Dear Supported Living, Group Home and Group Training Home providers,
What’s New
An increase in fraud with client accounts recently occurred. One vulnerable area involves trust accounts. This communication offers guidelines to help protect client funds.
Background
Trust accounts are typically established when clients have expendable income.
When a provider assists with making deposits and requesting withdrawals from a trust account, a client may be vulnerable to exploitation if the provider is not able to verify that the money went into or out of the trust account.
What can you do?
Trust Accounts
For client protection, do the following monthly reconciliation and verification of bank accounts:
- Confirm checks written from a provider-managed checking account to the trust fund are cashed by the trust fund - with a copy of the canceled checks
- Retain copies of receipts provided to trust accounts for disbursements and purchases
- Check any funds sent from client accounts to trust account against trust account statement to ensure they are reflected as deposits
- Confirm client received funds, goods or services for each withdrawal reflected on trust fund statement
Individual Financial Plans
Be sure the client individual financial plans (IFP) demonstrate the financial responsibilities of the client, agency, representative payee, and guardian (if applicable) for all accounts. Trust funds are typically not considered to be provider-managed; however funds sent from or received into a provider-managed account must meet all WAC requirements.
Best Practices
The risk of fraud increases without appropriate oversight for financial transactions. To prevent fraud, Chapter 388-101D-0255 WAC, requires a second person verify reconciliations, and that must be done by a staff person who did not make or assist with the transactions. The agency staff completing the reconciliation or verification should understand the importance and intent of their review.
When a check is cashed or withdrawal occurs, verify funds were used for the intended purpose.
This can be done through:
- Receipts;
- Cancelled checks;
- Payment being reflected on the next bill (such as utility bills);
- Account statement (in the case of burial or trust accounts);
- The client’s confirmation of the transaction; and/or
- Visual observation of purchased goods and services.
An example where fraud has gone undetected for a period of time is when the staff made the transactions look legitimate, such as indicating that the payee is "name" and then writing the check for themselves.
Large purchases or those that seem out of character for the person should be confirmed by visual observation and entry on the inventory list of the property record. Ensure that someone who did not assist with the purchase is responsible for checking and updating the property record.
Refer to the Resource Guide for Managing Finances for People in Supported Living Programs for more information and an optional IFP template.
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