A State Comptroller audit released today reported that the state overpaid halfway house providers and failed to take action against them following escapes by inmates.
According to the Comptroller’s report, the Department of Corrections does not adequately monitor its state-funded halfway houses.
The OSC audit also found the state has not effectively measured the performance of its halfway house program, which allows eligible inmates – an average daily population of 2,720 – to serve out the remainder of their prison sentence in a setting intended to prepare them for re-entry into society. The program cost the state $64.6 million in fiscal year 2011.
“This is a $64 million program whose success or failure has important consequences for public safety,” State Comptroller Matthew Boxer said in a release. “And yet as a state we have done a poor job of monitoring the program and have made no real attempt to find out what taxpayers are getting for their money. It is critical that the state takes a more active role in ensuring the success of these programs. It cannot simply cut these halfway houses a check and hope for the best.”
In a release, the Comptroller reported that among other findings, OSC found the state overpaid 10 private halfway house providers by $587,186 over a six-year period due to a series of mathematical errors in the calculation of per diem rates charged by the providers. The state also paid seven halfway house providers for accreditations they never actually obtained, OSC found. 2
A separate review by OSC’s procurement division raised further questions about the per diem payments, noting for example that the Department of Corrections (DOC) allowed providers to include seemingly duplicative administrative expenses in per diem budgets. Those costs varied widely among the various providers. In 2010, claimed administrative costs from vendors ranged from $0 per inmate bed to $7,354 per inmate bed. Based on OSC’s findings, DOC has agreed to exclude such administrative costs from per diem rates in future contracts.
In addition to the overpayments, the audit found DOC failed to exercise its contractual right to collect pre-set damages from halfway house providers that violated contract terms. For example, six halfway house residents waiting to be transported back to prison by DOC correctional officers for disciplinary reasons were able to escape because they were not placed in a secured holding area within the halfway house as required by contract. In three of those instances, a secured area did not even exist on the halfway house premises.
The Comptroller’s audit reported that under its contract with the vendors DOC could have assessed $30,000 in liquidated damages for these six escapes but did not. Nor did DOC attempt to determine if liquidated damages should be assessed for any of the other 195 escapes reviewed by OSC.
OSC’s examination of those escapes, which occurred at seven of the state’s 25 halfway houses between January 2008 and March 2009, found a range of circumstances under which the escapes occurred. For example, 31 residents escaped through back, side or emergency doors or through smoking areas while seven residents escaped after placing dummies in their beds as decoys.