Complaint Investigation Report

On 03/25/2025, the Department received a complaint alleging that, “facility is in financial distress,” “licensee misrepresented their financial obligations under law,” and “facility did not raise rates in accordance with the applicable statutes.” Throughout the course of the investigation the Department conducted interviews and reviewed documentation relevant to the allegations. During the investigation, the Department reviewed the provider’s audited financial statements for Fiscal Years (FY) 2022 through 2025 regarding the allegation that the facility is in financial distress. The audited financial statements reviewed found that the provider is not in financial distress. Although the provider reported an operating loss of approximately $3.4 million, the loss included a non-cash depreciation expense of approximately $5.8 million. Additional revenues generated through investments and interest income offset the operating loss and resulted in a positive overall bottom line. From a cash flow perspective, the FY2025 Statement of Cash Flows reflected net cash from operating activities of approximately $10.4 million. The investigation found that this operating cash flow allowed the provider to fund investing activities, including equipment purchases and investments in financial securities, as well as financing activities such as long-term debt payments. With respect to liquidity, the documentation showed that the provider consistently maintained more than 400 Days Cash on Hand, representing approximately $48 million in cash and cash equivalents, as well as a current ratio exceeding 1:1. The Department also confirmed that the provider met the Continuing Care Contract Bureau reserve requirements for both operating reserves and debt service reserves. As of Fiscal Year End 2025, the required operating reserve of approximately $6.3 million was exceeded by approximately $33.5 million, and the required debt service reserve of approximately $3.25 million was exceeded by approximately $4.93 million. The Department also reviewed concerns related to the provider’s Homeship Fund (Fund), which may be available to residents who become unable to pay monthly care and service fees or other charges. Department staff confirmed that the Fund is maintained as a restricted asset on the Statement of Financial Position and that participation in the program is subject to specific qualifications and alternative payment arrangements agreed upon by the resident and the provider.