IMMIGRATION AND NATURALIZATION SERVICE
CONTRACTING FOR DETENTION SPACE

 

Audit Report 97-05, (1/97)

 

 

TABLE OF CONTENTS

 

AUDIT RESULTS

INTRODUCTION

FINDINGS AND RECOMMENDATIONS

CONTRACTING PRACTICES AND THE COSTS OF DETENTION SPACE

Contracted Detention Facilities

Intergovernmental Service Agreements

Utilization of Detention Space

Allocation of Detention Costs to the User Fee Account

Recommendations

COSTS OF CONTRACTED AND GOVERNMENT FACILITIES

Reporting Detention Costs on the INS Detention Cost Report

Compensation and Benefits Costs

Escort Duty Costs

Travel, Medical, and Contracted Detention Facility

Recognition of Expenditures

Identification of Detention Costs in FACS

Recommendation

APPENDIX I - STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS

APPENDIX II - SCOPE AND METHODOLOGY

APPENDIX III - IMMIGRATION AND NATURALIZATION SERVICE'S RESPONSE TO THE DRAFT REPORT

APPENDIX IV - AUDIT DIVISION ANALYSIS AND SUMMARY OF ACTIONS NECESSARY TO CLOSE THE REPORT

 

 


 

 

AUDIT RESULTS

The Office of the Inspector General (OIG), Audit Division, has completed an audit of Contracting for Detention Space in the Immigration and Naturalization Service (INS). Our audit disclosed that INS contracting practices for detention space were in accordance with federal guidelines. However, we identified weaknesses in the allocation of detention costs to the User Fee Account, and the reporting of detention costs. We found that:

INTRODUCTION

The objectives of the audit were: to assess INS practices in contracting for and utilizing detention space, including a review of costs for reasonableness, allowability, and allocability; and to identify and compare the costs of contracted facilities with the costs of government operated facilities.

The INS regional structure and changes to it during our testing period are described in Appendix II.

Section 242 of the Immigration and Nationality Act (the Act) authorizes the Attorney General to take into custody and detain aliens pending a determination of their deportability. The Attorney General delegated to INS the responsibility for enforcing the Act and maintaining custody of detained aliens. Under the Act, INS may detain any alien awaiting the outcome of deportation proceedings.

The INS has four sources for detention space: (1) INS owned Service Processing Centers (SPC), (2) contracts with private vendors, (3) facilities jointly operated by INS and the Bureau of Prisons (BOP), and (4) state and local jails. As of May 1996, the rated capacity2 of SPCs and contracted detention facilities was 3,506 beds. Jointly operated facilities provided 1,130 beds. Intergovernmental Service Agreements (IGA) for the use of state and local jails provided INS with a potential for 1,644 detention beds per day.3 Unlike the SPC and contract space, IGAs did not guarantee space.

 

FINDINGS AND RECOMMENDATIONS

I. CONTRACTING PRACTICES AND THE COSTS OF DETENTION SPACE

Our review of INS contracting practices for detention space disclosed that INS was generally in compliance with federal contract guidelines. We did note that the contract for the Seattle, WA, detention facility would not be cost effective if the average population of detainees fell below 123. In addition, our review of detention costs disclosed that the allocation by the INS Western Regional Office of detention costs to the User Fee Account was excessive by approximately $2 million.

The INS utilized six contracted detention facilities during FY 1994 and 1995. Five facilities were owned by the contractors, and one (Seattle, WA) was owned by INS and operated by Esmor, Inc. We reviewed contract files for the six facilities to determine if they were awarded on a competitive basis. For those contracts not awarded on a competitive basis, we reviewed the contract files to determine if the price analyses were prepared as required by the Federal Acquisition Regulations. Additionally, we reviewed INS practices for obtaining detention space from state and local governments under IGAs.

Contracted Detention Facilities

In FY 1994 INS reported $16,565,893 in costs for detention space obtained through contracts with private vendors, as shown in the table on the following page. Because contracted facilities opened and closed during the year, the actual number of contracted beds varied during the year. Currently, INS has 795 beds available at detention facilities operated by private contractors.

FY 1994 CONTRACT COSTS FOR INS DETENTION SPACE OBTAINED FROM PRIVATE CONTRACTORS

FACILITY CONTRACTOR DETENTION BEDS DAILY RATE FY 1994 COSTS4
Aurora, CO Wackenhut 300 $ 58.99 $ 4,845,018
Elizabeth, NJ Esmor 300 $ 73.67 21,438
Houston, TX CCA 160 $ 47.27 1,892,043
Laredo, TX CCA 185 $ 40.53 1,406,291
New York, NY Wackenhut 100 $113.98 5,417,263
Seattle, WA5 Esmor 150 6 2,983,840
Total   1,195   $16,565,893

(Source: FY 1994 detention cost report and detention contracts.)

 

Seattle, WA Detention Space

The INS advertised competitively for a contractor to operate an INS owned facility in Seattle, WA. The INS selected Esmor, Inc. because an analysis indicated that the Esmor, Inc. offer was the lowest of the proposals received.7

The contract with Esmor, Inc. provided detention services for a guaranteed minimum of 90 detainees per day at a facility with a rated capacity of 150 detainees. The contract established a flat daily rate of $8,548 in FY 1995 and $9,061 in FY 1996, regardless of the number of aliens in detention. As a result, the average daily cost for detaining an alien at the facility increases as the detention population decreases. At the guaranteed minimum of 90 detainees, the per alien reimbursement rate would be $100.68. At the maximum of 150 detainees, the rate would be $61.22.

We attempted to determine if the flat daily rate under the Esmor, Inc. contract was comparable to the rates for the four other contracted detention facilities. Accordingly, we computed the average daily cost per alien under the contract with Esmor, Inc. for FY 1995 and the first eight months of FY 1996.8 We then compared the average daily cost per alien with the daily fixed rates for the four other contracted detention facilities which were opened throughout FY 1995. The results of our comparison are presented in the table on the following page.

 

DAILY COST/FIXED CONTRACTED RATE CONTRACTOR OPERATED FACILITIES

Facility Rated Capacity FY 1994 FY 1995 FY 1996
Seattle, WA 150 9 $49.70 $61.22
Aurora, CO 300 $58.99 $61.88 $64.74
Elizabeth, NJ 300 $73.67 $73.67 N/A
Houston, TX 160 $47.27 $49.16 $51.12
Laredo, TX 185 $40.53 $42.56 $44.69
Average Rate (excl. Seattle)   $58.05 $59.68 $55.61

(Source: Actual contract rates.)

 

The effective rate for the Seattle, WA, detention facilities operated by contractors appeared to be reasonable when compared to other facilities. However, the effective rates for FY 1994, FY 1995, and the first 8 months of FY 1996 did not include fixed and variable facilities costs because the contract with Esmor, Inc. required that INS absorb fixed and variable costs related to the building. We could not determine the effect these fixed and variable building costs had on the effective rate for the Seattle, WA, facility because, as previously stated in this report, INS could not provide us with these costs.

The cost effectiveness of a flat daily rate contract is determined by the daily detainee rate. The contract with Esmor, Inc. would not be cost effective if the number of detained aliens dropped significantly. If the average detention rate dropped to 122 aliens per day, the effective daily detention rate would be $74.27, based on the current contracted flat rate of $9,061, and would exceed the rates for the other four detention facilities. It is obviously to the government's advantage to keep the Seattle facility filled to capacity.

Intergovernmental Service Agreements

The INS uses state and local jails to augment detention space. It obtains this space through IGAs negotiated between INS and state and local governments and IGAs negotiated by the United States Marshals Service (USMS)10.

In FY 1994 INS used 466 state and local jails under IGAs. Under the IGAs INS reimbursed the state and local governments based on fixed daily rates for each alien detained. The INS also reimbursed state and local governments for additional costs, such as medical and travel, that were specified in the IGAs. In FY 1994 the average daily rate of the 466 IGAs was $51.38 per day while the average negotiated rate for contracted detention space was $55.11 per day. The IGA average was lower than the average for detention space obtained through contracts with vendors. However, it is not possible to compare the two costs because of medical and travel costs that may be charged to the IGAs.

Utilization of Detention Space

In FY 1995 INS operated nine SPCs with a combined rated capacity of 2,549 detention beds. The INS also used joint federal facilities with the BOP at the Oakdale Federal Detention Center in Louisiana (630 beds) and the criminal alien contract facility in Eloy, Arizona (1,000 beds, 500 INS and 500 BOP). Expansion initiatives were underway at the El Paso and Krome SPCs. Additionally, funds were allocated to build a detention facility in Buffalo, NY, providing 100 beds for the INS and 150 beds for the USMS.

To assess the extent to which the INS detention capacity was used, we reviewed average monthly population from the INS FY 1995 Detention Status Report. We determined that the average detainee population for these detention facilities ranged from a low of 85 percent in the Central Region to a high of 100 percent in the Eastern Region with an overall average of 94 percent of rated capacity. The percentage of occupancy is presented in the table on the following page.

 

UTILIZATION OF DETENTION CAPACITY FOR FY 1995

Regional Office Percent of Capacity
Eastern 100
Central 85
Western 99
Average INS 94

(Source: The INS FY 1995 Detention Space Status Report.)

 

We discussed the utilization rate for the INS Central Regional Office with the Assistant Regional Director for Detention and Deportation. The Assistant Regional Director told us that Central Regional Office detention facilities were not used to full capacity because the regional office was not budgeted with sufficient funds to utilize the full capacity of these facilities. A similar issue for other INS offices was identified in our audit on INS Select Enforcement Activities.11 As stated in that report, INS officials indicated that, although detention beds may be available under local agreements, funds are not always available to utilize these beds to the fullest extent.

Allocation of Detention Costs to the User Fee Account

The 1986 Omnibus Appropriation Bill, Public Law (P.L.) 99-591, established a fee to be collected from passengers arriving at a port of entry in the United States or for the preinspection of passengers in a place outside the United States prior to arrival aboard a commercial aircraft or commercial vessel. P.L. 99-591 required the fees to be deposited in a separate account, called the User Fee Account, within the general fund of the Treasury of the United States. The law authorized the use of User Fee Account funds for expenditures incurred in providing detention and deportation services for excludable aliens arriving on commercial aircraft and vessels.12

We reviewed FY 1994 and 1995 costs for INS detention facilities to determine if the costs were reasonable, allowable, and allocable. Additionally, we reviewed the INS methodologies for allocating FY 1995 obligations to the User Fee Account for the Eastern, Central, and Western Regional Offices.

In conformance with P.L. 99-591, the methodology for allocating the initial detention obligations to the User Fee Account for the Eastern and Central Regional Offices was based on the detention days incurred for qualified excludable aliens. However, the methodology used for the Western Regional Office did not appear to be in conformance with P.L 99-591. The INS officials from the Western Regional Office told us that they allocated FY 1995 obligations based on prior years' experience. However, they did not provide the requested documentation to support their methodology. The OIG reported a similar finding for INS as a whole in our audit of the INS fee accounts.13 In the Commentary and Summary section of that report, the auditors stated: "Management has not developed a reasonable and systematic process for the field offices to allocate expenses between the Basic Appropriation Account and the Fee Accounts."

To assess the reasonableness of the Western Regional Office's allocations of obligations for detention costs to the User Fee Account, we judgmentally selected detention statistics and obligations for the months of January, March, and May 1995. For these months, the INS Western Regional Office had 200,625 detention days, of which 29,671 (15 percent) were for detaining excludable aliens. Western Regional Office obligations for detention and deportation were $7,204,452, of which $3,159,650 (44 percent) was allocated to the User Fee Account. Had the regional office used the 15 percent allocation based on the statistics, $1,080,668 would have been allocated to the User Fee Account. Therefore, INS over-allocated $2,078,982 ($3,159,650 minus $1,080,668) in obligations to the User Fee Account. To be in compliance with the P.L 99-591, INS must develop an allocation methodology for the Western Regional Office to ensure only those detention and deportation costs reimbursable from User Fees are allocated to the User Fee Account.

*         *          *

Generally, INS practices for awarding detention contracts were in accordance with the prescribed policies and procedures governing contracting for services under Part 15 of the Federal Acquisition Regulations. However, the reimbursement method for the INS contract in Seattle, WA, would not be cost effective if the facility was not adequately utilized. In general, INS practices for obtaining and using IGAs were appropriate. The detention space obtained through contracts and SPCs was utilized at adequate levels. Detention costs were reasonable, allowable, and allocable based on the contracts. However, we found the INS Western Regional Office over allocated detention obligations totalling $2,078,982 to the User Fee Account.

Recommendations

We recommend that the Commissioner, INS:

  1. Take steps to assure maximum utilization of the Seattle, WA detention facility and any other such facility contracted for on the basis of a flat daily rate.
  2. Allocate the cost of detention for the Western Region to the User Fee Account based on the costs of detaining excludable aliens who arrive on commercial aircraft and vessels as stated in P.L. 99-591.

 

II. COSTS OF CONTRACTED AND GOVERNMENT FACILITIES

Reported costs for INS owned detention facilities could not be verified to the actual costs. This was because INS did not accurately and consistently report the SPC detention costs in the FY 1994 INS detention cost report and because accounting reports did not identify all detention costs by detention facility. As a result, we could not compare the costs of contracted detention facilities with the costs of government owned detention facilities to determine the cost benefit of one versus the other.

Reporting Detention Costs on the INS Detention Cost Report

The INS' FY 1994 detention cost report identified costs totalling $91,229,742 as follows:

 

Type of Facility FY 1994 Costs
SPCs $47,575,690
IGA Space 27,088,159
Contracted Facilities 16,565,893
Totals $91,229,742

(Source: FY 1994 The INS detention cost report.)

 

The detention cost report is designed to be used by INS management for:

The INS detention cost report is supposed to be based on detention statistics maintained by each INS Regional Office and detention costs extracted from FACS. Each region is responsible for preparing its segment of the report. In FY 1994 the INS Eastern, Northern, Southern, and Western Regional Offices prepared and submitted to Headquarters segments of the INS detention cost report.14 INS Headquarters prepared a consolidated detention cost report from the regional segments. However, these reports were prepared using different criteria; therefore, a meaningful comparison or analysis of the detention costs is impossible.

The FY 1994 detention cost report was materially inaccurate because it did not properly identify SPC detention costs. Additionally, some detention costs, such as travel and medical costs, were omitted from the report. Also, INS regional offices used different methods for recognizing and reporting detention costs because INS had established neither criteria for recognizing costs nor a standard methodology for preparing the report.

The FY 1995 detention cost report was provided by INS at the exit conference. We did not review the FY 1995 report because it was not available during our audit. However, INS officials stated that the FY 1995 report was likely to contain the same types of errors that we disclosed for the FY 1994 report.

 

Compensation and Benefits Costs

We compared compensation and benefits costs reported in the INS detention cost report to costs reported in FACS. Since FACS is the primary accounting system for INS, it should be the basis for the INS detention cost report. Any differences between the INS detention cost report and FACS should be reconciled prior to issuance of the report. Our audit disclosed approximately $4 million of differences between the FY 1994 detention cost report and FACS. These differences are presented in the table on the following page.

 

COMPARISON OF COMPENSATION AND BENEFIT COSTS REPORTED ON THE INS DETENTION COST REPORT WITH COMPENSATION AND BENEFIT COSTS EXTRACTED FROM FACS FOR FY 1994

Location Reported Amount Column (a) FACS Amount Column (b) Difference Column a - b
Boston, MA $ 2,489,650 $ 2,432,292 $ 57,358
New York, NY 5,566,085 5,030,729 535,356
Aguadilla, PR 766,454 793,699 -27,245
Total Eastern Region $ 8,822,189 $ 8,256,720 $ 565,469
Krome, FL $ 7,678,586 $ 6,168,326 $ 1,510,260
El Paso, TX 3,597,004 3,294,331 302,673
Port Isabel, TX 5,188,450 4,592,580 595,870
Total Southern Region $16,464,040 $14,055,237 $ 2,408,803
El Centro, CA $ 4,747,512 $ 5,723,174 $ -975,662
Florence, AZ 3,659,829 3,680,105 -20,276
San Pedro, CA 3,112,696 3,133,233 -20,537
Total Western Region $11,520,037 $12,536,512 $-1,016,475

(Source: The INS detention cost report and FACS.)

 

We asked INS officials to explain the $4 million in differences identified in the table above. INS officials told us the files might have been updated after the close of the fiscal year, the records and computations supporting the INS detention cost report were not available, and the employee who prepared the INS detention cost report was no longer available.

 

Escort Duty Costs

Escort duty costs are associated with SPC guards escorting detained aliens outside the SPC. Such duties included escorting detained aliens between the initial point of incarceration and the SPC and among SPCs. In the INS FY 94 detention cost report, escort duty costs were subtracted from the total compensation and benefits charged to the SPC prior to calculating the daily cost per alien for the SPC.

We reviewed the methodology used for identifying and reporting escort duty costs for the Eastern, Southern, and Western INS Regional Offices.15 The Eastern and Southern Regional Offices used different methodologies to calculate escort duty costs and the Western Regional Office reported no escort duty costs. The Eastern Regional Office identified escort duty costs based on 20 percent of compensation and benefits. The Southern Regional Office officials stated they relied upon information provided by the SPCs; however, they could not provide documentation to support their calculations.

The INS should identify and allocate the costs of escort duty between the detention and deportation programs based on the benefits received by each program. Such an allocation is necessary to assure allocable escort duty costs are included in the cost of detention.

 

Travel, Medical, and Contracted Detention Facility Costs

Recognition of Expenditures

Our review disclosed that INS regional offices did not recognize detention costs on a consistent basis. The INS Eastern Regional Office reported detention costs based on obligations. The Northern Regional Office reported costs as an estimate of anticipated costs based on detention day rates and detention days. The Southern and Western Regional Offices reported only those costs for which a disbursement had been made.

Identification of Detention Costs in FACS

The INS understated SPC cost for FY 1994 because costs of $4,538,911 for contracted guard services at SPCs were not identified by the SPC within FACS nor contained in the detention cost report. These costs were charged within FACS against the regional office rather than the detention facility because the regional office held budget authority. The INS officials told us these transactions could have been coded in a manner to identify both the budget holder and the SPC that incurred the charges.

In our judgment detention transactions should be coded so that all detention costs can be identified for the SPC that incurred the costs.

*         *          *

In conclusion we identified material differences between the INS detention cost report and FACS. We found INS did not establish criteria for identifying and reporting the escort duty costs in the INS detention cost report. Additionally, INS did not establish and implement procedures to ensure that all relevant detention costs would be reported in the INS detention cost report. The INS Western and Southern Regional Offices did not recognize detention costs based on all costs incurred for the fiscal year. Finally, the INS detention cost report did not report the costs for SPC guard contracts because these costs were not broken down by SPC within FACS.

Because of deficiencies in the INS detention cost report, the report could not be used by INS management to effectively monitor and control detention costs, assure that the detention program had sufficient funding, project and budget future detention funding needs, and determine what types of detention space should be added to meet the increasing need for additional alien detention space.

Recommendation

We recommend that the Commissioner, INS:

3. Establish a methodology and implement procedures to ensure that detention costs reported in the INS detention cost report are accurate, complete, and consistent.

 


1     The purpose of the INS detention cost report is to provide INS management with total detention days, individual detention rates, and total detention costs for each detention facility for the fiscal year. We did not test the FY 1995 detention cost report because it was not available at the time of our audit. The report was provided to us at the exit conference. INS officials stated that the FY 1995 report was prepared based on the same methodology used for the FY 1994 report, and that the FY 1995 report was likely to have the same errors that we identified in the FY 1994 detention cost report.

2 The rated detention capacity for SPCs is the optimum capacity based on standards developed by the American Correctional Association.

3 Based on a 1994 INS estimate of 600,000 detention days per year divided by 365 days. Because the 1995 INS detention cost report was not available as of May 1996, more current information on IGA bed space was not available.

4 FY 1994 costs for contracted detention facilities are not equal to contracted detention beds times the contracted daily detention rate times 365 days because the contracted detention facilities were not operated at 100 percent of capacity. In some instances, facilities were operated above the contracted capacity. Additionally, the FY 1994 costs reported by INS for Aurora, CO; Houston, TX; Laredo, TX; and Seattle, WA did not include unliquidated obligations because, as reported in Finding II of this report, the INS Southern and Western Regional Offices omitted unliquidated obligations from costs reported for their segments of the FY 1994 INS detention cost report.

5 FY 1994 detention costs reported in the detention cost report do not include fixed and variable building costs allocable to the detention of aliens. INS Western Regional Office officials maintain that the contractor was responsible for these fixed and variable costs; however, the contract between INS and Esmor, Inc. states that these costs will be absorbed by INS. In May 1996 we requested that INS provide us with cost data on fixed and variable building costs for the Seattle, WA contracted detention facility; however, INS officials told us that data on fixed and variable building costs for the Seattle facility were not available.

6 The contract between INS and Esmor, Inc. called for reimbursement based on a flat daily rate of $8,548 regardless of the actual number of aliens detained. The current contract rate for FY 1996 is $9,061.

7 INS officials told us that they planned to negotiate future detention contracts using a flat daily rate for a guaranteed minimum number of detainees.

8 We computed an average daily cost per alien of $49.70 for FY 1995 using the FY 1995 contracted daily reimbursement rate of $8,548 divided by the average population of 172 aliens as reported in statistics compiled by the contractor. In May 1996 INS provided us with updated detention data for the first 8 months of FY 1996. Based on this data, the average daily detention for the first 8 months of FY 1996 was 148 detainees per day. The INS contract with Esmor, Inc. called for the daily flat reimbursement rate to increase to $9,061 in FY 1996; therefore, the effective daily rate of for the Seattle, WA contracted detention facility was $61.22 ($9,061 divided by 148 detainees) for the first 8 months of FY 1996.

9 In order to calculate an effective rate we requested FY 1994 daily detention statistics from INS; however, INS officials told us that they could not locate these statistics.

10 The Office of Management and Budget (OMB) authorized the use of IGAs in 1982 to meet law enforcement agency needs for detention space. The INS, USMS, and BOP enter into agreements with state and local governments for detention services. The INS and the BOP also make use of the detention space obtained under the IGAs awarded by the USMS. For 1996 it is anticipated that the USMS will have almost 1,000 IGAs.

11 Office of the Inspector General Audit Report 95-30, Immigration and Naturalization Service Select Enforcement Activities, dated September 1995.

12 P.L. 99-591 also authorizes reimbursements from the User Fee Account for providing immigration inspection and preinspection services for commercial aircraft or vessels; providing overtime immigration inspection services for commercial aircraft or vessels; administration of debt recovery, including the establishment and operation of a national collections office; expansion, operation, and maintenance of information systems for nonimmigrant control and debt collection; and detection of fraudulent documents used by passengers traveling to the United States.

13 Audit Report Number 95-2A, Immigration and Naturalization Service Fee Accounts Fiscal Year 1993, dated November 1994.

14 In FY 1994 the INS eliminated the Northern Regional Office, and in FY 1995 the INS Southern Regional Office became the INS Central Regional Office as result of the INS reorganization.

15 There were no SPCs located in the Northern Region for FY 1994.

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