands between your residents and you (your facility) it is prudent of you to keep pristine records regarding your financial affairs. You must also make the choice as to whether or not you will be willing to handle resident funds on behalf of them, which adds even more pressure for your financial office to ensure you are fiscally responsible. Check out the regulation below regarding resident finances provided by Maryland OHCQ:
.38 Protection of a Resident’s Personal Funds.
A. A resident may:
(1) Manage the resident’s financial affairs; or
(2) Consistent with State law, choose any individual who is willing and able to handle the resident’s financial affairs.
B. An assisted living program may refuse to handle a resident’s financial affairs.
C. An assisted living program may not manage a resident’s funds without an express written request from the:
(1) Resident; or
(2) Resident’s agent.
D. Management of Personal Funds. On the written authorization of a resident or agent, an assisted living program shall hold, safeguard, manage, and account for the resident’s personal funds as specified in this regulation.
E. Safeguards Required.
(1) Each assisted living program shall develop adequate safeguards to secure the personal funds of a resident
that are entrusted to the assisted living program.
(2) An assisted living program to which $300 or more of a resident’s personal funds is entrusted shall deposit
the money in an interest-bearing bank account. If an assisted living program is entrusted with a resident’s personal
funds that are less than $300, the assisted living program may deposit the funds in a bank account.
(3) An assisted living program that manages residents’ personal funds, regardless of the amount managed, shall
maintain on behalf of the residents:
(a) A bond, with the State as obligee, equal to the average monthly balance of all the funds held or managed
by the licensee for the residents of the facility;
(b) A letter of credit, with the State as obligee, equal to the average monthly balance of all the funds held or
managed by the licensee for the residents of the facility; or(c) Net assets equal to the average monthly balance of all the funds held or managed by the licensee for the
residents of the facility.
(4) The bond, letter of credit, or list of assets shall be kept at the assisted living program for inspection by the
Department or its designee.
F. Establishment of Resident Accounts.
(1) When an assisted living program manages a resident’s financial affairs, the assisted living program shall:
(a) Establish and maintain a system that ensures a full, complete, and separate accounting, in accordance with
generally accepted accounting principles, of a resident’s personal funds entrusted to the assisted living program; and
(b) Keep the accounts of its residents separate from the accounts of the facility.
(2) Bank accounts opened for residents’ personal funds by an assisted living program shall have minimal or no
(3) Any interest earned on the bank accounts shall accrue to the resident.
(4) Any fees charged by the bank for the maintenance of the account shall be paid by the resident.
G. Records of Resident Personal Funds. For all resident funds entrusted to an assisted living program, the assisted
living program shall:
(1) Maintain an individual record for each resident, which includes the following information for each
(a) The date of the transaction;
(b) The type of transaction, whether it is a deposit, withdrawal, or any other transaction; and
(c) The balance of funds after the completion of the transaction;
(2) Make available for inspection by the resident, or, when applicable, the resident’s agent, a statement of the
resident’s account; and
(3) Make available at the assisted living program, for audit by the Department or its designee, records
pertaining to each resident’s personal funds, including the written authorization required by §D of this regulation.
H. Fire and Theft Coverage. For all resident funds entrusted to an assisted living program, the assisted living
program shall establish and maintain adequate fire and theft coverage to protect a resident’s funds that are on the
premises of the assisting living program.
I. Availability of Personal Funds.
(1) A resident, or if applicable, the resident’s legally authorized representative, has the right to access funds
entrusted to the assisted living program:
(a) During normal business hours, if the funds are held within the facility; or
(b) Within 3 banking days, if a bank, the State, or a county or municipal treasurer holds the money.(2) If an assisted living program transfers or discharges a resident, the assisted living program shall:
(a) Request and follow the resident’s written instructions for transferring the resident’s funds;
(b) Return, upon the resident’s or, when applicable, the resident’s agent’s demand, the resident’s money that
the assisted living program has in its possession and have the resident or agent sign a receipt for the money; or
(c) Make available to the resident or the resident’s agent, within 3 banking days, the resident’s money which
is held in an account with a bank, the State, or county or municipal treasurer.
J. Ownership Change.
(1) If the ownership of an assisted living program changes, the previous owner, with the approval of each
resident shall give the new owner a certified written audit of all funds that residents have entrusted to the assisted
(2) The new owner shall give to the previous owner a signed receipt acknowledging the receipt of the accounts.
(3) The new owner shall comply with the safeguard requirements of §E of this regulation.
(4) If the resident wants the new owner to hold, safeguard, manage, or account for the resident’s personal funds,
then a new written authorization in compliance with §D of this regulation shall be executed.
K. Resident Liability. A resident is not liable for any act or omission of the assisted living program concerning the
finances of the assisted living program or the resident.
.39 Misuse of Resident’s Funds.
A. A person may not misappropriate a resident’s assets or income, including spending the resident’s assets or
income against or without the consent of the resident or, if the resident is unable to consent, the resident’s agent.
B. An individual who witnessed, or otherwise has reason to believe, that there has been an abuse of a resident’s
funds shall make a complaint within 24 hours to the:
(1) Appropriate law enforcement agency;
(2) Office of Health Care Quality of the Department;
(3) The Department of Aging or the local area agency on aging; or
(4) Local offices of the Department of Human Services or Adult Protective Services.
C. The agency that investigates the abuse of a resident’s funds shall send a report to any other agency listed under
§B of this regulation that participates in the licensure or subsidizes the care of the resident. Any agency may make a
referral to the State’s Attorney’s Office, or to the Medicaid Fraud Control Unit of the Criminal Division of the Office
of the Attorney General, if appropriate.
Pro Tip: Keep track of any funds or property given to you by the resident. You do not want to be accused of theft
or “misplacing” these items when residents ask for them. Be sure to give them receipt of everything
purchased if they are entrusting you with their money.