Delaware nursing homes passed Medicaid audits with 8 flaws each
Summary
The Delaware Office of Auditor of Accounts examined 14 nursing facilities' FY2022 Medicaid cost reports -- the filings that help set what the state pays each facility per patient-day. All 14 came back with unmodified opinions. All 14 also had findings, averaging 8 apiece with a high of 14 at one facility, and two facilities' management never responded at all. The auditor's own conclusion: the pattern is a sign the facilities' internal system is failing.
These aren't routine paperwork -- they set what Medicaid pays per patient-day
Each facility's cost report and Nursing Wage Survey exist for one purpose: complying with the Delaware Division of Medicaid and Medical Assistance's requirements for calculating Medicaid program reimbursement⧉ -- the per-patient-day rate the state pays each nursing home for its Medicaid residents. The Auditor of Accounts is authorized under state law to audit the financial transactions of state agencies⧉, and this batch covers 14 facilities' cost reports for the fiscal year ended June 30, 2022⧉, examined against federal Medicaid rules and Delaware's own state plan.
View data as table
| Atlantic Shores Rehab. and Health Center | 7 | includes a disallowed lobbying-expense claim |
|---|---|---|
| Delaware Veterans Home (state-owned) | 7 | the state's own facility, examined the same way |
| Kentmere Rehabilitation and Healthcare | 6 | management cites turnover in cost-report preparers |
Three facilities, three different problems, the same underlying pattern
At Atlantic Shores Rehabilitation and Health Center⧉, seven findings included one flagging that the facility tried to bill Medicaid for personal-use cable television, political lobbying, and nurse-aide-training expense as if they were reimbursable patient-care costs⧉ -- costs the Medicaid reimbursement manual specifically excludes.
At Kentmere Rehabilitation and Healthcare⧉, management's response to three separate findings pointed to the same underlying fix each time: it had changed who prepares the cost report⧉, pointing to staff turnover in that role as the source of the errors rather than a single mistake.
The most striking of the three is the Delaware Veterans Home⧉ -- because the provider isn't a private operator at all. It's owned and operated by the State of Delaware⧉, examined the same way as the other 13, and it logged seven findings of its own -- tied with Atlantic Shores for the most of the three facilities read for this piece. One found the facility hadn't recorded any depreciation expense on its cost report at all -- management's response explained that because the state itself owns the facility, depreciation simply isn't part of its routine accounting transactions⧉.
A separate Delaware Veterans Home finding flagged a non-allowable civil money penalty expense included among costs submitted for reimbursement⧉. The state's own nursing home, filing with the state's own Medicaid division, tripped several of the same wires as the private facilities around it.
View data as table
| Atlantic Shores Rehab. and Health Center | 21,846,048 | 7 findings |
|---|---|---|
| Delaware Veterans Home (state-owned) | 12,973,762 | 6 findings; $0 capital cost reported (no depreciation recorded) |
| Kentmere Rehabilitation and Healthcare | 11,499,425 | 6 findings |
The auditor's own read: a system that only works because someone else is checking it
None of the individual findings, on its own, was large enough to change a facility's opinion -- that's what "unmodified" and "non-material" mean. What worried the auditor's office enough to say so directly was the volume, averaging 8 per facility statewide with a high of 14⧉: individually small errors that "risk that many small, non-material errors can aggregate to cross the threshold for materiality, resulting in a modified opinion"⧉ in a future year, if the pattern isn't fixed. The office adds that the numerous findings "point to a breakdown in the day-to-day systems and procedures designed to prevent and detect errors"⧉ -- facilities passing their audits only because an outside examiner is finding and correcting the mistakes first.
- All 14 Delaware nursing facilities examined for FY2022 passed with unmodified Medicaid cost-report opinions -- and all 14 also had findings, averaging 8 apiece with a high of 14 at one facility, on the reports that help set what the state pays each facility per Medicaid patient-day.
- Two of the 14 facilities' management never responded to the auditor's findings or offered any plan to fix them.
- The problems weren't confined to private operators. The state-owned Delaware Veterans Home, examined the same way as the other 13, had seven findings of its own -- tied for the most of the three facilities read for this piece -- including a Medicaid cost report that recorded zero depreciation expense.
- The Auditor of Accounts draws its own conclusion from the pattern, in its own words: the volume of non-material findings is 'a strong indicator of deteriorating or weak internal controls,' and facilities passing only because 'the internal system is failing' and outside auditors are catching the errors instead.
This piece reads three of the 14 individual facility examinations in full -- Atlantic Shores Rehabilitation and Health Center, the Delaware Veterans Home, and Kentmere Rehabilitation and Healthcare, chosen to sample the batch directly -- plus the Auditor of Accounts' own summary page, which supplies the statewide average (8), high (14), and no-response count (2 of 14) for all 14 facilities; this piece does not independently verify those statewide aggregates against the other 11 individual reports. The three per-facility cost totals charted here are independently summed from six line items each; the source reports do not themselves print a single combined total (see analysis notes). The examinations test compliance with cost-reporting rules under Government Auditing Standards -- they are not clinical-care inspections, and an unmodified opinion here says nothing about the quality of care a resident receives. Fiscal year ended June 30, 2022; the accountant's reports are each dated December 1, 2025, and the Auditor of Accounts posted them publicly on February 19, 2026 -- about three years and eight months after the fiscal year closed.
Sources(5) ▾
- Delaware Office of Auditor of Accounts (Lydia E. York, State Auditor), Long Term Care Facilities FY22 (2026-02-19) — The Auditor of Accounts' own summary page for the batch of 14 FY2022 long-term-care-facility examinations, posted February 19, 2026. Carries the office's aggregate statistics (average and high finding counts, the two facilities with no management response) and its own written conclusion about internal controls -- read directly from the live page, not a press summary of it. auditor.delaware.gov · original document
- Myers and Stauffer LC, for the Delaware Office of Auditor of Accounts, Examination of Atlantic Shores Rehabilitation and Health Center, FY2022 (2025-12-01) — One of the 14 individual facility examinations in the FY22 batch, read in full: the accountant's opinion letter, the Schedule of Adjustments to the Trial Balance (reported cost-center totals), and the seven-item Schedule of Findings with the facility's own management responses. auditor.delaware.gov · original document
- Myers and Stauffer LC, for the Delaware Office of Auditor of Accounts, Examination of Delaware Veterans Home, FY2022 (2025-12-01) — The examination of the state-owned and state-operated Delaware Veterans Home, read in full: opinion letter, reported cost-center totals, and its six-item Schedule of Findings with management responses -- notable because the provider here is the State of Delaware itself. auditor.delaware.gov · original document
- Myers and Stauffer LC, for the Delaware Office of Auditor of Accounts, Examination of Kentmere Rehabilitation and Healthcare, FY2022 (2025-12-01) — A third individual facility examination read in full, chosen alongside Atlantic Shores and the Delaware Veterans Home to sample the batch directly rather than rely only on the auditor's own aggregate statement. auditor.delaware.gov · original document
- Delaware Office of Auditor of Accounts, Contact Us -- Delaware Office of Auditor of Accounts (2026-07-21) — The office's own published contact details and public fraud-reporting portal, re-fetched this iteration to source the call-to-action. auditor.delaware.gov · original document
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Every one of the 14 Delaware nursing facilities whose FY2022 Medicaid cost reports the state Auditor of Accounts examined⧉ received an unmodified opinion -- auditor-speak for "no material misstatement." Every one of them also had findings: an average of 8 per facility, with a high of 14 at one⧉, and two facilities whose management didn't respond to the findings at all. The auditor's office draws its own conclusion from that pattern, in its own words: the sheer number of issues means the facilities are relying on external auditors to catch errors, "a sign that the internal system is failing."⧉