STATE OF MICHIGAN DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING

RICK SNYDER GOVERNOR

SHELLY EDGERTON DIRECTOR

May 24, 2016

David Schnoor Spectrum Community Services P.O. Box 1251 Benton Harbor, MI 49023

RE: License #: AM110091925 Investigation #: 2016A0461016 Eau Claire Residence

Dear Mr. Schnoor: Attached is the Special Investigation Report for the above referenced facility. Due to the violations identified in the report, a written corrective action plan is required. The corrective action plan is due 15 days from the date of this letter and must include the following: • • • • •

How compliance with each rule will be achieved. Who is directly responsible for implementing the corrective action for each violation. Specific time frames for each violation as to when the correction will be completed or implemented. How continuing compliance will be maintained once compliance is achieved. The signature of the responsible party and a date.

If you desire technical assistance in addressing these issues, please feel free to contact me. In any event, the corrective action plan is due within 15 days. Failure to submit an acceptable corrective action plan will result in disciplinary action.

611 W. OTTAWA • P.O. BOX 30664 • LANSING, MICHIGAN 48909 www.michigan.gov/lara • 517-335-1980

Please review the enclosed documentation for accuracy and contact me with any questions. In the event that I am not available and you need to speak to someone immediately, please contact the local office at (517) 284-9720. Please note that violations of any licensing rules are also violations of the MSA and your contract. Sincerely,

Karen Hodge, Licensing Consultant Bureau of Community and Health Systems 401 Eighth Street P.O. Box 1407 Benton Harbor, MI 49023 (269) 363-1742 enclosure

MICHIGAN DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS BUREAU OF COMMUNITY AND HEALTH SYSTEMS SPECIAL INVESTIGATION REPORT

I. IDENTIFYING INFORMATION License #:

AM110091925

Investigation #:

2016A0461016

Complaint Receipt Date:

03/21/2016

Investigation Initiation Date:

03/21/2016

Report Due Date:

05/20/2016

Licensee Name:

Spectrum Community Services

Licensee Address:

P.O. Box 1251 Benton Harbor, MI 49023

Licensee Telephone #:

(269) 927-3472

Administrator:

David Schnoor

Licensee Designee:

David Schnoor

Name of Facility:

Eau Claire Residence

Facility Address:

2860 M-140 Eau Claire, MI 49111

Facility Telephone #:

(269) 944-1927

Original Issuance Date:

05/19/2000

License Status:

REGULAR

Effective Date:

06/12/2015

Expiration Date:

06/11/2017

Capacity:

12

Program Type:

MENTALLY ILL

1

II.

ALLEGATION(S)

Residents’ money has not been deposited into their accounts; over $3,000.00 unaccounted for. Residents’ money has been spent without receipts matching for purchases appropriate to the resident; food stamp purchases were made without being appropriately accounted for in the home. Additional Findings

III.

Violation Established? Yes

Yes

METHODOLOGY 03/21/2016

Special Investigation Intake 2016A0461016

03/21/2016

Referral - Protective Services

03/21/2016

Special Investigation Initiated - Telephone APS, Detective Easton, Max Warriner, Office of Inspector General

03/23/2016

Contact - Face to Face Basil Scott, Joyce Divis, Tamara Yore, Julie King, Dawn Osgood, Cathy Easton

03/29/2016

Contact - Telephone call made Joyce Divis

03/29/2016

Contact - Telephone call made Tamara Yore

05/19/2016

Inspection Completed-BCAL Sub. Compliance

05/24/2016

Exit Conference – by telephone David Schnoor and Joyce Divis

ALLEGATION: Residents’ money has not been deposited into their accounts; over $3,000.00 unaccounted for. Residents’ money has been spent without receipts matching for purchases appropriate to the resident; food stamp purchases were made without being appropriately accounted for in the home. INVESTIGATION: On March 21, 2016, I received a call from Basil Scott, Recipient Rights Officer for Riverwood Mental Health Authority. He told me he had learned that resident funds at Eau Claire Residence had been co-mingled, all cash was put together in a cash pouch, and there were numerous problems with how resident 2

funds had been recorded and tracked. Mr. Scott said one of the biggest issues was that checks for resident spending money were being cashed but not given to residents and not showing up on the Resident Funds Part II sheet. Further, he said groceries purchased with resident food stamps were not being verified as being purchased and brought into the home for resident use. On March 21, 2016 I made a referral to Adult Protective Services regarding the misuse of resident funds. I also contacted the local supervisor for the Office of Inspector General and reported the potential misuse of resident food stamps. I contacted Detective/Sargent Cathy Easton of the Berrien County Sheriff’s Department to inform law enforcement of the potential for a criminal matter. On March 22, 2016, I spoke with Joyce Divis who is an Associate Director for licensee Spectrum Community Services (Spectrum). Ms. Divis explained that Resident A had passed away in February, and the benefits coordinator for their office, Tamara Yore, had been trying to get the remaining cash and all moneyrelated materials from Heide Tharp, home manager, since shortly after Resident A died. Ms. Divis said another resident then passed away and shortly after that, Ms. Yore was trying to get the financial materials regarding this resident as well. Ms. Yore finally went out to the home to meet with Ms. Tharp and Ms. Tharp pulled out a zippered bag and dumped out a bunch of cash. Ms. Tharp told Ms. Yore it was the cash for all the residents. Ms. Yore collected whatever receipts, Resident Funds Part II forms and cash that was at the home and returned to her office to audit the funds. Ms. Divis told me she had determined by working with Spectrum’s bank there had been a check for $2500.00 for a resident that was missing and over $300.00 in cash for a resident that was missing. Ms. Divis told me Ms. Tharp had been suspended the previous week when discrepancies and problems were found with resident funds. Ms. Divis said Ms. Tharp texted her saying she had suddenly remembered where she had placed a $2500.00 check for Resident K, and she had suddenly discovered $300.00 in her work bag that she knew belonged to a resident. On March 23, 2016, I met with Basil Scott, Recipient Rights Officer, Joyce Divis and Tamara Yore, Spectrum, Detective/Sargent Easton, Berrien County Sheriff’s Department, Julie King, Adult Protective Services (APS), and Dawn Osgood, Office of Inspector General (OIG). We reviewed documents and information that Ms. Divis and Ms. Yore had obtained from the home and from Ms. Tharp pertaining to the use and distribution of resident funds. Numerous problems related to the handling of resident funds were discovered, which I will summarize, by resident. Resident A: Resident A’s food stamps were utilized by Heide Tharp at Wal-Mart on 01-25-16 for a total of $226.00 with no documentation that the purchased food was brought into the home as it was not verified by a witness per company policy. Spectrum policy is that one staff person purchases the food and another staff person witnesses and documents that the food brought into the home matches the receipt. A second questionable incidence occurred on February 9, 201,6 for $32.40 when the food was not observed nor documented as coming into the home. In addition, the

3

food purchased did not appear to correspond to food quantities or type for 12 residents. Ms. Divis reviewed Resident A’s belongings at Eau Claire home and compared items to the receipts available for several shopping dates. Ms. Divis found that items showing as purchased by Resident A were not appropriate for her due to the sizes and types of items; for example several items were size extra-small but Resident A wore size 20 or 22; several pairs of shoes were the wrong size and pajama sets were purchased but Resident A preferred nightgowns and the purchased pajamas were too small for her. These items total $278.94. Purchases made at Kohl’s generated Kohl’s cash, which is available to be used in-store for a limited time after the original purchase. $20.00 in Kohl’s cash was generated and Ms. Divis confirmed this was redeemed, but not for Resident A’s benefit. Resident B: An entry was made on the Resident Funds II sheet indicating an expenditure had been made at Wal-Mart on 10-29-15 totaling $18.58 but there is no receipt to verify the purchase. Resident C: On March 7, 2016, a deduction on the Resident Funds Part II form was made in the amount of $108.22 from Admiral but there was no receipt verifying a purchase made on the resident’s behalf. There are nine entries between July 2014 and March 2016 on the Resident Funds Part II form which state “cash to” Resident C, but there is no corresponding signature from Resident C verifying he received the cash, totaling $59.75. The Resident Funds Part II form recorded the balance of cash on hand for Resident C was $277.74 beginning September 2015 with several deposits recorded and a final balance in March 2016 of $850.59. On February 5, 2016, there was a food stamp usage on Resident C’s bridge card, used at Lowery’s, a local meat and grocery store, on 02-05-16 totaling $180.23. The home manager, Heide Tharp, signed that the food was brought in to the home and there is a signature for Gail Osei as the staff person verifying the purchase. I reviewed a copy of Ms. Osei’s time card and she did not work on February 5, 2016, and therefore would not have been able to verify that the food brought into the home matched the receipt. In addition, the signature on the food stamp voucher is very similar to that of Heidi Tharp. Resident D: No known financial discrepancies. Resident E: Resident E had 6 instances between June 17, 2015, and February 11, 2016, when the Resident Funds Part II form indicate she was given cash. None of these instances had a signature from Resident E or an authorized representative to support that she received the cash. The amount totals $290.00. On January 12, 2016, Resident E’s food stamp card was used to purchase household food at Family Fare, totaling $177.02. The food stamp receipt voucher indicates staff member J. Dale signed the receipt verifying that the food brought into the home matched the receipt. J. Dale did not have a time card for January 12, 2016, and did not work. Further, the signature on the voucher looks quite similar to that of Heide Tharp, who also signed the voucher and shopped for the food. There are Kohl’s purchases attributed to Resident E on 10-09-15 for $160.03 and 11-08-15 for $122.41. The

4

items purchased do not all match Resident E’s size and style, for example, a size 10 sweater was on the receipt but Ms. Divis told me Resident E wears at least a size 3XL. $30.00 in Kohl’s cash was generated and Ms. Divis confirmed this was redeemed, but not for Resident E’s benefit. Purchases were made at Wal-Mart on 12-19-15 and the amount is subtracted from the Resident Funds Part II form in the amount of $38.26. The items purchased included two pair of pants size medium, one pair of pants size large, one 2X top, and two XL crew tops. According to Ms. Divis, these items were not found in Resident E’s personal belongings nor would these fit her since she wears clothing that is at least a size XXXL. Another receipt, also from Wal-Mart, dated 12-19-15 but one minute after the above purchase, was also subtracted from Resident E’s funds. The receipt indicates this was in the amount of $41.76 and included two pairs of capris and two fleece tops. Ms. Divis interviewed Resident E who said she recalls getting some new clothes from her sister after she had been hospitalized. She only recalls getting some sweaters, and panties and a pair of slippers for Christmas from Ms. Tharp, no pants. Resident E told Ms. Divis she received five or six pair of panties for Christmas but they were too small for her. On the receipt from Kohl’s dated 10-09-15 there were three 3-packs of panties. There are a total of eleven pairs of pants itemized on the receipts dating from 10-09-15 through 12-19-15 that were likely not for Resident E. Resident F: From 10-03-14 to 03-10-16 there were eleven entries made on the Resident Funds Part II form indicating cash was given to Resident F but Resident F nor her designated representative ever signed the form verifying the cash was received. The amount of unverified cash is $217.36. There were seven entries made indicating funds were spent at a variety of stores including Admiral, Kohl’s and Wal-Mart, however there were no receipts for the purchases. The amount of unverified purchases is $282.27. The Resident Funds Part II is unorganized making it more difficult to follow the deposits and expenditures; many of the entries were not done chronologically. On January 20, 2016 $221.00 of Resident F’s food stamps were used and only Heide Tharp signed the receipt voucher; no other staff verified that the food brought into the home matched the food on the receipt. On January 6, 2016, $184.43 of Resident F’s food stamps were used and there was no verification by a second staff member that the food brought into the home matched the receipt. Resident G: No known discrepancies. Resident H: According to Tamara Yore, benefits coordinator for Spectrum, there were two checks for Resident H that were cashed by Heide Tharp, for $200.00 each, that were never entered into Resident H’s account, according to the Resident Funds Part II and verified with Spectrum’s bank. These checks were dated 06-11-15 and 08-15-14, totaling $400.00. On 03-11-16 there was an unexplained deduction from the Resident Funds Part II account, reducing the total by $41.37. There were four separate expenditures entered on the Resident Funds Part II form with corresponding deductions for shopping at Admiral without a receipt verifying what was purchased. These expenditures total $374.74. The entries on four pages reviewed of the Resident Funds Part II form are not chronological, making it difficult

5

to accurately reconcile the account. There were multiple time periods when Resident H’s account was over $200.00 for months at a time with the highest balance being $600.68. Ms. Divis matched Resident H’s personal belongings with receipts for the purchase of clothing and other personal items. She found a Kohl’s receipt entered on his Resident Funds Part II in the amount of $206.07 and dated November 8, 2015. The receipt contained a misses Adidas pants size medium, a Campus Heritage brand Notre Dame Hoodie size XXL and Notre Dame jogger pants size small. A second Kohl’s receipt dated December 19, 2015 in the amount of $149.99 included a misses Adidas basketball pants size medium, women’s Adidas soccer pants size XL, a men’s Adidas Notre Dame logo fleece size XL, and a men’s Champion brand orange jogger pants size L. None of these items were found in Resident H’s personal belongings. In addition, Kohl’s cash in the amount of $70.00 was earned for the purchases made on 12-19-15 and which were redeemed on 1228-15 and 01-02-16 but there is no evidence they were used for purchases for Resident H. Resident I: No disputed financial transactions. Resident J: There was a check in the amount of $40.00 issued on behalf of Resident J on 08-27-15 which was cashed by Heide Tharp and never entered onto the Resident Funds Part II form. There were 13 entries listed on the Resident Funds Part II form indicating cash to Resident J which were unsigned and unverified, totaling $343.80. The cash balance for Resident J was $225.17 on January 7, 2016 and remained over $200.00 through February 2016. However, several entries were not made in chronological order, making it difficult to determine the correct amount of funds on hand. Resident K: There were receipts from Meijer, Home Depot, Kohl’s and Hobby Lobby, totaling $1865.18 which had numerous questionable expenditures. A Kohl’s receipt in the amount of $324.30 and dated October 8, 2015 listed a grill/waffler, a yogurt maker, an electric razor and a blender/food processor. Ms. Divis found appliances that may match the boxes in the home’s kitchen cabinets but Resident K does not require his food to be blended or pureed, nor does he use the yogurt maker or the waffler. The razor was not found anywhere in the home, staff told Ms. Divis they had not seen him use a razor and Resident K has a full beard and does not appear to shave. A Kohl’s receipt in the amount of $138.83 and dated for October 9, 2015 contained a shawl cardigan and a sweater which were not found in Resident K’s personal belongings. A Kohl’s receipt in the amount of $105.68 dated December 4, 2015 was for games/toys and a wall clock which were not found in Resident K’s personal belongings or anywhere in the home. Another receipt from Hobby Lobby dated November 24, 2015 in the amount of $27.81 was entered on the Resident Funds Part II form and lists home accents which were not found in his personal belongings. $295.00 in Kohl’s cash was generated from the above purchases and Ms. Divis confirmed this was all redeemed, but not for Resident K’s benefit. According to Tamara Yore, there were two checks cashed by Heide Tharp and not recorded on the Resident Funds Part II form, $100.00 each, totaling $200.00. There

6

was also a check for $2500.00 that was written with an itemized plan agreed to with Resident K’s payee to purchase a large TV, a dresser, and outdoor furniture. Ms. Divis was able to find the check stub for this check, cash in the amount of $1515.56, and several receipts. A Weber grill was purchased for $469.00 which was located in the home, and two propane tanks. Other items listed on the receipt and unaccounted for were a tool set, grill mitt, and grill cover. On March 16, 2016 food stamps for Resident K in the amount of $176.52 were utilized at Wal-Mart, the voucher is signed by Heide Tharp, but no additional staff member verified the purchase. Resident L: An expenditure for Admiral was deducted on 12-16-14 from the Resident Funds Part II form for Resident L in the amount of $103.66 with no accompanying receipt. There were ten entries labeled “cash” to Resident L without a signature from him or his designated representative. These deductions totaled $77.00. On January 20, 2016 $210.90 in food stamps were used at Lowery’s with a voucher signed by Heide Tharp and signed as verified by Stephanie Pulliam. The purchase was made at 08:27am and Ms. Pulliam’s time card verifies she did not begin work until 3:00pm that day and therefore could not have accurately verified the purchases. A receipt for $74.85 was entered into the Resident Funds Part II form dated either 11-or-12-19-15 and listed 21 “textiles”. Ms. Divis inspected Resident L’s clothing and determined he did not have as many items of clothing as what was listed on the receipt. There was also a receipt for Wal-Mart from 12-23-14 for $65.95 which had shoes and other items which Ms. Divis could not find. There was a pair of shoes on this receipt in size 10, however, Resident L wears a size 13 shoe and Ms. Divis stated another staff member purchased a pair of shoes for Resident L out of her own money because he did not have shoes to wear. Resident M had a receipt in the amount of $70.61 dated October 8, 2015 from Kohl’s deducted from her Resident Funds Part II form. Ms. Divis told me three of four items were not found in her belongings and none of the items were the right size or style for Resident M. The second receipt is in the amount of $49.82 and dated October 9, 2015 and listed a hat for $28.80 which was not found in her belongings nor had she been seen wearing such a hat. Slippers in the amount of $18.20 were on the receipt and she preferred to wear slippers most of the time. The third receipt is in the amount of $100.82 dated December 19, 2015 and lists items that could not be found and were items which Resident M did not wear. $30.00 in Kohl’s cash was generated and Ms. Divis confirmed this was redeemed, but there is no evidence it was for Resident M’s benefit. Resident N had two checks for $40.00 each that were cashed by Heide Tharp but not recorded on the Resident Funds Part II form. A deduction of $108.03 for a purchase at Kohl’s was made on 11-08-15 with no accompanying receipt. Resident O had a check for $194.71 and a check for $50.00 that were cashed by Heide Tharp and not recorded on the Resident Funds Part II form.

7

According to Ms. King, she substantiated exploitation for the residents identified above due to the misuse of resident funds. There continues to be an open OIG and criminal investigation. APPLICABLE RULE R 400.14315 Handling of resident funds and valuables. (2) The care of any resident funds and valuables that have been accepted by a licensee for safekeeping shall be treated by the licensee as a trust obligation. (5) All resident funds, which includes bank accounts, shall be kept separate and apart from all funds and monies of the licensee. Interest and dividends earned on resident funds shall be credited to the resident. Payments for care for the current month may be used by the licensee for operating expenses. (8) All resident fund transactions shall require the signature of the resident or the resident's designated representative and the licensee or prior written approval from the resident or the resident's designated representative. (10) A licensee, administrator, direct care staff, other employees, volunteers under the direction of the licensee, and members of their families shall not accept, take, or borrow money or valuables from a resident, even with the consent of the resident. ANALYSIS:

Multiple checks for residents’ personal spending were cashed by a staff member and were not recorded or deposited in the residents’ funds. Multiple purchases were made and funds deducted from resident’s personal spending on the Resident Funds Part II form without receipts and without the consent or involvement of the resident. Multiple purchases for residents were for items that either could not be located or were totally inappropriate, such as the wrong size, for a given resident. Multiple entries were made on Resident Funds Part II forms indicating cash was given to residents without a resident signature or some alternative form of verification. Food stamps were used for the purchase of food for the home on resident’s individual accounts but there was no verification that the food was actually brought into the home as required by Spectrum policy.

CONCLUSION:

VIOLATION ESTABLISHED

8

ADDITIONAL FINDINGS: As indicated above, multiple residents had a variety of funds and benefits misused, including purchases made with their personal spending money that was not for them, food stamp purchases that were made without verification according to the licensee’s policy, checks being cashed and not deposited into the residents’ accounts, and no verification that cash was given to residents as recorded on the Resident Funds Part II form. According to documents, receipts, and the Resident Funds Part II forms, discrepancies, poor documentation, and inappropriate use of resident funds has been going on for well over a year without being discovered or corrected by the licensee. According to interviews with Ms. Divis and Ms. Yore, there is supposed to be ongoing and regular auditing of the resident’s accounts by the benefits coordinator, which had not been done for at least a year. Further, there was a clear process for tracking resident checks and matching deposits through the use of the Resident Funds Part II forms. A procedure was in place to review and verify purchases made on residents’ behalf which was not being done, or not being done properly as purchases were made without resident involvement and many purchases were inappropriate and clearly not for the use of the resident. Spectrum had a policy in place for the use of food stamps to verify that food brought into the home matched the receipts and this policy was not followed. APPLICABLE RULE R 400.14303 Resident care; licensee responsibilities. (2) A licensee shall provide supervision, protection, and personal care as defined in the act and as specified in the resident's written assessment plan. ANALYSIS:

Purchases made utilizing resident funds were not appropriate for a number of residents and many of the items were not found in the possession of residents, dating back to more than a year ago. Multiple entries were found on Resident Funds Part II forms indicating cash was being given to residents without a signature or some other form of verification dating back over a year. Checks for residents were cashed by a staff member and never entered into the resident’s accounts going back over a year. Cash for residents was co-mingled and found in various locations in the home and was not kept separate and apart for each resident. Resident Funds Part II forms were not done chronologically or accurately. Food stamp purchases were not properly verified, dating back at least a year. Purchases for residents were frequently being made without the resident’s involvement or knowledge. The licensee failed to follow their own policies and procedures to insure resident funds were

9

appropriately utilized and accurately recorded which allowed a staff member to exploit residents’ funds and benefits. CONCLUSION:

IV.

VIOLATION ESTABLISHED

RECOMMENDATION I recommend upon receipt of an acceptable Corrective Action Plan, this Adult Foster Care Medium Group Home continue on regular status.

05/20/2016 ________________________________________ Karen Hodge Date Licensing Consultant

Approved By: 5/23/16 ________________________________________ Betsy Montgomery Date Area Manager

10