A new investigation by a federal watchdog finds that one state is not doing enough to expend penalty dollars that it’s collecting from nursing homes.

The Office of the Inspector General recently conducted its investigation, which found that during a three-year period, Michigan collected more than $3.6 million in Civil Money Penalty dollars. Those funds are meant to be reinvested to improve skilled care and yet, the Great Lakes State spent only about two-thirds of the pot, or $2.3 million.

Reasons for that mismatch in spending and collections, the OIG noted, included receiving an insufficient number of applications, and an inability to increase awareness of their availability.

“As a result, residents and facilities were potentially underserved because of the limited number of services that were approved and supported with CMP collections,” the office wrote.

Nursing home industry advocates said Tuesday that the underuse of funds has been an ongoing concern in Michigan.

Melissa Samuel, president and CEO of the Health Care Association of Michigan, said the total CMP fund balance “has always been relatively high,” noting that it has floated around $16 million in recent years. However, the process to gain those funds has been “laborious,” with applicants often jumping through numerous hoops only to get rejected.

“It’s very frustrating,” Samuel told McKnight’s, noting that there are “a lot good programs out there” in other states that could be emulated.

Given those frustrations, the Michigan Department of Health and Human Services is holding a stakeholder feedback session on Thursday to try and figure out how to better use these funds. David Herbel, president and CEO of LeadingAge Michigan, said he’s hopeful, given that session and a recent change to allow providers to apply for funds electronically.

“These types of overhauls are never easy and without delays. Having said that, our hope is Michigan will soon be back on track and thoughtfully administering the CMP monies for improvement and innovation,” Herbel told McKnight’s Tuesday.