INITIAL COMMENTS
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This report is a result of an on-site recovery house complaint investigation conducted on August 21, 2026, by staff from the Bureau of Program Licensure. Based on the findings of the on-site complaint investigation, Surge Recovery 3 I5766701 was found not to be in compliance with the applicable chapters of 28 PA Code which pertain to the recovery house. Therefore, a plan of correction is required.
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Plan of Correction
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§ 717.16 LICENSURE Fiscal Management
§ 717.16. Fiscal management.
The licensee shall develop and implement written policies and procedures for management of all funds received and expended by the drug and alcohol recovery house in accordance with standard accounting practices, including an itemized record and documentation of all revenues and expenditures.
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Observations
Based on a review of financial records conducted on August 21, 2026, the facility failed to provide management of all funds received and expended by the drug and alcohol recovery house in accordance with standard accounting practices, including an itemized record and documentation of all revenues and expenditures.
Receipts for food purchases were not available and money collected by the facility for food was in excess than what was spent for the months of March 2026 through August 2026.
March- $1,182 was collected in food stamps. Receipts for food purchased for the house were:
3/13/26-$94.94
3/20/26-$623.18
3/23/26-179.72
Total- 897.94
April- $788 was collected in food stamps. Receipts for food purchased for the house were:
No receipts available
May- $788 was collected in food stamps. Receipts for food purchased for the house were:
5/13/26- 987.09
June- $ 1161 was collected in food stamps. Receipts for food purchased for the house were:
No receipts available
July- $1379 was collected in food stamps. Receipts for food purchased for the house were:
7/10/26- 410.88
August- $394 was collected in food stamps. Receipts for food purchased for the house were:
Staff confirmed a food delivery was made but no receipts were available
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Plan of Correction
Surge Recovery, Inc. has adopted Policy FM-01, Fiscal Management Policy and Procedures, to implement 28 Pa. Code § 717.16 at all three licensed houses: 644 S. 60th Street, 638 S. 60th Street, and 2538 N. 16th Street. The policy directly responds to the August 21, 2026 financial records review, which found that receipts for food purchases were not available and that food funds collected from residents exceeded food expenditures from March through August 2026. To fix the missing receipts, every food purchase now needs a vendor-issued itemized receipt showing vendor, date, each item, price, and total. The purchaser submits it to the House Manager within one business day, and it is logged the same day on a Food Fund Ledger kept for each house. A Missing Receipt Affidavit may be used only when a duplicate cannot be obtained from the vendor, must be supported by the matching bank or card statement line, and requires Managing Director approval. More than one affidavit by the same staff person in 90 days results in retraining and possible loss of purchasing authority. More broadly, every dollar received is documented with a pre-numbered duplicate receipt and deposited into the organizational account within two business days after a two-person count. Collected cash may never be spent before deposit. Every expenditure is itemized, coded by house, and approved within set dollar thresholds.
To fix the surplus, resident food contributions are now tracked in a separate Resident Food Fund account for each house. The funds may be spent only on food for residents of the house that paid them, and they may never be moved to operating funds or another house. By the 10th of each month, finance staff complete a Monthly Food Fund Reconciliation (Form FM-C) for each house. The form reconciles the beginning balance, contributions received, and receipted expenditures to the ending balance, and every difference must be explained in writing. The Managing Director and Executive Director sign it. If a house's balance exceeds one month of average food costs for two consecutive months, the Managing Director must act within 30 days. That means either adjusting purchasing so residents receive the food they paid for, or reducing the contribution rate. Departing residents are refunded any unused prepaid food contribution, documented on a signed Resident Refund Acknowledgment, consistent with § 717.25(a)(2). The policy also protects residents under § 717.25. Food contribution amounts must be set in writing in the residency agreement at admission. No resident may be required to relinquish SNAP or other public benefits, and staff may not hold residents' EBT cards or PINs. Oversight includes monthly bank reconciliations, quarterly Board reporting with a Food Fund summary for each house, a discrepancy escalation process, annual policy review, and seven-year record retention. All staff with fiscal duties must be trained within 30 days of the policy's effective date and annually after that.
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§ 717.19(a)(1) LICENSURE Resident Rights
§ 717.19. Resident rights.
(a) The licensee shall develop and implement written policies and procedures on resident rights which must include:
(1) Residents shall retain all civil rights that have not been specifically curtailed by separate judicial or administrative determination by the appropriate legal authority.
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Observations
Based on interviews with residents, the facility failed to follow the facility policy and procedures stating the resident will not be subject to unusual punishment, humiliation, or physical, verbal, or mental abuse and be afforded dignity in personal relationships with staff and other persons. It was reported that staff became combative and retaliatory towards residents when concerns were being addressed.
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Plan of Correction
Surge Recovery, Inc. takes seriously every concern raised by residents about their treatment and dignity, and it acknowledges the Department's observation. After receiving the Department's findings, Surge Recovery's Executive Director and Managing Director conducted an internal review of the concerns, including interviews with staff and residents at the affected house. Regardless of the outcome of any individual account, Surge Recovery recognizes that residents must feel safe raising concerns without fear of a combative or retaliatory response. To reinforce that standard, all House Managers and Residential Aides have been retrained on the agency's Resident Rights Policy. The training covered each resident's right to be free from unusual punishment, humiliation, and physical, verbal, or mental abuse, and the right to be treated with dignity. We also covered the agency's prohibition on retaliation against any resident who raises a concern or files a complaint. Going forward, this training will be part of new-hire orientation and repeated annually.
To make sure these improvements are sustained, starting today the Managing Director will lead a weekly staff meeting segment that reviews staff conduct expectations, de-escalation, and professional responses to resident concerns. Residents will be reminded during house meetings of their right to raise concerns and of the complaint process under § 717.26. That process will include a way to bring concerns directly to the Managing Director or Executive Director without going through house-level staff. The Managing Director will review all resident complaints and concerns monthly to identify any pattern of staff conduct and will take corrective or disciplinary action where warranted.
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§ 717.25(b)(1) LICENSURE Financial transactions
§ 717.25. Financial transactions.
(b) The licensee shall develop and implement written policies and procedures that prohibit the licensee, staff, volunteers or contractors of the drug and alcohol recovery house from:
(1) Requiring a resident to sign a document relinquishing the resident's public assistance benefits, including medical assistance benefits, cash assistance, Supplemental Security Income and Supplemental Nutrition Assistance Program benefits.
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Observations
Based on a review of the facility policy and procedure manual, the facility is "Prohibited, no exceptions: requiring a resident to sign away public benefits (Medical Assistance, SSI, SNAP, cash assistance); requiring surrender of cash or a paycheck; borrowing from or lending to a resident; buying or selling property with a resident; soliciting any fee or commission beyond the rent set in writing".
The facility is requiring residents to surrender $197 of SNAP benefits in lieu of rent.
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Plan of Correction
Surge Recovery, Inc. takes seriously the Department's concern and has taken steps to make sure its written policy, which prohibits requiring any resident to relinquish public assistance benefits including SNAP, is applied consistently at every house. Effective September 21, 2026, Surge Recovery accepts no SNAP benefits from residents in any form, at all three licensed houses, whether as rent, as a food contribution, or in place of any other fee. SNAP benefits remain entirely under each resident's control, and staff will not hold, use, or direct the use of any resident's EBT card, PIN, or benefits. By September 21, 2026, the Managing Director met with residents at each house to reaffirm that no portion of their benefits is required as a condition of residency, and to review how to raise concerns directly with the Managing Director, the Executive Director, or DDAP. To further strengthen resident awareness, the § 717.25(b) protections are being incorporated directly into the Financial Agreement that each resident receives and signs at admission, and current residents will sign an acknowledgment of these protections by October 1, 2026. [Surge Recovery is also reviewing resident financial records and will return any amounts identified as inconsistent with this policy by October 1, 2026.] By Sept 21, 2026, all House Managers and Residential Aides were retrained on the Financial Transactions Policy and the § 717.25 prohibitions, and violations will result in disciplinary action up to and including termination. Going forward, the Managing Director will review resident financial transactions at each house monthly to confirm compliance. The Managing Director is responsible for implementing this plan and the Executive Director for overseeing it, with full implementation completed by September 21st, 2026. |