Response to Memo re 90 Day Operating Expenses
The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we, as a provider of Sponsored Residential Services, have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. Some of the language within the document poses a risk to the future of Sponsored Residential Services.
Our recommended changes are as follows:
Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.
This can be interpreted in different ways in relation to sponsored services.
- Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
- An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.
Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.
- Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.
Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.
- Add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
- Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.