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The Immigration and Naturalization Service and
the United States Marshals Service
Intergovernmental Service Agreements for
Detention Services with the
County of York, Pennsylvania
York County Prison

Report No. GR-70-01-005
June 25, 2001
Office of the Inspector General


FINDINGS AND RECOMMENDATIONS

Jail Day Rates

Based on our audit of costs incurred and the average daily population at York for the period of January 1, 2000 through December 31, 2000, we calculated an audited jail day rate of $37.07 as shown in the following table.

Audited Jail Day Rate
Total Incurred Costs $ 24,628,612
Offsetting Credits/Income (1,498,984)
Audit Exceptions (308,548)
Net Allowable Costs $ 22,821,080
   
Divided by  
Days per Year 3662
Divided by:  
Average Daily Population 1,682
Equals:  
   
Audited Jail Day Rate $ 37.07

We evaluated York's operating costs based on INS and USMS policy and Office of Management and Budget Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments. Based on our evaluation, we took exception to $308,548 of the incurred costs. In addition, we determined that York received $1,498,984 in offsetting credits resulting from revenue accounts (see Note 5 under Incurred Costs for additional details). Because the agreement established a $60 jail day rate and the audited rate was $37.07, during York's FY 2000 the INS overpaid York $22.93 a day for its average daily population of 729 detainees, or an overpayment of $6,118,045. In addition, the USMS overpaid York $7.93 a day for its average daily population of 17 detainees, or an overpayment of $49,340. The BOP averaged .4 prisoners per day and, using the USMS agreement, overpaid York $1,161. The total overpayment by the Department to house federal detainees at York for the period under review was $6,168,546.3 Had there been no audit exceptions or revenue offsets for FY 2000, the jail day rate would have been $40.01 and the Department still would have been overcharged $5,365,390.

As part of our audit, we also calculated potential annual savings to the INS, USMS, and BOP for York's FY 2001 based on our audited rate. We are reporting these savings as "funds to better use." We have taken a conservative approach of assuming a constant prison population in projecting funds to better use of $6,366,917. This includes $6,311,536 for the INS, $54,108 for the USMS and $1,273 for the BOP. The difference between questioned costs and funds to better use results from (1) allowing costs associated with INS and EOIR administrative space for FY 2000 but not for the future years when the space should be acquired through a more appropriate method, and (2) excluding from future years a nonrecurring cost for a legal settlement involving payments to correctional officers for time that was spent in meetings. Because our estimate is conservative, an increase in the prison population would result in a lower rate and greater savings.

Incurred Costs

The following table presents our analysis of the costs incurred by York for the period January 1, 2000 through December 31, 2000. Audit exceptions are explained in the notes following the table.

York County Prison Fiscal Year 2000 Expenditures

Cost
Category

Line Item

Incurred Costs

Audit Exceptions

Total Allowable Costs

Notes



Personnel Services


Salaries


$12,017,328


$118,767


$11,898,561


1

Benefits

3,754,078

  37,293

3,716,785

1

 
 

$15,771,406

$156,060

$15,615,346



Other Services

Advertise & public information

$ 3,942

-

$ 3,942

Postage

29

-

29

Telephone

84,508

-

84,508

Fuel

165,516

9,434

156,082

2

Electricity

458,677

26,145

432,532

2

Water

60,320

3,438

56,882

2

Sewer

98,634

5,622

93,012

2

Trash Removal

43,800

2,496

41,304

2

Specialty Training &Staff Development

16,512

-

16,512

Association Dues &Expenses

1,630

-

1,630

Printing

6,843

-

6,843

Uniform Allowance

108,229

-

108,229

Travel Mileage Reimburse

61

-

61

Vehicle Insurance

36

-

36

Travel Food & Lodging

10,176

-

10,176

Gas & Oil

5,797

-

5,797

Maintenance-Vehicle

7,413

-

7,413

Contract Service Agreements

78,477

-

78,477

Custodial Services

5,200

296

4,904

2

Professional Services

1,807,987

-

1,807,987

Maintenance & Repairs

233,512

13,310

220,202

2

Medical & Dental Services

798,864

-

798,864

Equipment Rental

448

-

448

Radio Systems & Communications

19,685

-

19,685

Out of Court Settlement

545,244

-

545,244

3

 
 

$4,561,540

$60,741

$4,500,799



Materials

Office Equipment

$ 226

-

$.226

& Supplies

Pamphlet, Subscription& Publications

124

-

124

Painting Supplies

92

-

92

Office Supplies

34,204

-

34,204

Janitorial Supplies

110,198

6,281

103,917

2

Housekeeping & Kitchen Supplies

168,648

-

168,648

Bedding & Linen

18,883

-

18,883

Clothing, Shoes & Furnishings

13,055

-

13,055

Grocery, Meat & Provisions

2,231,302

-

2,231,302

4

Medical Supplies

466

-

466

 
 

$2,577,198

$6,281

$2,570,917



Capital Outlay

Purchase of Equipment

$ 53,223

-

$ 53,223

Exterior & Major Repairs

45,034

-

45,034

Lease/Purchase Agreements

45,261

28,537

16,724

1

 
 

$143,518

$28,537

$114,981



Miscellaneous

Depreciation

$ 925,600

$56,929

$ 868,671

2

Indirect Costs

649,350

-

649,350

 
 

$1,574,950

$56,929

$1,518,021



 
 

Subtotal

$24,628,612

$308,548

$24,320,064



Offsetting Credits/Income

Revenue accounts

$(1,498,984)

-

$(1,498,984)

5

 
 



Total

$23,129,628

$308,548

$22,821,080

Source: York County purchase orders, budgets, direct payment authorizations, invoices and receipts.

Notes:

  1. We took exception to costs associated with the Outmate Program because it does not benefit federal detainees. See page 9 for a discussion of the Outmate Program. OMB Circular A-87 provides that costs incurred that do not benefit the federal program are not allocable. For the Outmate Program, we identified direct costs related to salaries, fringe benefits, and trailer rent that do not benefit federal detainees. We took exception to salaries for three correctional officers assigned on a full-time basis to the Outmate Program ($118,767), their fringe benefits ($37,293), and the cost of renting trailers ($28,537) used in the program.

  2. Compensation for costs associated with maintaining administrative space for the INS and the EOIR should not be included in the computation of the jail day rate. See page 9 for further details of the INS and EOIR administration space. Using square footage information provided to us by York as a basis for allocating direct costs, we excluded $123,951 from the computation of the jail day rate. To establish the allocation rate of 5.7 percent, we divided 21,426 square feet of administrative space (19,982 square feet within the prison and 1,444 square feet in the adjacent farmhouse) by the prison's total 376,100 square feet, including the farmhouse. We then multiplied by the allocation rate each direct cost element applicable to the INS and EOIR administrative space. The cost elements and allocated costs were fuel ($9,434), electric ($26,145), water ($3,438) sewer ($5,622), trash ($2,496), custodial ($296), maintenance ($13,310), and janitorial supplies ($6,281). We separately calculated depreciation ($56,929) except for the fully depreciated farmhouse. The INS and the EOIR should reimburse York for the administrative space provided. In Appendix I (Schedule of Dollar-Related Findings) we reduced the total amount of questioned cost by the $123,951 cost of the INS and EOIR administrative space. The Contracting Officer should determine whether the $123,951 is a fair and reasonable price for the administrative space and make an adjustment if appropriate.

  3. During the period under review, the prison paid to correctional officers an out-of-court settlement of $545,244 as a result of a dispute over pay for duty time during mandatory meetings. The settlement applies to FY 2000 and to two prior years. Because the settlement is inherently part of the officers' pay, we are not questioning the settlement. Instead we qualify our acceptance of these costs and refer them to the Contracting Officer for final disposition.

  4. Correctional officers are entitled by union agreement to meals. The cost of their meals is appropriately included in the jail day rate calculation in accordance with OMB Circular A-87. However, other county and federal employees working within the prison also were permitted to have meals at the prison's expense. Since the cost of meals served to other county staff and federal employees is not provided for in OMB Circular A-87, the costs of the meals provided should be offset against the total food expenditures of the prison. Because there were no daily meal logs or other record indicating which staff members were provided meals, or how often, the cost to offset these meals could not be determined. Therefore we qualify our acceptance of these costs and refer them to the Contracting Officer for final disposition.

  5. OMB Circular A-87 provides that total costs are to be net of applicable credits. We identified revenue accounts that should offset the total operating costs of the prison by $1,498,984. These revenues included $600,000 from the Outmate Program, $26,384 from food rebates, and $872,600 from INS reimbursement for services such as out-of-prison medical care and translators. The medical reimbursement account is a direct reimbursement from the INS and the USMS to cover medical care for federal prisoners outside the scope of the agreement. Participating county prisoners earn revenue for the prison through the Outmate Program, but the program does not benefit federal detainees. Suppliers provide the prison with rebates for volume purchases of food. The INS reimbursement expense account covers services to federal prisoners over and above the coverage provided for in the agreement.

Detention Services Cost Statement

Although we determined an audited jail day rate of $37.07 for York's FY 2000, we also reviewed the FY 1999 data that York used to support the current IGA with the INS. In completing its cost statement, York understated its average daily prison population. Understating the average daily population resulted in increasing the rate at which the INS reimbursed York for housing federal detainees. York stated an average daily population of 996 which, when divided into its stated 1999 operating costs for the prison, yielded a jail day rate of $60. We examined the prison's inmate counts for 1999 and determined that the actual average daily population was 1,544, or 548 more inmates housed per day on average than York had stated to the INS. The prison warden told us that because the INS guaranteed York a daily average of only 100 federal detainees, he thought it was fair to add only 100 to the county prisoner population rather than use the actual count. By dividing the actual average daily population into the prison's reported 1999 operating costs of $21,812,405, the jail day rate as awarded would have been $38.70 instead of $60, which was an overstatement of $21.30 per prisoner per day.

Outmate Program

York's Outmate Program permits county prisoners, but not federal detainees, to work full-time through work release. York officials informed us that in FY 2000 an average of 125 prisoners per day participated in the program. We did not allow $28,537 for trailer rental for the program during the last four months of the year, nor did we allow $118,767 for salaries and $37,293 in benefit costs for the three full-time correctional officers assigned to the program. Also, as discussed in note 5 on page 8, we offset $600,000 in revenue from living expenses that program participants paid to York from their work release wages. Such room and board payments to York by program participants from their outside employment provides revenue that helps offset the prison's operating costs.

INS and EOIR Administrative Space

York provided administrative space for about 30 INS and EOIR employees involved in deportation, detention and adjudication activities (15,950 square feet in the prison and 1,444 square feet in a historic farmhouse based on information provided to us by York) and for two administrative courts and associated support space for the EOIR (4,032 square feet). Rather than securing administrative space through a rental agreement, the INS on its behalf and on the behalf of the EOIR, included the costs in the jail day rate. The INS and the EOIR should reimburse York for the costs of providing office and administrative space. However, such costs are not properly included as care and housing of INS detainees and should not be paid through the jail day rate.

The Federal Grant and Cooperative Agreement Act of 1977 (P.L. 95-224) requires that contracts, grants, or cooperative agreements be used to obtain services from State and local governments. The Department is authorized to enter into contracts and cooperative agreements with State and local governmental entities for the care and housing of federal detainees pursuant to 18 U.S.C. 4013(a). The INS has authority pursuant to 8 U.S.C. 1103(a)(9) "to make payments from funds appropriated for the administration and enforcement of the laws relating to immigration, naturalization, and alien registration for necessary clothing, medical care, necessary guard hire, and the housing, care, and security of persons detained by the Service pursuant to Federal law under an agreement with a State or political subdivision of a State."

In 1982 the Director, Office of Management and Budget, issued an exception that allowed the INS, USMS, and BOP to forego contracts, grants, and cooperative agreements and enter into IGAs with State and local governments for the provision of prisoner detention services. The exception only extended to the reimbursement of the cost of detention services for federal prisoners. Therefore, it was not intended for the jail day rate to pay for administrative space.

Since the INS and the EOIR administrative space is being paid for through the jail day rate, the amount paid for the space may fluctuate based on the total prison population, the number of the INS detainees, and total allowable costs. Because the costs of detention services and the number of the INS detainees housed are unrelated to the cost per square foot of administrative space, the jail day rate is not a reasonable vehicle for reimbursement to York. The INS already recognizes that certain services such as translators and outside medical care should be paid directly based on the actual cost of those services rather than through the jail day rate. Administrative space should be obtained through other direct methods such as the cost of square footage. In our judgment, the costs associated with maintaining the INS and the EOIR administrative space should not be included in the calculation of the jail day rate.

Based on information provided to us by York, we determined the portion of the prison's 376,100 total square feet of space used for the INS and the EOIR administrative activities. Accordingly, we excluded from our calculation of the audited jail day rate a total of $123,951 for depreciation (except for the fully depreciated farmhouse), utilities, maintenance and repairs, and janitorial services associated with the administrative space used by the INS and the EOIR. Because the INS and the EOIR should reimburse York for providing administration space, we are not including the $123,951 in the questioned costs total.

Conclusion

Primarily because it inaccurately stated the prison's average daily population, York overcharged the Department of Justice $6,168,546 for detention services in York's FY 2000. This overcharge is based on our audited jail day rate of $37.07. Applying our results to FY 2001 would result in savings of about $6.4 million. For purposes only of calculating questioned costs, we are allowing $123,951 in costs associated with the INS/EOIR administrative space. Consequently, we are questioning $6,044,595 of the total overcharge.

Recommendations

We recommend that the INS:

  1. Remedy questioned costs of $5,994,094 resulting from the overstated jail day rate.

  2. Coordinate with the USMS to negotiate a revised jail day rate with York County Prison based on the information in this report.

  3. Coordinate with the EOIR and assess other legal methods of paying for the space used by the INS and the EOIR for administrative and adjudication purposes.

We recommend that the USMS:

  1. Remedy questioned costs of $49,340 resulting from the overstated jail day rate.

We recommend that the Bureau of Prisons:

  1. Remedy questioned costs of $1,161 resulting from the overstated jail day rate.

Auditee Comments

We conducted an exit briefing with representatives from York, the INS and USMS. We discussed how we determined the audited jail day rates for the facility, including our computations for the overpayments. During the exit conference, the warden of the York County Prison reiterated that the average daily prison population stated on the INS cost sheet supporting the IGA was based on only 100 federal detainees over the county prison population rather than the actual population because 100 detainees were all that the INS guaranteed. He also said that he reports to the Commonwealth of Pennsylvania a jail day rate of $38.58 based on actual operating costs and fringe benefits. York officials provided no other comments on the audit results.


Footnotes

  1. Calendar Year 2000 was a leap year and therefore had 366 days.
  2. Depending on the Contracting Officer determinations, referenced in Notes 2, 3, and 4 on page 7 of this report, actual allowable costs could decrease resulting in additional overpayment.