MURFREESBORO – The Arkansas Department of Human Services (DHS) has revoked the nursing home license of Murfreesboro Rehab and Nursing, Inc. as well as the license of the facility’s administrator after a survey earlier this month allegedly revealed multiple significant violations including the misappropriation of resident funds. That’s according to a statement released to Hope-Prescott News.
“DHS has also appointed an employee to act as the temporary management for the facility while our teams work closely with the 35 residents to move them to alternate settings that best meet their needs,” the statement added.
Arkansas DHS hand delivered a letter Wednesday, May 20th to facility owner Sandra Barnett. That letter stated, quote, “On May 7, 2026, the Office of Long-Term Care, under the Division of Provider Services and Quality Assurance (DPSQA), completed a survey at Murfreesboro Rehab and Nursing, Inc…The survey is resulting in the revocation of Murfressboro Rehab’s nursing home license.”
Following is a summary of details and allegations provided to Hope-Prescott News:
In another hand deliver letter to Barnett, from the Office of Long-Term Care (OLTC), “During the survey, Murfreesboro Rehab and Nursing, Inc. was cited for one (1) immediate jeopardy citation that is ongoing. The facility’s license will be effectively revoked on May 31, 2026, or immediately upon the transfer of all residents… Each long-term care facility must have a license to operate issued by DHS. Murfreesboro Rehab’s continued non-compliance with the Rules for Nursing Homes, and the insolvency of the facility, the Division of Provider Services and Quality Assurance is revoking Murfreesboro Rehab’s nursing home license, license number 0358, on May 31, 2026, or immediately upon the transfer of all residents.”
The Rules for Nursing Homes empowers OLTC to revoke a license when grounds exist for “Conduct or practices detrimental to the health of safety of residents and employees of any such institutions.” This letter serves as Notice of Violation of said rules.
Specifically, during the survey that concluded May 7, 2026, Murfreesboro Rehab has been cited for the following: Free from Misappropriation/Exploitation – The facility allegedly failed to ensure that residents were protected from exploitation and failed to ensure resident funds were protected from misappropriation for four of the five residents reviewed for misappropriation of resident funds. The immediate jeopardy (“IJ”) allegedly began on July 30, 2025, when facility staff allegedly opened and deposited a check belonging to a resident into a bank account belonging to the facility without the resident’s knowledge or permission, and utilized the funds belonging to the resident for facility purposes. The Administrator and Director of Nursing were notified of the IJ on May 6, 2026. A removal plan was requested, but an acceptable plan of removal has not been provided, and the facility remains in IJ status. “The State Agency’s survey specifically found that the facility received a “United States Treasury” check on July 25, 2025, payable to a resident in the care of the facility, in the amount of $56,481.00. The check had a notation in the bottom left corner that read “SOC SEC FOR INS.” The back of the check included an endorsement “Pay to the Order of [name of bank with account number] For Deposit Only [facility name] [account number.]”
A review of the facility’s July 2025 Bank Statement [Name of Bank and account number] allegedly showed a deposit on July 30, 2025, in the amount of $56,481.00. The account balance at the time of the deposit was $16.83. “The Resident asked facility staff about his check several times and he eventually suffered health complications due to the inaction of the facility. The Administrator allegedly asserted that the resident owed the facility a debt for his or her care. However, the Administrator allegedly was unable to produce any evidence that the resident owed any money to the facility. The Administrator also allegedly stated that the check was mistakenly deposited into the facility’s bank account because she believed it was an insurance payment made to the facility. However, the resident, not the facility, was the payee listed on the check. Knowledge of the check was allegedly also not limited to the Administrator. The survey allegedly revealed that it was common knowledge amongst the staff at the facility that the check had been deposited in the facility’s bank account.
The Administrator allegedly reported that she agreed to return the money to the resident by paying the resident $1,000.00 per week until all was repaid. The survey also revealed that funds were allegedly taken from resident bingo winnings and balances. All records kept for these funds were kept on paper, and the survey allegedly revealed that numerous residents’ cash was missing and could not be accounted for.
The second letter also alleged the facility lacked proper administration. According to 42 CFR §483.70 “a facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.” The facility allegedlyfail ed to have proper procedures in place to ensure that residents’ funds were not misappropriated. As indicated above, on July 30, 2025, facility staff allegedly opened and deposited a check belonging to a resident into a bank account belonging to the facility without the resident’s knowledge or permission, and utilized the funds belonging to the resident for facility purposes. In addition, the facility’s financial records revealed that facility funds were allegedly deposited into the administrator’s personal bank account. The facility also allegedly did not have proper documentation showing that funds had been provided to families.
The letter goes on to say the facility allegedly failed to have an effective governing body, or designated persons functioning as a governing body, that is legally responsible for establishing and implementing policies regarding the management of the facility, has caused or is likely to cause serious injury, harm, impairment or death to a resident. It appears no one is responsible for the management of the facility. According to a written statement by Administrator, the Administrator allegedly was the “sole governing body of [the facility].” It was also allegedly discovered that the administrator is also the owner who handles all the banking and finances. Consequently, without any oversight from a governing body, the facility has been issued an immediate jeopardy citation for misappropriation/exploitation based upon the Administrator allegedly depositing a resident’s Social Security check for $56,481.00 into the facility’s bank account illegally and without authorization. Given the facility’s insolvency, the facility will be allegedly unable to provide an acceptable plan of removal to correct the deficient practice.
Additionally, during this survey, other deficient practices were allegedly identified:
Protection/Management of Personal Funds -42 CFR § 483.10(f)(10)(i-ii) “The facility allegedly failed to protect the residents’ right to manage his or her financial affairs. This includes the right to know, in advance, what charges a facility may impose against a resident’s personal funds. This requirement was allegedly not met as evidenced by observation, records review, and interviews that indicate that the facility failed to act as a fiduciary of resident funds by safeguarding the managing Medicaid funds for all five of the residents reviewed. The specific facts that support this finding are the following: the alleged depositing of a resident’s SSD check into the facility’s bank account to pay for facility operating costs, and insisting that the resident owed a debt to the facility that could not be proven; unaccounted for losses of resident bingo winnings and change from resident purchases retained in “resident envelopes.”
Accounting and Records of Personal Funds – 42 CFR § 483.10(f)(10)(iii) “The facility allegedly failed to maintain a proper system of accounting for funds of the residents. For example, the survey revealed that the facility allegedly did not have a system to properly account for resident funds and the bingo winnings of the residents. The resident’s funds were allegedly kept in envelopes that had inaccurate ledgers of the moneys contained within the envelopes.
Failure to Investigate/Prevent/Correct Allege Violation – 42 CFR § 483.12(c)(2)-(4) “The facility allegedly failed to investigate alleged violations, failed to prevent future abuse, neglect, and exploitation of residents as required by 42 CFR §438.12(c). Following the survey, it was determined that the facility allegedly failed to immediately and thoroughly investigate allegations of misappropriation of resident property for two (2) of the thirteen (13) residents reviewed for exploitation. One instance was when the facility’s administrator allegedly deposited a resident’s check for $56,481.00 into a facility checking account without the resident’s knowledge or consent. The second instance was when it was alleged that a family member of one resident had used the debit card of another resident with authorization.
Violation of Resident Rights -42 CFR § 483.10 “The facility was found to have allegedly violated a resident’s rights under 42 CFR §438.10(b). Based upon the findings of the survey, the facility allegedly failed to ensure residents were not subjected to abuse or misappropriation of their property and failed to ensure the right for privacy of a resident. Specifically, a resident’s mail was allegedly opened, and a check for $56,481.00 was deposited into a facility checking account without the resident’s knowledge or consent.
Failure to Report Allege Violation – 42 CFR § 483.12(b)(5) “The facility allegedly failed to properly report an alleged violation. A facility is required to report an allege abuse not later than 2 hours after the allegation is made, if the events that cause the allegation involve abuse or result in serious bodily injury, or not later than 24 hours if the events that cause the allegation do not involve abuse and do not result in serious bodily injury, to the administrator of the facility and to other officials (including to the State Survey Agency and adult protective
services where state law provides for jurisdiction in long-term care facilities) in accordance with State law through established procedures. The survey revealed that the facility allegedly failed to properly report the allegation of misappropriation ofa resident’s check for $56,481.00.
Additionally, each facility is required to employ a licensed administrator under Ark. Code Ann. § 20-10-402. With the administrator’s license of Ms. Barnett having been revoked, Murfreesboro Rehab cannot continue operations without a licensed administrator. Due to Murfreesboro Rehab’s alleged continued non-compliance with federal and state regulations, and the amount and severity of violations at Murfreesboro Rehab, the Division of Provider Services and Quality Assurance is revoking Murfreesboro Rehab’s Nursing Home
License pursuant to the State Rules for Nursing Homes. See 20 CAR $400-205(3). Moreover, when “an item of noncompliance is of a serious nature that affects the health and safety of patients and is not promptly corrected,” then DHS may revoke the facility’s license. 20 CAR $400-212(b); see also Ark. Code Ann. § 20-10-224(b)(2).
Because the Division of Provider Services and Quality Assurance is revoking Murfreesboro Rehab’s long-term care licensure, they have the right to a hearing.
In a third hand delivered letter to Sandra Barnett, the Office of Long-Term Care (OLTC) of the Division of Provider Services and Quality Assurance (DPSQA), “a facility at which you are the administrator, has been issued one (1) immediate jeopardy citation. Due to this citation, the facility’s failure to remediate, the related detrimental impact on the health and safety of residents, the revocation of said facilities’ long-term care facility license, and the appointment of a temporary manager for the receiver, DPSQA finds you in violation of 20 CAR §402-310(a) of the Rules for the Licensure of Nursing Home Administrators in Arkansas. Additionally, your administrator’s license is being revoked because of your (alleged) misconduct pursuant to 20 CAR §402-310(b)(ii-iii). Following a maltreatment investigation by DPSQA, it has determined that you have (allegedly) committed Misappropriation as defined in Ark. Code Ann. $12-12-1703(7) and Abuse as defined in Ark Code Ann. $12-12-1703(7)(A). For these reasons, your administrator’s license is hereby revoked.