Philadelphia's Riverview Home, which primarily serves low-income senior citizens and those with mental disabilities, used more than $68,000 of residents' money to pay fines for violations generated by the institution, according to a report released Wednesday by City Controller Alan Butkovitz.
Butkovitz said the information came to light through a forensic investigation of Riverview Home residents' accounts, which are comprised largely of residents' Social Security and pension checks and are supposed to be used to pay for room and board, as well as personal items.
But the report found the Riverview Home, located at 7979 State Road in Holmesburg and managed by the city's Office of Supportive Housing, routinely took money from the accounts to pay for things like health insurance premiums, medical service providers, and welfare and fire drill violations.
In total, Butkovitz said $166,389 "questionable and improper payments" were uncovered during fiscal years 2011 and 2010, more than $68,000 of which was used to pay fines racked up by the senior home.
"These disbursements were highly questionable and should not have been paid from the account," Butkovitz said in a statement.
"It’s disheartening to find that residents’ monies were expended for services that may not have benefited Riverview operations for all the residents."
According to the report, Riverview management during fiscal year 2011 approved payments of more than $68,000 from the residents' accounts to pay fines to the Pennsylvania Department of Public Welfare.
Those included $50,000 in fines for repeated violations of fire drill regulations and $18,000 in fines for recurring violations related to incomplete medical records.
"These fines were a result of deficient operations by Riverview’s management," Butkovitz said.
"The payments should have been charged against the city’s general fund, not the residents’ personal accounts."
Butkovitz also found more than $67,000 in funds from the residents' accounts were used to pay health insurance premiums.
He said the investigation further identified a shortage of $12,970 in the residents' accounts, which he believes to be the result of poor recordkeeping of account transactions.
Of the total shortage, Butkovitz said $1,545 still remained unaccounted for by the investigation's end.
"Our findings suggest that procedures to ensure the prevention and detection of mistakes and theft of the funds were severely deficient," Butkovitz said.
He recommended OSH management arrange for an accountant to properly establish the residents' accounts in QuickBooks and provide fiscal staff with appropriate training.
He also suggested OSH create a memorandum of understanding with the city's finance office to define what direct payments from residents' accounts are allowed.
“It is essential to take immediate corrective action to prevent any further shortages,” Butkovitz said.
The Office of Supportive Housing said in a response to Butkovitz's investigation that Riverview staff will seek the advise of the city finance office in the future for the appropriate way to pay regulatory violations to the state Department of Public Welfare, as well as to purchase medical equipment and pay health insurance premiums.
Officials further noted Riverview purchased the latest version of QuickBooks in June 2013, and the software was fully implemented in August.