The Department of Justice (DOJ) is responsible for confining federal detainees awaiting trial and sentencing. Federal detainees are generally individuals housed in jails while awaiting trial or sentencing. In contrast, federal prison inmates are generally individuals serving a sentence of imprisonment after conviction for a violation of the federal criminal code. According to the DOJ strategic plan, two strategies to achieve DOJ’s confinement responsibilities are to:

• Acquire needed detention space through a multi-pronged approach that includes agreements with state and local governments, contracts with private vendors, construction and operation of federal detention facilities, and the use of alternatives to detention; and

• Improve management of detention resources through more accurate forecasting of detention needs, better coordination, strengthened oversight, and other means.

Two DOJ components have key roles in the detention of federal detainees – the Office of the Federal Detention Trustee (OFDT) and the United States Marshals Service (USMS).

Role of OFDT

Historically, federal detention within DOJ was the responsibility of both the USMS and the Immigration and Naturalization Service (INS). The OFDT was created in fiscal year (FY) 2001 to manage DOJ’s detention resources and coordinate its detention activities.²³ In March 2003, the INS was transferred into the Department of Homeland Security (DHS). Much of the INS detention responsibilities were included in DHS’s Bureau of Immigration and Customs Enforcement (ICE). As directed by Congress, the initial objective of the OFDT was to centralize responsibility for detention in order to better manage and plan for needed detention resources without unwanted duplication of effort or competition with other DOJ components.

Beginning in the spring of 2003, OFDT and ICE officials met to discuss centralized oversight of detention by the OFDT through the formation of an Interagency Agreement (IAA), but they could not agree on the terms. Consequently, in September 2003 the Office of Management and Budget helped with the negotiations, and in November directed ICE to sign an IAA. Although the OFDT has an IAA with ICE, the OFDT stated that ICE infrequently uses OFDT’s services (e.g., negotiate and manage contracts for private detention beds). According to the OFDT, it has no leverage to force ICE to use its services.

Role of the USMS

The USMS is responsible for housing and transporting federal detainees from the time they are brought into federal custody until they are either acquitted or incarcerated.²⁴ As shown in the following graph, due to the shortage of federally owned detention space, the USMS heavily depends on state and local governments to provide detention space and services:

Type of Facility

[Image Not Available Electronically]

Source: OFDT

As of February 2006 the USMS had approximately 1,600 active Intergovernmental Agreements (IGA) with state and local governments to rent jail space.

Funding Detention Growth

A significant challenge presented by rising detention populations is DOJ’s ability to obtain affordable bed space for individuals housed in non-federal facilities. The cost of detention has been rising rapidly, and during FYs 2003 – 2005 the funds budgeted for detention fell short of the amount needed to fully fund the DOJ’s detention activities. DOJ officials attributed the shortfalls to significantly inaccurate budget projections. According to these officials, new law enforcement initiatives, policies, and laws caused an increased number of arrests, which exceeded the forecasts used to calculate budget requests. The following table compares the detention budget and average daily population from FY 2002 to FY 2006.²⁵

Comparison of Detention Funding and Average Daily Population

The table shows that while the detention budget and average daily population increased at about the same rate from FY 2002 to FY 2003, $40 million in supplemental funding was needed to rectify the shortfall. From FY 2003 to FY 2004, the average daily population increased 12 percent, while the detention budget was initially funded at $8 million less than the previous year’s budget including the supplemental funding. As a result, in FY 2004 $109 million had to be reprogrammed from other Department accounts to fund the detention shortfall. In FY 2005, the average daily population increased 8 percent, while the initial detention budget decreased 4 percent from total FY 2004 funding. In an effort to manage the shortfall, the OFDT imposed a temporary moratorium on new IGAs and on rate increases on February 4, 2005. The OFDT lifted the moratorium in June 2005, when the FY 2005 shortfall was eliminated with the receipt of $184 million in supplemental funding. In FY 2006, the detention budget was funded at $1.16 billion, which was a 10 percent increase over the total FY 2005 funding.

Almost 75 percent of the DOJ’s detention budget is spent on IGAs. As shown in the following chart, IGA costs rose at a faster rate than the average daily population during FYs 2001 – 2004, but slowed during FY 2005 in part due to the OFDT’s moratorium.

Comparison of IGA Total Expenditures
and Average Daily Population (ADP)

[Image Not Available Electronically]

Source: OFDT

According to the OFDT, its efforts to reduce detention costs focused on decreasing the amount of time individuals spend in detention after sentencing. As discussed in this report, we also believe that the OFDT and USMS could realize significant additional cost savings if they addressed deficiencies in how prices are set in individual IGAs established with state and local law enforcement agencies for detention bed space.

Establishing an IGA

IGAs are initiated by a USMS district office based on the district’s need for detainee bed space.²⁷ According to a USMS Detention Facility Contracting Policies and Procedures Directive, each United States Marshal (USM) should assess their district detention requirements and: (1) identify potential state or local detention facilities that meet USMS prisoner detention standards and are willing to support the district's detention requirements; (2) coordinate with the BOP, the Department of Homeland Security (DHS) Bureau of Immigration and Customs Enforcement (ICE), and other USMS districts to see if they have prisoner detention bed space within the district; and (3) contact facilities by location, capability, and types of detention services to determine if they are interested in housing federal detainees.

If a state or local detention facility is interested in housing federal detainees, the USM will conduct an initial on-site inspection of the facility to determine compliance with USMS detention standards.²⁸ In addition, the USM will provide the detention facility with a sample IGA for review, an instruction booklet on how to complete a Form USM-243 “Cost Sheet for Detention Services” (cost sheet), and a cost sheet form.²⁹ The USMS also provides the detention facility with Office of Management and Budget (OMB) Circular A-87.³⁰ As discussed in Finding II, however, the OFDT is in the process of developing an automated system known as eIGA that will be used by state and local governments to apply for an IGA. Using the new system, state and local governments will no longer apply for an IGA using a cost sheet.

According to the current USMS Intergovernmental Agreement Program Policies and Procedures Manual (IGA Manual), a detention facility interested in housing federal detainees is supposed to complete a cost sheet as part of the application process. A cost sheet requests information on actual cost, prisoner population, the detention facility’s proposed rate (also known as a jail-day rate), a local government contact, and certification statements. A jail-day rate is the equivalent of one person detained for one day and begins on the date of arrival, but does not include the date of departure.

Once the cost sheet is completed, the detention facility forwards it to the USMS district office for review. The district office will then submit an IGA package, which includes a completed Request for Detention Space (USM-242), a Detention Facility Inspection Report (USM-218), and the completed cost sheet (USM‑243), to the Programs and Assistance Branch (PAB) at USMS headquarters for evaluation of costs and average daily population.

At the PAB, an IGA analyst reviews the cost sheet for cost allowability, and accuracy of capacity and average daily population figures. Based on the cost sheet information, the IGA analyst will then discuss a jail-day rate with a detention facility official. An IGA is usually indefinite in term until it is terminated by either the detention facility or the USMS.

According to a PAB official, however, detention facilities hold out for higher jail-day rates if they know there is a limited supply of bed space in their geographical area. Further, this PAB official stated that the USMS competes with ICE and state governments for the same bed space, and that ICE pays more and guarantees the use of its bed space, whereas the USMS does not. This PAB official also stated that detention facilities often give priority to ICE detainees, and the operational factors do not always lend to setting rates based on costs.

Prior Audits

Since 1995, the Office of the Inspector General (OIG) has audited 31 individual IGAs. These audits often concluded that the USMS had significantly overpaid state and local governments. In total, the OIG reported dollar-related findings of almost $60 million in these 31 audits. The following are examples of findings from some of our prior audit work:

• [SENSITIVE INFORMATION REDACTED]. Our audit revealed that the [SENSITIVE INFORMATION REDACTED] had not prepared a cost sheet to support its jail-day rate. Further, the audit concluded that [SENSITIVE INFORMATION REDACTED] had costs to support a jail-day rate that was about $17 less per day than the paid rate, resulting in overpayments of almost $1.8 million during calendar years 2000 and 2001.

• [SENSITIVE INFORMATION REDACTED]. Although the USMS paid the [SENSITIVE INFORMATION REDACTED] a jail-day rate of $50, our audit of [SENSITIVE INFORMATION REDACTED] costs revealed that the [SENSITVE INFORMATION REDACTED] FY 2003 allowable costs supported a jail-day rate of $30.62, resulting in overpayments of more than $2.8 million during FYs 2003 and 2004.

• [SENSITVE INFORMATION REDACTED]. Our review of the costs and inmate population listed on the cost sheet concluded that a $52.26 jail-day rate was supported, while the USMS paid the [SENSITVE INFORMATION REDACTED] $65 per jail day, resulting in overpayments totaling almost $2.9 million for FYs 2004 and 2005.

In addition, the OIG conducted an audit of the OFDT in December 2004 which found that, although the OFDT had been in place for almost 4 years, it had not completed the goal of centralizing and overseeing DOJ’s detention activities.³¹ The former INS’s transfer to the DHS in March 2003 and leadership vacancies had complicated the OFDT’s ability to build a firm foundation with a clearly defined organizational purpose. The OIG report made 11 recommendations to OFDT to assist in improving its management of detention activities. Eight of the recommendations are closed, while corrective action is still in process for the remaining three.³²

Audit Approach

The objective of this audit was to determine if the USMS and OFDT employed an effective monitoring and oversight process for IGAs. Appendix I contains more information on our objectives, scope, and methodology.

Our report contains three main findings. The first discusses a dispute between the OFDT and the OIG regarding past OIG audits that found overpayments made to state and local jails for detention space. The second finding concerns the OFDT’s revamping of IGA pricing through an econometric statistical pricing model. The third finding discusses needed improvements in the areas of policies and procedures, training, and defining responsibilities for establishing and monitoring IGAs.

23. The OFDT is authorized 21 employees who are responsible for budget formulation and execution, information technology, procurement, detention standards, legal advice, and management and administration. See Appendix II for more information on the OFDT’s six functional areas.

24. The Federal Bureau of Prisons (BOP) plays a supporting role by housing a portion of the federal detainee population in BOP detention centers and in detention units in other correctional facilities. The BOP’s primary responsibility is incarceration of inmates serving a sentence of imprisonment after conviction for a violation of the federal criminal code. Detention differs markedly from incarceration in terms of population stability. Detention is temporary in nature and requires the frequent movement of detainees in and out of facilities, while incarceration is more long-term and involves less movement of individuals.

25. Detainee housing and subsistence constitute most of the program costs.

26. The average daily population (all detention) represents detainees housed in state and local facilities using IGAs, private contractor facilities, and BOP facilities.

27. The geographical structure of the USMS mirrors the 94 federal judicial districts of the United States, including at least one district in each state, the District of Columbia, the Commonwealth of Puerto Rico, and three territories of the United States – the Virgin Islands, Guam, and the Northern Mariana Islands.

28. The USMS prisoner detention standards require that the detention facility have 24-hour staffing at the facility, adequate meals, medical coverage, fire and emergency plans, security, sanitation and hygiene services, and suicide prevention programs.

29. See Appendix III for an example of a cost sheet form and instructions.

30. OMB Circular A-87 establishes the principles and standards for determining allowable costs associated with cost-reimbursement contracts and other agreements for goods and services obtained by the federal government from state, local, and federally recognized Indian tribal governments. As discussed further in Finding I, the cost sheet instructions and the IGAs state that OMB Circular A-87 is the criteria used in evaluating whether IGA costs are allowable and reasonable. In order to obtain needed detention space, DOJ received an OMB exemption from the Federal Acquisition Regulation (the policies and procedures for acquisitions by all executive agencies). The exemption covered only the reimbursement of costs for detention services subject to OMB Circular A-87.

31. Department of Justice, Office of the Inspector General. Audit Report Number 05-04, Audit of the Department of Justice Office of the Federal Detention Trustee, December 2004.

32. The recommendations to DOJ and OFDT that are still open include clearly identifying the OFDT’s mission and responsibilities, examining the policies and practices regarding IGAs to develop additional areas in which detention costs can be reduced, and developing a plan for reviewing and verifying the allowability of costs associated with individual IGAs.