A. Participant Ledger File -- A ledger account must be maintained for each participant in the resident trust fund. This record must reflect all activity (deposits and withdrawals) involving the resident. Page 5-6 identifies the required detail for each file. Separate balances must be maintained for amounts deposited into separate accounts. Do not destroy completed or closed files, as each one is a permanent record needed to document the activity in the residents account. Facility must ensure that account balances do not go negative. Negative balances will be made up by the facility.

B. Collective Resident Bank Account (Checking) -- The collective bank account is a single account for resident trust fund money. The records in the participant ledger file keep track of each resident, therefore separate resident checking accounts are not necessary. This account must be separate and distinct from all nursing home accounts. All checks written on this account must be for resident expenditures only. A register of all account activity must be maintained. The balance per register and balance per bank statement should be reconciled on the bank statement and retained. Entries on the register should reference the resident and the source. If this account is interest bearing, the facility must establish an equitable method for distributing interest earned on the account to the residents participating in the resident trust fund. Checks written on this account must then be posted to the appropriate participant ledger account.

C. Interest Bearing Accounts (Savings) (applicable to Nursing Facility class only) -- Federal regulation requires that resident funds in excess of current needs be deposited in an interest bearing account. When a participant's balance in the collective checking account reaches a balance of $50.00, any additional funds must be placed in an interest bearing account. For simplicity, we recommend that a separate account be opened for each resident, but this is not required. If the facility decides to open a collective interest bearing account, the facility must maintain balances for each participant in their participant ledger file and must establish an equitable method for distributing interest earned on the account.

D. Cash Maintained on Hand (Petty Cash) -- To accommodate the residents needs for cash money, the facility must maintain a cash box or drawer containing petty cash. The petty cash fund should be an imprest system in that the fund always contains cash or petty cash journal entries (receipts) totaling the approved petty cash balance. The petty cash fund is established by writing a check on the residents' collective bank account, cashing it and placing the proceeds in the cash box or drawer. The size of the petty cash fund depends on the number of participants, their daily cash needs and the frequency that the fund can be replenished. As cash is distributed to participants from the petty cash fund, the transaction must be recorded on a petty cash journal,. The participant should sign the journal verifying that a distribution was made. Distribution to incompetent participants must be witnessed by a staff member other than the person managing the fund. As necessary, the fund should be replenished back to the original balance of the fund. At the point that the fund is replenished, petty cash activity as recorded in the petty cash journal should be posted to the participant's ledger file. Please remember that this petty cash fund is for participating residents only and should not be used for any other purpose. Petty cash funds should be kept secure at all times.

E. Reconciliation of All Funds -- The facility must reconcile all account balances per the participant ledger file to all petty cash and bank account balances on a monthly basis. Any shortage identified must be made up by the facility.

F. Receipt File -- Receipts must be retained for any distribution made from any resident funds account. All receipts must be documented with the name of the resident, date of the receipt, amount and what the money was spent for. A folder must be maintained for each participant in the fund in which to put his receipts. The petty cash journal will serve as the receipt for cash money distributed to participants. The petty cash journal must be retained for this purpose.

G. Procedures for creating a participant ledger file:

H. Procedures for checking a participant out of the Trust Fund Account: