A Rangitikei rest home has lost $200,000 to alleged fraud and mismanagement and is closing its dementia unit as it seeks a bailout from ratepayers.
Edale Aged Care in Marton – the only aged care facility in Rangitikei – is closing its dementia unit, has cut staff hours and is asking ratepayers to balance the books.
Police have confirmed a 48-year-old Marton woman is due to appear in the Marton District Court later this month, and the Rangitikei District Council is considering giving the rest home a loan.
Edale Trust Board chairman Dudley Brown said the board discovered fraudulent activity in September, of which $140,000 was due to financial mismanagement and $60,000 related to wages.
* Bulls rest home closure puts pressure on community
* Edale makes plea for financial aid
* Staff hours cut to save rest home
He said the trust “struggled” financially and fraudulent activity had compounded the issue.
With “good cashflow”, Brown believed the rest home was salvageable.
The home employs 35 people. Brown said staff hours had decreased, with “three or four” people opting for redundancy.
Edale had previously reduced the number of beds in the dementia unit due to a lack of demand, he said. The unit would be used for general care.
Ministry of Health spokeswomen Emma Prestidge said the ministry was notified of alleged fraud in October.
She said the ministry had also been notified the dementia care unit was closing and that the Whanganui District Health Board was working to ensure the relocation of residents went smoothly.
While the ministry had not provided funding directly to Edale, Whanganui DHB spokeswoman Andrea Bunn said it funded care for Edale residents who were eligible under the national agreement for aged residential care.
The trust is now running with a new management team and approached the council for an interest-free loan.
Brown said the money would be used to implement the recommendations from a report in January that proposed several changes, including a restructure of staffing.
The facility has recently undergone some expansion, with a normal occupancy of 87 to 91 per cent.
“We’re struggling,” Brown said. “We’ve had some good years and we’ve had some bad years. The alleged fraudulent activity has brought things to a head.”
“Edale is a significant business in the Rangitikei and with an ageing population is essential as it is the only aged care facility in the Rangitikei.”
Rangitikei District chief executive Ross McNeil was unsure if the loan request was the result of fraudulent activity.
He said the council agreed to discuss the needs of the rest home and a report would be put before the council next month.
Deputy mayor Nigel Belsham said there was no indication of the size of the loan Edale was asking for.
“My personal view is that we need to seriously look at the state of Edale. If possible, we can then look at support and what level of support.”
The centre is valued at $2.2 million, with total debt of less than $300,000.