STATEMENT ON MANAGEMENT CONTROL STRUCTURE
In planning and performing our audit of the BOP's CCC Program, we considered the BOP's management control structure for the purpose of determining our auditing procedures. This evaluation was not made for the purpose of providing assurance on the BOP's management control structure as a whole. However, we noted a matter that we consider to be a reportable condition under Government Auditing Standards.
Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the management control structure that, in our judgment, could adversely affect the BOP's ability to effectively manage its CCCs. We identified a weakness in the area of controls over the interpretation of the subsistence waiver policy (see page 7 of this report). We also noted a matter involving the management control structure and its operation that we did not consider significant enough to warrant a recommendation. This matter is included in the OTHER REPORTABLE MATTER section of this audit report.
Because we are not expressing an opinion on the BOP's management control structure as a whole, this statement is intended solely for the information and use of the BOP in managing its CCC Program. This restriction is not intended to limit the distribution of this report, which is a matter of public record.
STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS
We have audited the BOP's CCC Program. The period covered by the audit included CCC operations for FY 1994 and the first quarter of FY 1995, and included a review of selected activities and transactions.
In connection with the audit and as required by the standards, we tested transactions and records to obtain reasonable assurance about the BOP's compliance with laws and regulations that, if not complied with, we believe could have a material effect on program operations. Compliance with laws and regulations applicable to the CCC Program is the responsibility of BOP management.
An audit includes examining, on a test basis, evidence about laws and regulations. The specific laws and regulations for which we conducted tests are contained in:
parts of the Federal Acquisition Regulation (Title 48, Code of Federal Regulations) governing Acquisition Planning, Contracting Methods, Socioeconomic Programs, and Clauses;
the Federal Managers' Financial Integrity Act of 1982;
18 USC 4082, Commitment and Transfer, as amended, authorizes the Attorney General to collect such costs incident to the prisoners confinement, and authorizes prisoners to work at paid employment or participate in training programs; and
18 USC 3621(b), Prison Placement, authorizes the BOP to designate the place of the prisoner's imprisonment and direct the transfer of a prisoner from one penal or correctional facility to another.
The results of our tests indicated that for the items tested, the BOP complied with the laws and regulations cited above. With respect to those transactions not tested, nothing came to our attention that caused us to believe that BOP management was not in compliance with laws and regulations cited above.
PERCEPTIONS OF SERVICE PROVIDERS
We interviewed 2 corporate officers, 13 directors, 10 assistant directors, 19 case managers, and 11 counselors. The information presented below is based on a compilation of opinions by managers and staff at 13 CCCs of the services provided. Specifically, we interviewed CCC staff regarding their opinions on: (1) how they met program goals, (2) the adequacy of job placement, (3) the sufficiency of CCC staff coverage, (4) the utilization of bed space, and (5) ways to streamline and improve the program.
The 13 CCCs met the BOP's goal to provide federal prison inmates a suitable alternative to prison. Besides costing less, CCCs provided an environment that allowed inmates to re-establish themselves in the community, obtain employment and housing, and renew family relationships.
Community Corrections Centers conducted orientation sessions for new inmates, including an initial assessment of the inmate's training, experience, and skills. However, the degree of assistance provided to the inmates in finding jobs varied among CCCs.
Inmates were expected to secure full-time employment within 15 working days of arrival at the CCC. Most CCC personnel considered 15 working days as adequate. Community Corrections Center personnel believed success in obtaining a job depended on the inmates' education, training, job history, personal initiative, local employment rate, and connections in the community. One case manager claimed 15 days was adequate only if the inmate had a skill or profession.
Community Corrections Center managers said it was the inmates' responsibility to find jobs; however, staff at nearly all of the CCCs referred inmates to external employment resources. These included state employment offices, temporary employment agencies, and listings of employers who had hired inmates in the past.
The inmates obtained jobs ranging from laborer to professional. The majority of inmates obtained minimum wage jobs in unskilled or semi-skilled positions. At one CCC, a resident advisor told us the "life skills" training helped inmates who had no real skills or who had not held a job before their prison term. One Assistant Administrator stated "inmates have to be realistic" about their job opportunities.
Inmates who did not try to find employment could have been returned to prison. However, CCC personnel said inmates were rarely returned for failing to obtain a job. If an inmate had difficulty finding a job, the CCC's counselors assisted the inmate. As long as the inmate made an effort to find a job, the managers requested an extension of stay from the BOP. The BOP Community Corrections Managers' made the final determination as to whether unemployed inmates remained at the CCCs or were returned to prison.
Staffing and Occupancy
All 13 CCCs were staffed to provide 24-hour coverage. Forty-six of the 55 CCC personnel we interviewed believed the staffing levels required by the BOP met the needs of the inmates. They also believed strongly that any reduction in current staffing levels would adversely affect the quality of services.
Bed utilization at the CCCs is a key factor for financial viability. CCC personnel said their occupancy rates had fluctuated in the past, but recent referral rates were near, and sometimes met, the rate of their contract with the BOP. Even though occupancy rates generally were high, 5 of the 13 managers said their bed space was under-used. One manager said a steady occupancy rate would help retain qualified and committed personnel.
About half of the CCC personnel expected an occupancy rate between 80 to 90 percent. Two CCC managers claimed the BOP's requirement that 20 percent of the CCC population be placed on home confinement had an adverse effect on their bed occupancy rate. These managers had very low occupancy rates and were losing money. Because the BOP only paid one-half the rate for inmates on home confinement, the managers' ability to retain inmates in the CCCs became even more critical. According to one manager, 20 percent should be the home confinement goal, not the quota. He further claimed that in order to meet the quota, the BOP required the manager to place inmates on home confinement that were not ready. Some of these inmates were subsequently returned to the CCC.
Streamlining and Improving Programs
Fifty-two of the 55 CCC personnel were satisfied with the working relationships they had with the BOP. Further, CCC staff believed disputes or deficiencies were resolved promptly and reasonably.
Personnel at 4 of the 13 CCCs commented that some inmates were transferred to them without the proper documents to begin work (e.g. social security card, birth certificate, driver's license, etc.). Without these documents, employment could be delayed up to 4 weeks. One CCC staff person suggested upgrading the "life skills" training components to better match inmate needs. Personnel at another CCC said they had to improve their relationship with outside employers. Finally, the CCCs' personnel expressed a need for a full-time vocational counselor. Several CCC personnel suggested the Community Corrections Program could be improved by:
better informing BOP inmates on what to expect at the CCCs,
ensuring inmates had adequate time remaining on their sentences to receive the full benefit of the CCC's Program,
encouraging inmates to begin their job search prior to leaving the institution, and
involving contractors in planning the next revision to the statement of work.
AUDIT SCOPE AND METHODOLOGY
Our audit objectives were to: (1) identify ways to increase efficiency and effectiveness in CCC operations, and (2) evaluate processes for negotiating, awarding, and monitoring contracts. We focused the audit on CCC operations for FY 1994 and the first quarter of FY 1995. We conducted audit work at BOP Headquarters and at the following locations:
BOP Community Corrections Offices in Atlanta, GA; Baltimore, MD; Chicago, IL; Dallas, TX; Detroit, MI; El Paso, TX; Miami, FL; Montgomery, AL; New York City, NY; and Phoenix, AZ; and,
Federal Correctional Institutions in Anthony, TX (La Tuna); Butner, NC; Milan, MI; Petersburg, VA; and Phoenix, AZ; and,
Community Corrections Centers in Albuquerque, NM; Atlanta, GA (2 locations); Chicago, IL; Grand Rapids, MI; Hutchins, TX; Manhattan, NY; Miami, FL; Mobile, AL; San Diego, CA; Savannah, GA; Tucson, AZ; and Washington, DC.
We conducted the audit in accordance with Government Auditing Standards and included such tests of program records as we considered necessary.
To identify ways to increase the efficiency and effectiveness of the BOP's operations, we identified procedures to determine if: (1) CCCs were operating at full bed capacity during FY 1994 and the first quarter of FY 1995, and (2) BOP Community Corrections Managers' were properly interpreting and applying the subsistence collection policy. We analyzed statistical reports to determine the CCCs' budget and expenditures for FY 1992 through the first quarter of FY 1995. We then interviewed BOP staff to obtain an understanding of CCC operations and services. We also explored opportunities for savings that could be achieved through increasing the use of CCCs. We evaluated BOP operational and program reviews to verify the reviews were performed in accordance with guidelines.
To evaluate the process for negotiating, awarding, and monitoring contracts, we identified major procurement procedures and controls which should be followed. We then interviewed staff to obtain an understanding of the procedures and controls used. The BOP awarded 30 contracts during FY 1994, totaling about $19 million. We tested 11 contracts, totaling about $9 million, to verify the actual procedures followed. For contract monitoring, we accompanied BOP personnel on two full monitoring reviews. We observed BOP's review and testing of contractor controls and procedures for reporting, collecting, and verifying subsistence payments. We then tested those controls and procedures at three CCCs.
PRIOR AUDIT HISTORY
In 1986, the Justice Management Division's Audit Staff, predecessor to the OIG, Audit Division, audited BOP's processes for administering Community Treatment Center contracts. The Audit Staff's report identified needed improvements in: (1) management oversight and training for procurement staff, and (2) internal controls over contracting duties.
In 1989, the OIG followed up on the 1986 audit. The report identified that the BOP had significantly improved its oversight of the Community Treatment Center contracting process and training. The report, however, identified additional weaknesses in: (1) contract prenegotiation, negotiation, preparation, and award; and (2) procedures for certifying invoices and performing operational reviews. We found that the BOP had taken sufficient action to correct these weaknesses.
In 1990 and 1991, the GAO found that the BOP was not making full use of available CCC beds.
In 1992, the OIG audited the BOP's CCC Program. The report identified problems in: (1) measurement of program effectiveness, (2) utilization of CCCs and home confinement, (3) documentation of resident case notes, (4) treatment of mental illness, and (5) complaint procedures.
U.S. Department of Justice
Federal Bureau of Prisons
Office of the Director Washington, DC 20534
January 31, 1996
MEMORANDUM FOR: GUY K. ZIMMERMAN, ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Kathleen M. Hawk, Director,Federal Bureau of Prisons
SUBJECT: Draft Audit Report on the Community Corrections Center Program
Thank you for the opportunity to comment on the Draft Audit Report: The Community Corrections Center Program in the Bureau of Prisons. Your staff obviously completed a thorough review of our Community Corrections Center (CCC) operations. The Bureau of Prisons (BOP) appreciates the courtesy and professionalism your staff showed at all times during the review. Your efforts will be of great service to the BOP as we guide the development of community corrections in the coming years.
In addition to making recommendations for change, the report concludes that the BOP's community corrections program is well managed and effective in providing services critical to the offender population. We gratefully acknowledge your recognition of that success.
At the request of the Administrative office of the United States Courts (AOUSC) , Federal Corrections and Supervision Division, we have included AOUSC's response to recommendations 1 and 3 as an attachment to our response.
The report makes four primary recommendations to improve the efficiency and effectiveness of program operations:
Recommendation #1 -- Negotiate a reimbursable agreement with the Administrative Office of the United States Courts (AOUSC) for the cost of supervision cases referred to CCCS.
After careful consideration, the BOP cannot accept the recommendation to require the AOUSC to reimburse the BOP for housing supervision cases in CCCs.
For at least the last twenty years, the BOP has accepted supervision cases into BOP contracted CCCs. This number has dropped in recent years as the courts have made greater use of home detention. Nevertheless, the BOP accepted approximately 3,000 supervision cases in fiscal year 1995, estimated in the Audit Report to cost $14 million.
Contrary to what is indicated in the report, accepting supervision cases is not done "to sustain a good working relationship with the Courts," although it does have that beneficial effect. The BOP accepts supervision cases because of the administrative simplicity of having one agency responsible for halfway house contracts and because the arrangement has been successful for many years. The arrangement with the AOUSC is done with the full knowledge and approval of Congress. If the AOUSC is required to reimburse the BOP for the cost of housing supervision cases in our contracted halfway houses, it would only be fair to shift part of our appropriated funds to the judiciary. The end result would not be any savings to the taxpayer, but rather a costly duplication of effort that would require the AOUSC to contract for their own services or "piggyback" our contracts.
The current arrangement has been working satisfactorily for decades. In the era of "reinventing government" through simplification and interagency cooperation to avoid duplication of effort, the recommendation to negotiate a reimbursable agreement with the AOUSC appears to be a step backwards.
The BOP contracts for halfway house space to provide a needed service in the most cost effective manner possible, not as a favor for the courts. With all respect, I cannot accept the recommendation.
Recommendation #2 -- Reemphasize utilization criteria to maximize the usage of CCC bed spaces.
The BOP supports the recommendation of the Audit Report to "reemphasize utilization criteria."
As is pointed out in the Audit Report, the BOP has set a strategic goal of referring at least 80 percent of inmates released from minimum security level facilities to a halfway house, at least 70 percent of inmates released from low security level facilities, and at least 65 percent of inmates from medium security level facilities. The Audit Report correctly points out that the BOP has not yet achieved this self-imposed goal.
The utilization rate is monitored quarterly and BOP facilities have made significant progress. In the fourth quarter of fiscal year 1995, the BOP achieved a utilization rate of 87 percent for minimum security facilities, 69 percent for low security facilities, and 61 percent for medium security facilities.
Although this is short of our goal (except for minimum security facilities), the utilization rate has improved quarterly. It has taken a while to come close to our goal, but this is more a function of setting a high standard rather than any failure of procedures.
The BOP will continue to track the utilization rate, and we will work with our wardens to ensure that each institution is making maximum effective use of the CCC program. As noted in your analysis, however, at most BOP facilities there are very few appropriate cases not referred to a CCC and there is only marginal room for improvement.
The Audit Report correctly points out that there are a number of CCCs operating below capacity. Much of what now appears to be excess capacity is the result of aggressively referring cases to home confinement.
Also several years ago, the BOP overestimated the number of beds required in light of anticipated need created by the Sentencing Reform Act, which was passed in 1984. In more recent years, the BOP has become more experienced in estimating need and the amount of unused capacity has been diminished. Nevertheless, the BOP will continue to refine its projecting methods to ensure that requested capacity does not significantly exceed need.
I would also like to comment an the assertion on page 7 that increased use of CCCs could "reduce prison overcrowding" and "achieve monetary savings." Halfway houses can have only a very limited impact on crowding. The BOP referred virtually every appropriate case to a CCC during the time frame under study (fiscal year 1994). During that year, the BOP spent all of the funds appropriated for CCCs and reprogrammed another $9 million from other accounts to refer additional offenders. Again, there are very few appropriate cases not referred to a CCC. This number is certainly too small to have any noticeable impact on prison crowding.
It is also questionable that CCCs save significant money. The BOP has emphasized the release of inmates from low and medium security facilities (the utilization rate for minimum security facilities has not been a significant issue) in order to reach more difficult cases that can still be safely placed in the community. However, CCCs are not primarily intended to save money any more than drug treatment or vocational training is intended primarily to save money.
The money spent on CCCs is money invested in offenders to help them reestablish or, in some cases, maintain community ties to improve their chances of success in the community. The goal of the BOP is to ensure that sufficient resources are available to meet the legitimate needs of the offender population.
To present achieving monetary savings as a primary purpose of community corrections, in our opinion, sets a goal that cannot be accomplished and could diminish the long term vitality of community corrections.
Recommendation #3 -- In conjunction with the AOUSC, attempt to eliminate the inequity in granting waivers to ensure that supervision cases are subject to the same subsistence collection policies as BOP inmates.
The BOP strongly supports the collection of subsistence payments to offset the cost of incarceration and we will work with the AOUSC to increase subsistence payments.
The Audit Report found that subsistence payments were more likely to be waived for supervision cases than for inmates. As pointed out in the report, in most cases this was the result of the court routinely waiving subsistence payments. Local court policy on most issues, including subsistence payments, is largely out of the control of either the AOUSC or the BOP. Nevertheless, every effort will be made with the AOUSC to ensure that subsistence is collected from supervision cases in accordance with BOP policy. The BOP will meet with representatives of the AOUSC to attempt to formulate a mutual plan to address this issue.
Recommendation #4 -- Clearly define the circumstances in which Community Corrections Managers may waive or reduce an inmate's subsistence payments.
The BOP supports the recommendation in the Audit Report.
The report points out that there is variation in the collection of subsistence payments among the BOP's own field offices. As indicated above, the BOP strongly supports the collection of subsistence payments to offset the cost of incarceration in a CCC. In fact, over $13 million was collected through this procedure last year.
The BOP will work closely with Community Corrections Mangers to ensure that subsistence is collected from inmates in accordance with BOP policy. All waivers of subsistence must be approved by the Community Corrections Manager and the collection of subsistence will be a training priority. The BOP's Program Review Division will also be asked to closely monitor subsistence waivers when auditing community corrections field offices. Finally, written policy will be reviewed and redrafted, where necessary, to clarify when the waiver of subsistence can be considered.
In conclusion, I was heartened by your overall favorable impression of the BOP's management of its community corrections operations. You noted that "CCCs were a cost-effective, safe alternative to incarceration" and that contract CCC staff "were generally satisfied with the services and the BOP's level of management and oversight." The BOP is proud of its community corrections program, and aided by the guidance provided by your report, we will continue to improve operations in the future.
Thank you again for the opportunity to comment, and we will await your final decision on whether additional action is necessary.
OIG, AUDIT DIVISION
ANALYSIS AND SUMMARY OF ACTIONS
NECESSARY TO CLOSE REPORT
1. Unresolved. BOP appears to concede that the foundation of our conclusion and recommendation is correct; namely, that BOP is absorbing a cost that rightfully is AOUSC's to pay, and that the cost approximates $14 million for some 3,000 supervision cases. BOP challenges our recommendation that it obtain reimbursement from AOUSC because this has been a long-standing practice and is known to Congress.
BOP also interposes an objection that the recommendation would require both BOP and AOUSC to engage in duplicate procurement and contract administration efforts when the existing arrangement is simpler. However, we note that the "simplicity" of the present arrangement has not deterred AOUSC from charging BOP for monitoring its home confinees. In any event, our proposal does not require duplicate contract actions and we would question the need for it when a reimbursable agreement to BOP and continuation of BOP's present system of contract management would be so much easier.
BOP's principal objection lies with the proposition that there be any form of reimbursement of the $14 million cost it incurs for AOUSC. It asserts that this arrangement exists with the full knowledge of Congress and inferentially suggests that Congress has used BOP's appropriation as a vehicle to fund this expense of AOUSC. In consequence, BOP argues that our recommendation would result in a shift of appropriations on paper only.
Our difficulty with this response is that, after reviewing recent budget submissions, we have concluded that while Congress may be aware of the practice, they may not be aware of the magnitude of BOP's financial commitment to the Courts. Further, it is clear in reviewing BOP's reprogramming request that Congress has not fully funded this program in the past and that BOP had to divert internal funds to cover the cost of AOUSC confinees in halfway houses.
We continue to believe that BOP is supplementing the appropriations of the judicial branch. In addition to raising several legal issues, we believe this to be poor practice. This recommendation can be resolved when you agree to implement the recommendation or you propose an alternative corrective action which satisfies the intent of the recommendation.
2. Resolved. This recommendation can be closed when we receive documentation showing that utilization criteria have been reemphasized to all BOP institutions.
In the response to the draft report, the BOP agrees with the finding and recommendation, but raises concerns about our conclusion. First, the BOP states that halfway houses can only have a very limited effect on (prison) crowding. However, during our audit, we determined that an average of 961 CCC bed spaces were unoccupied even though minimum security institutions were over their rated capacity by at least 1,900 bed spaces. Also, both low and medium security institutions were not meeting the BOP's goal for referring inmates to CCCs.
Second, the BOP states it is questionable that CCCs save significant money. Our statement that the BOP could achieve cost savings is based on the report Reinventing Federal Law Enforcement, Best Practices of the U.S. Department of Justice (August, 1994), page 51. The ". . . BOP has greatly expanded its use of alternative forms of confinement, including community corrections centers, . . . which on average are less costly than traditional forms of incarceration . . . ." Finally, the BOP implies we assumed that CCC's are primarily intended to save money, and that achieving monetary savings is a primary purpose of community corrections. We made no such assumptions. Our recommendation was made to improve program efficiency.
3. Resolved. This recommendation can be closed when we receive a copy of the mutual plan between AOUSC and BOP to ensure subsistence is collected from supervision cases in accordance with BOP's subsistence collection policy.
4. Resolved. This recommendation can be closed when we receive: (1) a copy of the revised subsistence waiver policy that clearly defines the circumstances in which the Community Corrections Manager may consider a reduction or waiver of subsistence; (2) documentation, such as a training agenda and schedule, that training on subsistence waivers has been provided to Community Corrections Managers; and (3) a copy of the revised procedures used by the BOP's Program Review Division to ensure that subsistence waivers were proper.