HILL VIEW MANOR County has right to disputed money, consultant says

The deal fell through when the state pulled its approval.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- A consultant recommends that the county go after Sylvan Heights Realty Partners for about $140,000 taken from the county nursing home account.
ZA Consulting presented its findings of an audit of the nursing home, Hill View Manor, to county commissioners, the controller and solicitor and the public Thursday. Findings included recommendations for better accounting at the nursing home for practices that preceded the home's most recent troubles.
The home had been for sale, but the deal fell through when the Pennsylvania Department of Health pulled its approval.
Sylvan Heights and Americare, nursing home managers, were the focus of most of ZA's report.
The deal
Sylvan signed a letter of intent to buy the nursing home and nearby land in December 2002. Americare took over managing it in February 2003. John Hagkiss is one of the buyers and is president of Americare. County commissioners fired Americare Aug. 5. The sale fell through about a week earlier.
Lisa Wilt of ZA Consulting said her firm found that checks from private-pay patients and private insurances were being held at the nursing home starting in February at the direction of Americare.
In April, the home's chief financial officer opened a bank account in Sylvan's name at the direction of one of the buyers, the report said. The CFO called Commissioner Roger DeCarbo to confirm that could be done and DeCarbo, believing it was a different account, approved it, Wilt said.
DeCarbo has said he believed the financial officer was calling about an account the county treasurer was instructed to open, but never did.
Wilt said the money put in that account, totaling $592,330, belongs to the county.
This week, county officials did transfer $450,000 in the account back to county coffers, said Mary Ann Reiter, county controller.
Shortly after the sale fell through, Reiter went to court to freeze the funds. A judge, instead, gave her signatory power over all money in the account. She said about $1,400 remains.
How it was spent
Reiter said she will now look at how the $140,000 taken from the nursing home account was spent. She said the county likely won't ask for reimbursement for things like the salary of the home's administrator paid from that account.
George Howley, one of the buyers, contends that the sales agreement gave them the right to put the money in a private account. Howley could not be reached Thursday, but his attorney, David Acker, reiterated that they believe the sales contract gave Sylvan the money.
But Wilt disagrees.
"The sales agreement speaks about the buyer [being] entitled to deposit checks after a certain date. The buyer just believed if they held onto the checks and deposited them after a certain date, they could keep the checks. That's now how we read the agreement," she said.
Wilt said there were many things paid for out of that account that didn't follow county procedure, such as new computers. Under normal county procedure, county commissioners should have approved the purchase and the controller paid for them.
Wilt said some of the other expenses include paying the state for the new owners nursing home operating license and wages to Howley. "I don't think you intended to pay wages to George Howley from Hill View Manor funds," Wilt said.
Wilt noted that nursing home employees told ZA that Howley set up an office in the county nursing home sometime in December and was there almost daily. Howley has said he was there working for Sylvan Heights Realty Partners. Acker said Sylvan Heights wanted somebody on site.
County commissioners said they were unaware that Howley had established an office in the building.
cioffi@vindy.com