When my dad lived in his home he always used cash for his small living expenses, ie groceries, haircuts, lawn care. Will this be a problem?

How much cash?

What Medicaid looks for are BIG discrepancies like giving or loaning money, a large amount of money. They will require 5 years of bank statements. Moms caseworker only used 4 months a year (20 months in all) to evaluate Mom. He could see SS going in and Moms bills going out. Mom had a $200 pension check that she used for spending money. The caseworker had the check info but never questioned where it went. Since I was using that check when she was in the AL for personal things for Mom, I did keep receipts. They will see the same amount going out every month. If asked, just say Dad liked using cash to pay for his expenses.

Well, the bank must have a record of the withdrawals so you know how much cash was spent in this way. If it tallies overall with ordinary day to day personal and home expenditure it should be fine. Is there some large amount unaccounted for that's worrying you?

I don’t know how much money you’re talking about, but unless it was quite a large sum I wouldn’t think they’d care. My mom had her SS check direct deposited, a smaller $431 pension check came in the mail. The pension check was never, ever deposited, always just cashed so Mom would have cash on hand for groceries, spending money, etc. Medicaid never questioned what happened with those checks or where the cash was going.

My mom takes 900$ out every month for her "expenses".. every month for 5 years! She uses it for the cleaning gal, the casino, her wine.. and her share of groceries, co pays for the Dr.. etc. We were told that since it is a routine and unchanged amount for years there would be no problem. They would look at a sudden larger amount .

His financial institution will have a record and IMHO, if it is just small, incidental amounts, it probably would not be a problem, BUT I am not a financial advisor.

When we put my mother-in-law on Medicaide we just needed to provide bank statements, proof of her medications, rent statement, etc. We just needed to provide receipts for any purchases over $200. Fortunately for us we were able to get receipts from where we purchased her chair and TV because it had been less than 2 years

I don't think so. As long as you have documentation in the form of bank statements, household expenses, etc, you should be fine. However, if you feel uncertain, I would suggest contacting an elder attorney. Many of them offer a free initial consultation. The other option is to call your state's department of health and ask to speak to a representative familiar with the nursing home grant.