An audit shows Lancaster Manor, which has been operating in the black for a number of years, is in fact now losing money. And it's going fast. But selling it, might cost the county millions.

State Auditor Mike Foley releases his audit of Lancaster manor Tuesday.

Mike Foley says the county owned nursing home has lost $2 million over the past two years.

Foley reviewed Lancaster Manor over a 2 year period.

It lost $300,000 in the first fiscal year and another $1.7 million was racked up in the second year.

According to Foley, those losses were a result of significant accounting policy changes.

Foley says accounting lacked proper documentation.

Foley's audit also reveals hundreds of thousands of dollars in under-billings that Lancaster Manor would have been entitled to had it billed correctly.

Foley says some residents whose services were being provided by medicare were over-billed, and some residents were being cheated out of social security checks or pension checks.

"We asked a lot of questions about that. There's no substantiation, no documentation and no explanation what-so-ever as to why they would take $444,000 out of the residents trust accounts and move that over to the Manor's fund," Foley says.

Foley says there is no evidence of criminal wrong doing.

The homes financial instabilities have prompted Lancaster County Commissioners to consider selling the property.

A negotiated sale is underway between the county and Hunter Management based in Illinois.

According to Foley, if it is sold, the county could lose money.

"If the Manor is sold as lets say a hypothetical price of $8.6 million then Lancaster County would actually have to write a check back to the Nebraska Department of Health and Human Services in the amount of $5.6 million," says Foley.

According to Foley, if you sell a medicaid property then you have to pay the state the difference of the medicaid reimbursement rate that's been paid to the medicaid property.

"They'd have to give that money back to the state because the medicaid reimbursement rate that's been paid to the manor all these years included expenses for depreciation," Foley adds.

Foley suggests Lancaster County Commissioners re-appraise the property to make sure it is sold for full value.

Lancaster County Commissioners Bob Workman and Ray Stevens say the findings didn't surprise them and they are still planning on selling the property.

"The sale is very much worth while. We're losing a million dollars a year. We anticipate losing a bit more than that this year if we operate for a full 12 months," said Workman. "I think we move forward without a hesitation."

The commissioners say they will not get the property re-appraised.

"We had a meeting with a certified apprasier who did the appraisal initially and they said it was not worth it to reappraise the manor and that it would be a waste of tax payer money," said Workman.