By John Balch
News-Leader staff
Findings of alleged facility mismanagement and cases of misappropriation of funds, ranging from a resident’s Social Security check to residents’ bingo winnings, resulted in the state abruptly shutting down Murfreesboro Rehab & Nursing Home last week and relocating its residents to area facilities.
The Arkansas Department of Human Services Division of Provider Services & Quality Assurance (DPSQA) and the Office of Long Term Care (OTLC) notified the facility staff and residents the afternoon of Wednesday, May 20, that the facility’s operating license was being revoked, as was the administrator license of Sandra Barnett, owner and administrator.
The revocations come on the heels of a nursing home survey conducted by the OTLC on May 4 in which the facility was cited for an “immediate jeopardy citation that is ongoing,” according to the notification letters that were hand-delivered to the facility on May 20 and provided to the newspaper.
“Due to the amount and severity of violations, Murfreesboro Rehab’s continued non-compliance with the Rules for Nursing Homes, and the insolvency of the facility” the DPSQA decided to revoke the facility’s nursing home license on May 31 “or immediately upon transfer of all residents,” according to the documents. A DHS employee, David Parker, was also appointed on May 20 as the facility’s temporary manager, who began to coordinate the prearranged transfers to area nursing homes.
That afternoon, transport vehicles and personnel began to arrive on the scene and joined throngs of family members, friends, concerned citizens and community leaders, who all said they were caught off guard by the sudden announcement.
The nursing home has officially been cited with failing to keep residents free from misappropriation/exploitation; lacking proper administration and a governing body; failing to protect the residents’ rights to manage their financial affairs; failing to maintain a proper accounting system for residents’ funds; failure to investigate/prevent/correct alleged violations; violating a resident’s rights; and failure to report alleged violations.
The results of the 36-page survey showed that the “immediate jeopardy” issue began on July 30, 2025, when a staff member opened mail belonging to a resident without their permission. The check was a Social Security disability settlement for $56,481 and was addressed to the resident. The resident was not notified that the check they had been waiting for, and had consistently asked staff and Barnett about, had arrived. The employee said she contacted Barnett, who was on vacation, and was instructed to deposit the check into the facility’s account.
The report noted the facility’s account balance prior to the deposit was $16.83.
In an interview by the OLTC, Barnett stated that she thought the check in question was a back payment from the resident, who she claimed owed $39,000. The survey found no evidence that the resident owed any back pay from a review of their “ledger account cash journal.”
When asked about the ledger showing no debt for the resident, Barnett said the electronic system used for accounting was “never correct” for the facility, so accounting was done on paper.
Barnett also stated that the resident had agreed to be repaid for the $56,481 check with $1,000 per week because she “could not just come up with $56,000..” The survey found no evidence of that agreement and that the facility continued to use the misappropriated funds for operations. Barnett did later provide confirmation of at least four $1,000 checks that had been issued to the resident for payback.
Barnett also acknowledged there had been no investigation into the matter and that she and other certain employees are “mandated reporters,” resulting in the OLTC citing the facility with failure to report.
The survey further stated that the health of the resident involved suffered from the incident.
The facility was further cited in this matter with violating the resident’s rights by failing to ensure they were not subjected to “abuse or misappropriation of their property and failed to ensure the right to privacy.”
The survey also determined that the facility failed to protect “four of five residents” reviewed for misappropriation of Medicaid funds and that residents’ personal funds, including bingo winnings, were missing.
The missing funds were discovered after a resident had passed away and their family was directed to collect their belongings and “residential envelopes,” which were held in a lockbox in the facility’s medication room and included the $40 residents receive monthly plus money given by families and bingo winnings. The family returned two months later to collect and found the envelope that was said to contain $54 in cash only had $14.
Two employees checked the contents of the lockbox and found “money missing from about half of the envelopes.” Barnett responded in an interview that several employees could have accessed the lockbox and that she had returned the money to the family.
The facility’s financial records also revealed instances when facility funds were allegedly deposited into Barnett’s personal bank account and that there were instances of Medicaid funds commingling with business funds. Barnett is described as the “sole governing body” of the facility who handles all the banking and finances.
Appeal Rights
In the letters delivered on May 20, Barnett was advised of her right to a hearing when an “administrative remedy is imposed” on the facility, as well as the right to a hearing to appeal the revocation of her administration license. Requests for hearings must be received by the state within 60 days, as of May 20.
