Summary

California Department of Corrections: The Cost of Incarcerating Inmates in State-Run Prisons Is Higher Than the Department’s Published Cost September 1998 97125 The first copy of each California State Auditor report is free. Additional copies are $3 each. You can obtain reports by contacting the Bureau of State Audits at the following address: California State Auditor Bureau of State Audits 555 Capitol Mall, Suite 300 Sacramento, California 95814 (916) 445-0255 or TDD (916) 445-0255 x 248 Permission is granted to reproduce reports. C S A ALIFORNIA TATE UDITOR KURT R. SJOBERG MARIANNE P. EVASHENK STATE AUDITOR CHIEF DEPUTY STATE AUDITOR September 15, 1998 97125 The Governor of California President pro Tempore of the Senate Speaker of the Assembly State Capitol Sacramento, California 95814 Dear Governor and Legislative Leaders: As requested by the Joint Legislative Audit Committee, the Bureau of State Audits presents its audit report concerning the annual cost to the State for incarcerating inmates under the jurisdiction of the Department of Corrections (department). The report reviews the department’s own calculation of inmate costs at the 32 prisons and determines whether the included cost factors are appropriate and reasonable. We also calculated the annual incarceration costs per inmate for each of the 32 state-run prisons operating during fiscal year 1996-97, as well as a statewide cost per inmate. This report concludes that the department’s calculation appropriately includes most of the direct and indirect operating costs but lacks certain indirect operating costs as well as capital costs for prison construction and expansion. Our calculation includes all operating (direct and indirect) costs and capital costs. We found that per-inmate costs vary significantly from one prison to another. Annual costs per inmate for the 32 prisons ranged from $18,562 to $38,554 for fiscal year 1996-97. The statewide average was $24,807. In conclusion, we recommend that, to accurately determine the cost of incarceration, the department should include all costs, both operating and capital, when calculating how much the State pays annually to incarcerate criminals. Respectfully submitted, KURT R. SJOBERG State Auditor BUREAU OF STATE AUDITS 660 J Street, Suite 300, Sacramento, California 95814 Telephone: (916) 445-0255 Fax: (916) 327-0019 CONTENTS Summary 1 Introduction 3 Audit Results The Department’s Calculation of Annual Incarceration Costs Per Inmate Does Not Reflect All Costs Incurred by the State 7 Recommendation 16 Appendix Our Calculation of Annual Incarceration Costs Per Inmate for Fiscal Year 1996-97 17 Response to the Audit Department of Corrections 21 California State Auditor’s Comments on the Response From the Department of Corrections 23 C A L I F O R N I A S T A T E A U D I T O R SUMMARY RESULTS IN BRIEF T he California Department of Corrections (department) was established in 1944 and is responsible for incarcerat- ing criminals. Its operation includes work, academic Audit Highlights . . . education, vocational training, and medical, dental, and psychi- atric care for California’s approximately 146,000 inmates, as well We found that the California as parole services, such as supervision and surveillance. Department of Corrections published annual incarceration costs Each fiscal year, the department calculates and publishes the amount of incarceration costs per inmate. The department’s (cid:254) Of $21,012 are calculation focuses primarily on those operating costs directly understated by related to housing and supporting inmates, such as food, cloth- $3,795 per inmate ing, health care, and inmate activities. For fiscal year 1996-97, (cid:254) Do not include $437 the department calculated annual incarceration costs at $21,012 million in capital costs per inmate. (cid:254) Exclude $15 million paid to local governments We reviewed the department’s calculation and found that, related to state inmates, although it appropriately reflects many of the operating costs, and $84 million of the it does not include all costs incurred by the State. When we department’s share of state overhead costs included all of the costs, we found that annual incarceration costs were $24,807 per inmate for fiscal year 1996-97, $3,795 Further, we found the cost per higher per inmate than the department’s published figure. The inmate for the 32 prisons ranged from $18,562 to total difference of costs to incarcerate inmates between the $38,554 per year. department’s calculation and our estimate is $517 million. The primary reason for this difference is the department’s calculation does not include capital costs, such as lease-purchase payments, debt-service costs for new construction, and costs of improving and renovating existing prisons. The department’s calculation also does not include reimbursements to local governments for transportation costs, court fees, and county charges related to state inmates. Finally, the department’s calculation does not include its share of state central-service costs, such as costs of various accounting functions performed by the State Controller’s Office for other state departments. We calculated the annual incarceration costs per inmate for each of the 32 state-run prisons operating during fiscal year 1996-97, as well as a statewide cost per inmate. Our calculation includes all operating and capital costs. We found that annual C A L I F O R N I A S T A T E A U D I T O R 1 incarceration costs per inmate vary significantly from one prison to another, depending on each prison’s security levels, facility types, and age. Annual costs per inmate for the 32 prisons ranged from $18,562 to $38,554 per year. The Appendix contains our complete cost model, detailing the various components of incarceration costs for fiscal year 1996-97, and a discussion of the methodology we used to construct our model. RECOMMENDATION To accurately determine the relevant cost of prison operations, the department should include all operating and capital costs in its calculation of how much the State pays annually to incarcerate criminals. AGENCY COMMENTS The Department of Corrections generally agrees with our findings and our recommendation that all operating and capital costs should be included in its calculation of annual incarceration costs. n 2 C A L I F O R N I A S T A T E A U D I T O R INTRODUCTION BACKGROUND T he California Department of Corrections (department), established in 1944, is responsible for incarcerating criminals. In terms of staffing, it is the largest department in state government, with approximately 45,000 employees, 28,000 of them sworn correctional peace officers. The department’s $4 billion budget for fiscal year 1998-99 is prima- rily funded by the State’s General Fund. The department also provides work, academic education, vocational training, and medical, dental, and psychiatric care for California’s inmate population, as well as parole services, such as supervision and surveillance. OVERVIEW OF THE DEPARTMENT AND CORRECTIONAL FACILITIES The department directly operates 331 minimum- to maximum- security state prisons, which currently house over 146,000 inmates throughout the State. Refer to Figure 1 for a map of the 33 state prisons. It also monitors parolees and oversees community correctional facilities. The department primarily consists of three programs: Institution, Health Care Services, and Community Correctional. Through the Institution Program, the department operates state prisons classified by security level and facility type. Security levels range from Level I (minimum) to Level IV (maximum). Types of facilities include isolated housing units for high-profile and condemned criminals, and reception centers. In its recep- tion centers, the department evaluates inmates for various case factors, such as personal and criminal history, medical and psychiatric conditions, and educational needs, before assign- ing each inmate to a specific prison with the appropriate security level. 1 The department operated 32 prisons during fiscal year 1996-97; an additional prison was completed in fiscal year 1997-98. C A L I F O R N I A S T A T E A U D I T O R 3 FIGURE 1 The Locations of the 33 State Prisons Pelican Bay State Prison Crescent City High Desert State Prison Susanville California Correctional Center CCCaaallliiifffooorrrnnniiiaaa MMMeeedddiiicccaaalll FFFaaaccciiillliiitttyyy CCCaaallliiifffooorrrnnniiiaaa SSStttaaattteee PPPrrriiisssooonnn,,, Sacramento SSoollaannoo Folsom State Prison Vacaville California State Prison, Sacramento Mule Creek State Prison California State Prison, Stockton Sierra Conservation Center San Quentin Jamestown SSSaaannn FFFrrraaannnccciiissscccooo Tracy NNNNNooooorrrrrttttthhhhheeeeerrrrrnnnnn CCCCCaaaaallllliiiiifffffooooorrrrrnnnnniiiiiaaaaa WWWWWooooommmmmeeeeennnnn’’’sss FFFaaaccciiillliiitttyyy DDDeeeuuueeelll VVVooocccaaatttiiiooonnnaaalll IIInnnssstttiiitttuuutttiiiooonnn Chowchilla Valley State Prison for Women Central California Women’s Facility Salinas Fresno Correctional Training Facility Corcoran II - State Prison and Salinas Valley State Prison Substance Abuse Treatment Facility California State Prison, Corcoran Pleasant Valley State Prison Avenal State Prison North Kern State Prison California Men’s Colony Wasco State Prison Bakersfield San Luis Obispo California Correctional Institution California State Prison, Los Angeles County Santa Barbara Ironwood State Prison Chuckawalla Valley State Prison LLLooosss AAAnnngggeeellleeesss Chino California Institution for Men California Institution for Women California Rehabilitation Center San Diego R.J. Donovan Correctional Facility Calipatria State Prison Centinela State Prison 4 C A L I F O R N I A S T A T E A U D I T O R Through its Institution Program, the department also operates camps throughout the State that primarily train inmates as wildland firefighters. In addition, the department supervises inmates placed in Department of Mental Health hospitals. The Institution Program also has a correctional officer training center. The Health Care Services Program provides medical, dental, and psychiatric services to state prison inmates. The depart- ment employs approximately 170 health care providers and support staff. The program operates four licensed hospitals, a skilled-nursing facility, and a hospice care facility. It also contracts with community health care providers—including hospitals, physician groups, and individual care providers—for specialty care and supplemental health services. Health Care Services was established as a separate program during fiscal year 1997-98. Prior to that, these services were included in the Institution Program. Through the Community Correctional Program, the department supervises parolees who have been released to the community. It also oversees community correctional facilities operated through contracts with local governments and private entities. The primary objective of the Community Correctional Program is to increase the degree of successful reintegration of criminals into society and to reduce the level of recidivism. Community correctional facilities house approximately 6,000 parolees and minimum- to medium-security inmates. Additionally, through the Community Correctional Program, the department administers contracts with local government detention facilities, re-entry centers, community programs for incarcerated mothers, restitution centers, and a substance abuse treatment program. SCOPE AND METHODOLOGY The Joint Legislative Audit Committee requested that the Bureau of State Audits determine the actual annual cost to the State for incarcerating inmates under the department’s jurisdiction. Specifically, we were asked to ensure that all rel- evant costs be considered. Our audit focused on incarceration costs of state-operated prisons. We did not review the costs of community correctional facilities, or include these costs in our model, because these facilities are operated by private entities and local governments, not by the department. C A L I F O R N I A S T A T E A U D I T O R 5 To obtain an understanding of the department’s responsibilities and the environment in which it operates, we reviewed perti- nent federal and state laws and regulations, governor’s budgets, studies regarding prisons and incarceration costs prepared by other state and federal governments, and other relevant background information. Each fiscal year, the department calculates and publishes the annual cost of incarceration per inmate in the governor’s budget and in department fact sheets. Before performing our own calculation of annual incarceration costs, we reviewed the department’s calculation to understand its methodology. We also interviewed appropriate staff and reviewed documents supporting the department’s calculation. We additionally reviewed the department’s budget and certain accounting records and procedures. We identified the types of costs the department included and excluded in its calculation and ascertained whether these costs were appropriately included or excluded. The department’s calculation of annual incarceration costs includes operating costs but not capital costs. The department incurs capital costs for designing and building its prisons. In developing our own estimate of annual incarceration costs per inmate, we included both operating and capital costs. We used information from the department’s accounting records as well as the governor’s budget to construct our cost model. Using our model, we calculated the annual incarceration costs per inmate for each of the 32 state-run prisons operating during fiscal year 1996-97, as well as a statewide cost per inmate. We used fiscal year 1996-97 data because it was the most current available during our audit. To verify the accuracy and completeness of the cost information in our model, we reviewed pertinent accounting records. We also verified the accuracy of the costs in our model by perform- ing an analytical review of labor costs, which represent the largest element of incarceration costs. Specifically, we verified the accuracy of salaries, wages, and retirement benefit costs in our model by comparing these amounts taken from the department’s records to the records maintained by the State Controller’s Office, which disburses payroll payments to state employees. We noted no material differences. n 6 C A L I F O R N I A S T A T E A U D I T O R AUDIT RESULTS The Department’s Calculation of Annual Incarceration Costs Per Inmate Does Not Reflect All Costs Incurred by the State SUMMARY E ach fiscal year, the Department of Corrections (depart- ment) calculates and publishes the amount of incarcera- tion costs per inmate. In this calculation, the department includes primarily operating costs directly related to housing and supporting inmates, such as food, clothing, health care, and inmate activities. For fiscal year 1996-97, the department calculated annual incarceration costs at $21,012 per inmate. Although the department’s calculation of incarceration costs appropriately reflects many of the operating costs, it does not include all costs incurred by the State. Our calculation, which considered all costs, placed annual incarceration costs at $24,807 per inmate for fiscal year 1996-97. The department’s calculation of incarceration costs per inmate did not include capital costs, reimbursements to local govern- ments, or its share of state central-service costs. Therefore, we developed our own estimate of annual incarceration costs per inmate for each of the 32 state-run prisons operating during fiscal year 1996-97, which includes both operating and capital costs. Our calculation of cost per inmate for the 32 prisons ranged from $18,562 to $38,554 per year. Our calculation indicates that the State paid a total of $517 million more than the department calculated to incarcer- ate criminals in fiscal year 1996-97. THE COST OF INCARCERATING INMATES IN STATE-RUN PRISONS IS HIGHER THAN THE DEPARTMENT’S PUBLISHED AMOUNT The department appropriately included certain operating costs in its calculation and properly excluded certain costs, such as expenses related to the Community Correctional Program, C A L I F O R N I A S T A T E A U D I T O R 7 the Prison Industry Authority (PIA), and the Inmate Welfare Fund. However, the department did not include capital costs, reimbursements to local governments, and its share of state central-service costs, and included costs associated with the Santa Rita Jail that should have been excluded. When we included all relevant costs, we calculated annual incarceration costs at $24,807 per inmate for fiscal year 1996-97. Table 1 illustrates the difference between the department’s calculation and ours. TABLE 1 The Department’s Calculation Our Calculation of Annual Incarceration Costs of Annual Incarceration Costs Per Inmate for Fiscal Year 1996-97 Per Inmate for Fiscal Year 1996-97 Total Institution Program Costs1 $3,226,411,000 Direct Operating Costs1 $2,606,769,428 Less Local Assistance (15,419,000) Indirect Operating Costs Less Lease-Purchase Payments (211,705,000) Local Assistance3 15,419,979 Less Inmate Welfare Fund (37,926,000) State Central-Service Costs3 84,089,496 Headquarters’ Overhead 307,282,113 Total Incarceration Costs $2,961,361,000 McGee Training Center 27,119,932 Divided by Average Daily Prison Population2 140,934 Total Operating Costs1 3,040,680,948 Department Calculated Cost Capital Costs Per Inmate $21,012 General-Obligation Bonds Debt Service3 221,792,137 Lease-Purchase Payments (includes insurance)3 211,704,782 Capital Outlay Funded by General Fund3 3,766,000 Total Capital Costs 437,262,919 Total Incarceration Costs $3,477,943,867 Divided by Average Daily Prison Population2 140,202 Our Calculated Cost Per Inmate $24,807 1 Institution Program costs and direct operating costs may include a small amount of costs incurred to care for the inmates incarcerated in a community correctional facility. For example, an inmate in a community correctional facility may be temporarily transferred to a state prison for medical treatment. However, the department could not provide the specific amount for such situations. 2 The average daily prison population used in the department’s calculation is higher than ours because it includes inmates held in the Santa Rita Jail. 3 These costs are not included in the department’s calculation. 8 C A L I F O R N I A S T A T E A U D I T O R OPERATING COSTS ARE THE KEY COMPONENTS OF THE DEPARTMENT’S CALCULATION The department’s calculation of annual incarceration costs per inmate appropriately included the operational costs of guarding, feeding, educating, and attending to the health care needs of inmates. The department accounts for these operational costs in the Institution Program. This program also includes external professional-services costs, such as medical and psychiatric services provided through contracts or interagency agreements, and legal services provided by the department’s in-house counsel, external law firms, and the attorney general. As indi- cated in Table 1, most of the $3.2 billion cost of the Institution Program was included in the department’s calculation. The department’s calculation appropriately excluded costs related to the Community Correctional Program, the PIA, and Appropriately, the the Inmate Welfare Fund. Through the Community Correctional department excludes Program, the department supervises parolees released to the costs from the community and oversees community correctional facilities that Community Correctional are operated through contracts with local governments and Program, the Prison private entities. The department did not include the costs of the Industry Authority, and Community Correctional Program in its calculation. We agree the Inmate Welfare Fund that these costs should not be included because they relate to from its computation of released parolees and facilities that are run by private entities annual incarceration and local governments. costs. Moreover, although the PIA currently operates manufacturing, service, and agricultural facilities at 23 of the 33 state prisons, the department excluded PIA-related costs from its calculation. The PIA operation is intended to reduce the department’s operat- ing costs and to be self-supporting. However, the department subsidizes the PIA’s operation by charging the PIA less-than- market rent for facilities and warehouse space. On the other hand, the PIA also provides a form of subsidy to the department by performing services the department does not reimburse, such as searches and standing counts. We also excluded these costs because the rent subsidies and the PIA-provided services may offset each other, and it would be difficult to quantify any difference. Finally, the department excluded expenditures of the Inmate Welfare Fund in its calculation, as it is a self-supporting fund used to run prison canteens. All expenditures, including costs of goods sold, labor costs, equipment, and utilities, are fully C A L I F O R N I A S T A T E A U D I T O R 9 recovered by canteen sales and other related revenues. We agree that these expenditures should not be included in the cost calculation because there is no cost to the State. THE DEPARTMENT’S CALCULATION DID NOT INCLUDE SEVERAL COSTS THAT SHOULD HAVE BEEN INCLUDED Although the department’s calculation of incarceration costs included many of the operating costs, it did not include all of the costs incurred by the State. The department’s calculation did not include capital costs, such as lease-purchase payments, debt-service costs for new construction, and costs of improving and renovating existing prisons. Additionally, the department’s calculation did not include reimbursements to local govern- ments for transportation costs, court fees, and county charges related to state inmates, or its share of state central-service costs. When we included all of these costs in our calculation, we found that annual incarceration costs were $24,807 per inmate for fiscal year 1996-97, $3,795 higher per inmate than the department’s published figure. THE DEPARTMENT DID NOT INCLUDE CAPITAL COSTS The department did not include any capital costs in its calcula- The department did tion of incarceration costs. During fiscal year 1996-97, these not include capital costs totaled approximately $437 million. Capital costs represent costs of $437 million in the expense of constructing new prisons, acquiring land and its calculation of equipment, and improving and renovating existing prisons. The incarceration costs. department finances capital costs in one of three ways: through the issuance of general-obligation bonds, lease-revenue bonds, or through General Fund expenditures. General-obligation bond proceeds can be used for new prison construction, as well as improvements to and renovation of existing facilities—for example, installing electric fences. Information was unavailable regarding the amount of general- obligation bond debt-service costs applicable to the department or to specific prisons. Therefore, we estimated the department’s allocated portion to be approximately $222 million for fiscal year 1996-97. The Appendix describes the methodology we used to estimate and allocate this amount among the prisons. 10 C A L I F O R N I A S T A T E A U D I T O R Lease-revenue bonds can also be used to finance construction of new prisons and improvements to existing prisons. The subsequent lease-purchase payments represent debt-service costs of the bonds, including principal, interest, and bond-issuance costs. Lease-purchase payments also include costs of property and liability insurance for these prisons. Lease payments represent capital costs because the State will own these prisons at the end of the lease term. During fiscal year 1996-97, the department made lease payments of approximately $212 million for the construction of 11 new prisons. During this period, the department also financed capital costs of approximately $4 million through General Fund expenditures. As the inmate population continues to grow, new prison con- struction and improvements to existing prisons become even more important. The department’s records show the average daily inmate population has increased more than 500 percent since 1980. Additionally, during fiscal year 1996-97, prisons operated on average at 193 percent of designed capacity. To accommodate this population increase, many prisons now have double cells and bunks, and numerous emergency projects have been required to convert gymnasiums and activity rooms into inmate housing. Furthermore, the department has built 21 new prisons in the last 15 years. These capital costs are necessary to keep pace with increases in the inmate population and represent direct costs that should be considered when calculating the relevant cost of incarcerating inmates in state-run prisons. Without prisons, the department cannot house inmates. We have therefore included these capital costs in our cost model. THE DEPARTMENT EXCLUDED LOCAL ASSISTANCE COSTS The department did not include local assistance in its calcula- The department excluded tion of incarceration costs as these costs are budgeted for $15 million in and originally borne by local governments. Local assistance is reimbursements to local budgeted in the State’s General Fund for reimbursing local governments for governments for transportation costs, court fees, and county transportation, court charges for state inmates. As shown in Table 1, the State fees, and county charges reimbursed local governments approximately $15 million for for state inmates. local assistance during fiscal year 1996-97. Transportation costs include expenses incurred by counties for transporting inmates and returning fugitives from outside the State. Court C A L I F O R N I A S T A T E A U D I T O R 11 fees and county charges represent legal costs incurred by local governments. We disagree with the department’s treatment of these costs, and have included them in our calculation because the department ultimately pays these expenses. THE DEPARTMENT DID NOT INCLUDE ITS SHARE OF CENTRAL-SERVICE COSTS The department did not include its share of central-service costs in its calculation of incarceration costs per inmate. Central-service costs are those amounts expended by central-service departments and the Legislature for the overall administration of state government and for providing centralized services to state departments. These functions are necessary for state operations and are centralized to provide efficient and consistent statewide policies and services. For example, the Department of Finance provides audits and budget analysis to other departments, and the State Controller’s Office performs various accounting functions, such as payroll, disbursements, and claims audits, for other state departments. The Department of Finance allocates a portion of these central-service costs to each state department. The costs of specific services provided through interagency agreements are not included in the allocated central-service costs. Addition- Although the department ally, only those departments that are not primarily funded by is not billed for central- the General Fund are actually charged for their portion of service costs, its share for central-service costs. Therefore, because almost all of the fiscal year 1996-97 was department’s costs are paid from the General Fund, the depart- $84 million. ment is not billed for its share of central-service costs, and it does not include them in its calculation of incarceration costs. Although the department is not billed for its share of central-service costs, these are actual and necessary costs incurred by the State, and represent indirect costs of incarcera- tion. We feel that these costs should have been included in the department’s calculation, and we included them in our model, just as we included other departmental overhead costs. For fiscal year 1996-97, the department’s share of central-service costs was approximately $84 million. 12 C A L I F O R N I A S T A T E A U D I T O R THE DEPARTMENT INCLUDED THE COST OF THE SANTA RITA JAIL IN ITS CALCULATION FOR FISCAL YEAR 1996-97 The department contracts with Alameda County for use of the Santa Rita Jail. The jail houses inmates on a temporary basis who are primarily parole violators waiting to be permanently assigned to state prisons. In the past, the department included the cost of the Santa Rita Jail in its inmate cost calculation because the jail originally was used as overflow for San Quentin State Prison. For fiscal year 1996-97, this cost amounted to approximately $14 million. However, the department subse- quently decided that it was more appropriate to classify these costs under the Community Correctional Program because the inmates housed in the jail are primarily parolees. Therefore, Because the Santa Rita beginning with its fiscal year 1997-98 calculation, the jail is used primarily to department excluded these costs from its calculation. house parolees, its costs should be classified We agree with the department’s subsequent decision to under the Community account for the contract costs of the Santa Rita Jail under the Correctional Program Community Correctional Program and not the Institution and excluded from the Program. Furthermore, because county jails are not operated by calculation of annual the State, and as their function is limited, we have excluded the incarceration costs. costs of these jails from our cost model. ANNUAL INCARCERATION COSTS PER INMATE VARY SIGNIFICANTLY FROM ONE PRISON TO ANOTHER In addition to calculating the statewide cost per inmate, we calculated the annual incarceration costs per inmate for each of the 32 state-run prisons operating during fiscal year 1996-97. Table 2 illustrates that annual incarceration costs per inmate vary significantly from one prison to another, ranging from a low of $18,562 at Folsom State Prison to a high of $38,554 at the California Medical Facility, with a statewide average of $24,807. The Appendix shows our complete cost model detailing the various components of incarceration costs for fiscal year 1996-97, as well as a discussion of the methodology we used to construct our model. C A L I F O R N I A S T A T E A U D I T O R 13 TABLE 2 Our Calculation of Annual Incarceration Costs Per Inmate for Fiscal Year 1996-97 Average Total Cost Daily Operating Per Inmate Year Security Inmate Cost (Operating and Correctional Institution Opened Level* Population Per Inmate Capital Costs) Total Cost Per Inmate: up to $22,000 1 Folsom State Prison 1880 I, II 3,853 $18,049 $18,562 2 California Correctional Center 1963 I, II, III, CAMP 5,882 17,863 18,816 3 Correctional Training Facility 1947 I, II 6,624 18,578 19,270 4 Sierra Conservation Center (men & women) 1965 I, II, III, CAMP 6,290 18,423 19,430 5 California Rehabilitation Center (men & women)1962 I, II 4,894 19,838 20,223 6 California Men’s Colony 1954 I, II, III 6,422 20,776 21,233 7 Avenal State Prison 1987 II 5,737 18,704 21,486 Total Cost Per Inmate: $22,001 to $26,000 8 California State Prison, Solano 1984 II, III 4,847 19,080 22,213 9 Deuel Vocational Institution 1953 I, III, REC 3,618 22,026 22,434 10 Chuckawalla Valley State Prison 1988 I, II 3,617 18,865 22,682 11 California State Prison, San Quentin 1852 I, II, SQ, REC, COND 5,788 22,345 22,909 12 Wasco State Prison 1991 I, III, REC 5,173 19,345 23,411 13 California Correctional Institution 1955 I, II, III, IV, REC 5,933 20,973 23,599 14 California Institution for Men 1941 I, REC 5,980 23,574 23,959 15 North Kern State Prison 1993 I, III, REC 4,749 19,655 24,026 16 Pleasant Valley State Prison 1994 I, III 4,542 19,393 24,065 17 Ironwood State Prison 1994 I, III 4,393 19,402 24,465 18 R.J. Donovan Correctional Facility 1987 I, III, REC 4,609 21,348 24,637 19 California State Prison, Centinela 1993 I, III, IV 4,481 19,821 24,913 20 Salinas Valley State Prison 1996 I, IV 3,295 22,453 25,546 21 Valley State Prison for Women 1995 INST, REC, SHU 2,870 19,890 25,638 Total Cost Per Inmate: over $26,000 22 California State Prison, Calipatria 1992 I, III, IV 4,014 21,013 26,391 23 Mule Creek State Prison 1987 I, III, IV 3,599 21,392 26,817 24 Central California Women’s Facility 1990 INST,REC,COND 3,269 21,985 27,108 25 California State Prison, Los Angeles County 1993 I, III, IV 4,166 22,025 27,916 26 High Desert State Prison 1995 I, III, IV, REC 4,037 21,451 28,006 27 California Institution for Women 1952 INST, REC 1,728 28,288 28,893 28 Northern California Women’s Facility 1987 INST, REC 760 27,472 31,846 29 California State Prison, Sacramento 1986 I, IV 3,192 28,225 32,701 30 California State Prison, Corcoran 1988 I, III, IV, PHU, SHU 4,699 26,599 34,567 31 Pelican Bay State Prison 1989 I, III, IV, SHU 3,624 29,086 37,243 32 California Medical Facility 1955 I, II, III 3,153 38,169 38,554 Subtotals (institutions with inmates) 139,838 21,408 24,530 33 Substance Abuse Treatment Facility and 1997 no inmates FY 96/97 0 0 0 California State Prison, Corcoran II Dept. of Mental Health hospitals (contracted) n/a hospitals 364 118,746 118,746 Totals (all institutions and DMH hospitals) 140,202 $ 21,688 $ 24,807 *Security Levels Level I: Open dormitories without a secure perimeter. Level II: Open dormitories with secure perimeter fences and armed coverage. Level III: Individual cells, fenced perimeters, and armed coverage. Cells adjacent to exterior walls. Level IV: Individual cells, fenced or walled perimeters, electronic security, more staff, and armed officers both inside and outside the installation. Cells non-adjacent to exterior walls. CAMP: Conservation camps with inmates trained in firefighting. REC: Reception Center. Provides short-term housing to process, classify, and evaluate incoming inmates. INST: Institutional. For facilities with female inmates. May have inmates at all four security levels (Level I, II, III, IV). SHU: Security Housing Unit. The most secure area within a Level IV prison designed to provide maximum coverage for problem offenders. PHU: Protective Housing Unit. For high-profile inmates and police officers. SQ: Alternate Program at San Quentin. A boot camp where inmates focused on studying and training. Program discontinued after FY 96/97. COND: Condemned. Holds inmates with death sentences. 14 C A L I F O R N I A S T A T E A U D I T O R As illustrated in Table 2, annual incarceration costs per inmate vary significantly from one prison to another, depending on each prison’s security level, facility type, and age. Generally, as security levels increase, costs also increase. Additionally, different types of facilities have varying costs. For example, certain prisons include facilities, such as reception centers, isolated-housing units, hospitals, and camps. Prisons with medical facilities generally cost more to run per inmate than prisons with camps. Furthermore, new prisons are generally more expensive than older prisons because the older prisons have had their original construction costs fully paid long ago and generally only have capital costs associated with im- provements and renovations. Table 2 classifies prisons in three Depending on each categories according to cost per inmate: low (up to $22,000), prison’s security level, medium ($22,001 to $26,000), and high (over $26,000). facility type, and age, the cost per inmate varies The lowest-cost prisons include minimum- to medium-security significantly from one facilities only (Levels I, II, or III). They do not include prison to another. maximum-security facilities, reception centers, or isolated- housing units. Additionally, two of the prisons in this category, the California Correctional Center and the Sierra Conservation Center, provide minimum-security camps, thus lowering the cost per inmate. Approximately one-third of the total inmate population of these two prisons are in camps. The medium-cost prisons provide different types of facilities that add extra operational costs, even though they are primarily minimum- to medium-security facilities. For example, San Quentin State Prison has special units for death-row inmates. Additionally, there are several recently constructed prisons in this cost category, including California State Prison in Solano County, Chuckawalla Valley State Prison, and Pleasant Valley State Prison. This drives up the cost per inmate because of the increased capital costs. The highest-cost prisons include maximum-security facilities (Level IV), medical facilities, women’s facilities, and newer facilities. For example, Pelican Bay State Prison includes a maximum-security facility with isolated-housing units. The California Medical Facility in Vacaville had the highest inmate cost of $38,554 per year because of the medical treatment it offers. Three of the four all-female facilities are also in the highest-cost category because they accommodate fewer inmates per facility and provide all levels of security, and because medi- cal costs for women tend to be higher. Finally, the highest-cost C A L I F O R N I A S T A T E A U D I T O R 15 prisons include a few of the newly constructed prisons, such as the Central California Women’s Facility and California State Prison in Los Angeles County, which have larger capital costs. RECOMMENDATION To accurately determine the relevant cost of prison operations, the department should include all operating and capital costs in its calculation of how much the State pays annually to incarcerate criminals. n We conducted this review under the authority vested in the California State Auditor by Section 8543 et seq. of the California Government Code and according to generally accepted governmental auditing standards. We limited our review to those areas specified in the audit scope section of this report. Respectfully submitted, KURT R. SJOBERG State Auditor Date: September 15, 1998 Staff: Steve Hendrickson, Audit Principal Mike Tilden, CPA Kenneth Louie Hitomi Sekine 16 C A L I F O R N I A S T A T E A U D I T O R APPENDIX Our Calculation of Annual Incarceration Costs Per Inmate for Fiscal Year 1996-97 METHODOLOGIES USED TO CONSTRUCT OUR COST MODEL T o calculate incarceration costs for each of the 32 state prisons operating during fiscal year 1996-97, we first obtained the direct operating costs of each prison from the Department of Corrections’ (department) account- ing records. These operating costs include expenses such as salaries, wages, staff benefits, contract services, materials and supplies, and other direct and overhead costs attributable to specific prisons. We allocated indirect costs, including local assistance, the Institution Program’s share of headquarters and central-service costs, and McGee Training Center costs, to each prison proportionally based on its inmate population. We also obtained from the department’s accounting records the amounts of lease-purchase payments and related insurance costs attributable to specific prisons. Information was not available regarding the amount of general-obligation bond debt-service costs applicable to the department or to specific prisons. Therefore, we allocated these costs for fiscal year 1996-97 to specific prisons based on the proportion of each bond issue that was used for construction of each prison. We allocated capital costs for statewide and minor improve- ment projects to each prison proportionally based on inmate populations. In our model, shown in Table 3, we include a subtotal for incarceration costs per inmate for the 32 prisons operating during fiscal year 1996-97. The 33rd prison, Corcoran II–State Prison and Substance Abuse Treatment Facility, is listed sepa- rately because its construction was not complete until fiscal year 1997-98. We also listed separately the costs of inmates held by contract in Department of Mental Health hospitals. C A L I F O R N I A S T A T E A U D I T O R 17 TABLE 3 TABLE 3 Our Detailed Calculation of Annual Incarceration Costs Per Inmate for Fiscal Year 1996-97 Direct Operating Costs Indirect Operating Costs Capital Costs Headquarters’ State Total Operating Lease- General- Allocated Total Cost Total Local Overhead and Central- Operating Cost Purchase Obligation Bond Capital Outlay (Operating and Cost Correctional Institution Security Levela Support and Health Assistance Training Center Services Costsc Per Inmate Payments Debt Service From General Fund Capital Costs)c Per Inmate Total Cost Per Inmate: up to $22,000 1 Folsom State Prison I,II, $ 58,776,708 $ 424,871 $ 8,022,931 $ 2,316,944 1 $ 69,541,454 $ 18,049 $ 0 $1,978,660 $ 0 $ 71,520,114 $ 18,562 2 California Correctional Center I,II,III,CAMP 88,636,317 648,610 12,247,827 3,537,053 2 105,069,807 17,863 0 5,608,280 0 110,678,087 18,816 3 Correctional Training Facility I,II 104,551,751 730,431 13,792,861 3,983,244 3 123,058,286 18,578 0 2,550,958 2,036,918 127,646,162 19,270 4 Sierra Conservation Centerb I,II,III,CAMP 98,308,711 693,600 13,097,388 3,782,398 4 115,882,096 18,423 0 6,330,105 0 122,212,201 19,430 5 California Rehabilitation CenterbI,II 83,413,727 539,663 10,190,559 2,942,934 5 97,086,883 19,838 0 1,886,484 0 98,973,367 20,223 6 California Men’s Colony I,II,III 115,481,787 708,156 13,372,245 3,861,774 6 133,423,962 20,776 0 2,936,289 0 136,360,251 21,233 7 Avenal State Prison II 91,277,808 632,621 11,945,900 3,449,859 7 107,306,188 18,704 0 15,960,032 0 123,266,220 21,486 Total Cost Per Inmate: $22,001 to $26,000 8 California State Prison, Solano II,III 78,938,200 534,480 10,092,693 2,914,671 8 92,480,044 19,080 0 15,180,284 7,564 107,667,892 22,213 9 Deuel Vocational Institution I,III,REC 69,580,613 398,958 7,533,601 2,175,630 9 79,688,802 22,026 0 1,431,461 47,127 81,167,390 22,434 10 Chuckawalla Valley State Prison I,II 58,127,920 398,848 7,531,518 2,175,029 10 68,233,315 18,865 0 13,725,594 83,199 82,042,108 22,682 11 California State Prison, San Quentin I,II,SQ,REC,COND 113,162,062 638,245 12,052,095 3,480,528 11 129,332,929 22,345 0 3,265,871 0 132,598,800 22,909 12 Wasco State Prison I,III,REC 85,621,446 570,428 10,771,508 3,110,706 12 100,074,089 19,345 0 21,029,247 2,702 121,106,038 23,411 13 California Correctional Institution I,II,III,IV,REC 107,859,136 654,234 12,354,022 3,567,721 13 124,435,113 20,973 12,239,379 3,340,465 0 140,014,957 23,599 14 California Institution for Men I,REC 124,266,546 659,416 12,451,888 3,595,984 14 140,973,835 23,574 0 2,302,948 0 143,276,783 23,959 15 North Kern State Prison I,III,REC 80,075,097 523,674 9,888,632 2,855,740 15 93,343,143 19,655 0 20,754,429 2,909 114,100,481 24,026 16 Pleasant Valley State Prison I,III 75,394,244 500,848 9,457,605 2,731,264 16 88,083,961 19,393 19,017,313 2,128,959 72,726 109,302,959 24,065 17 Ironwood State Prison I,III 72,960,088 484,417 9,147,349 2,641,665 17 85,233,519 19,402 0 22,167,108 72,144 107,472,771 24,465 18 R.J. Donovan Facility I,III,REC 85,516,571 508,236 9,597,116 2,771,553 18 98,393,476 21,348 0 15,004,218 153,598 113,551,292 24,637 19 California State Prison, CentinelaI,III,IV 76,300,084 494,121 9,330,587 2,694,583 19 88,819,375 19,821 19,799,738 2,916,500 101,235 111,636,848 24,913 20 Salinas Valley State Prison I,IV 64,775,955 363,341 6,861,032 1,981,399 20 73,981,727 22,453 8,781,629 1,409,698 0 84,173,054 25,546 21 Valley State Prison for Women INST,REC,SHU 49,066,784 316,476 5,976,073 1,725,832 21 57,085,165 19,890 14,679,041 1,816,876 0 73,581,082 25,638 Total Cost Per Inmate: over $26,000 22 California State Prison, Calipatria I,III,IV 73,131,824 442,625 8,358,174 2,413,759 22 84,346,382 21,013 18,817,481 2,749,905 19,200 105,932,968 26,391 23 Mule Creek State Prison I,III,IV 66,934,086 396,863 7,494,038 2,164,205 23 76,989,192 21,392 16,131,102 3,257,216 135,562 96,513,071 26,817 24 Central California Women’s Facility INST,REC,COND 62,735,071 360,474 6,806,893 1,965,764 24 71,868,203 21,985 15,445,491 1,301,214 0 88,614,907 27,108 25 California State Prison, Los Angeles County I,III,IV 80,116,450 459,386 8,674,677 2,505,162 25 91,755,675 22,025 0 24,468,865 73,308 116,297,848 27,916 26 High Desert State Prison I,III,IV,REC 75,317,657 445,161 8,406,066 2,427,590 26 86,596,474 21,451 24,232,450 2,229,437 0 113,058,361 28,006 27 California Institution for Women INST,REC 44,054,091 190,547 3,598,138 1,039,107 27 48,881,883 28,288 0 1,045,577 0 49,927,460 28,893 28 Northern California Women’s Facility INST,REC 18,755,312 83,805 1,582,514 457,015 28 20,878,646 27,472 0 3,324,324 0 24,202,970 31,846 29 California State Prison, Sacramento I,IV 81,176,798 351,983 6,646,560 1,919,462 29 90,094,802 28,225 0 14,245,668 40,145 104,380,616 32,701 30 California State Prison, Corcoran I,III,IV,PHU,SHU 111,862,499 518,160 9,784,519 2,825,674 30 124,990,852 26,599 34,433,655 2,114,454 889,155 162,428,116 34,567 31 Pelican Bay State Prison I,III,IV,SHU 95,283,421 399,620 7,546,094 2,179,238 31 105,408,373 29,086 28,127,502 1,404,575 28,509 134,968,959 37,243 32 California Medical Facility I,II,III 111,539,034 347,682 6,565,352 1,896,010 32 120,348,078 38,169 0 1,214,247 0 121,562,325 38,554 Subtotals (institutions with inmates)c 2,602,997,798 15,419,979 291,178,455 84,089,496 2,993,685,728 21,408 211,704,782 221,079,948 3,766,000 3,430,236,458 24,530 33 California State Prison, Corcoran II and Substance Abuse Treatment Facility No inmates 96/97 3,771,630 0 0 0 33 3,771,630 0 0 712,189 0 4,483,819 0 Dept. of Mental Health hospitals (contracted) Hospitals 0 0 43,223,590 0 43,223,590 118,746 0 0 0 43,223,590 118,746 Totals (all institutions and DMH hospitals)c $2,606,769,428 $15,419,979 $334,402,045 $84,089,496 $3,040,680,948 $ 21,688$211,704,782 $221,792,137 $3,766,000 $3,477,943,867 $24,807 aSecurity Levels CAMP: Conservation camps with inmates trained in firefighting. Level I: Open dormitories without a secure perimeter. REC: Reception Center. Provides short-term housing to process, classify, and evaluate incoming inmates. Level II: Open dormitories with secure perimeter fences and armed coverage. INST: Institutional. For facilities with female inmates. May have inmates at all four security levels (Level I, II, III, IV). Level III:Individual cells, fenced perimeters, and armed coverage. Cells adjacent to exterior walls. SHU: Security Housing Unit. The most secure area within a Level IV prison designed to provide maximum coverage for Level IV:Individual cells, fenced or walled perimeters, electronic security, more staff, and armed officers both inside and outside problem offenders. the installation. Cells nonadjacent to exterior walls. PHU: Protective Housing Unit. For high-profile inmates and police officers. bMen and women. SQ: Alternate Program at San Quentin. A boot camp where inmates focused on studying and training. Program discontinued after FY 96/97. cDue to rounding of allocated amounts, some subtotals and totals are off by $1. COND: Condemned. Holds inmates with death sentences. 18 C A L I F O R N I A S T A T E A U D I T O R C A L I F O R N I A S T A T E A U D I T O R 19 Blank page inserted for reproduction purposes only. 20 Agency’s response to the report provided as text only: State of California YOUTH AND ADULT CORRECTIONAL AGENCY 1100 11th Street, Suite 400 Sacramento, CA 95814 (916) 323-6001 FAX (916) 442-2637 September 9, 1998 Kurt R. Sjoberg State Auditor Bureau of State Audits 555 Capitol Mall, Suite 300 Sacramento, CA 95814 Dear Mr. Sjoberg: We have reviewed the Bureau of State Audits (BSA) draft audit report dated September 3,1998. The California Department of Corrections (CDC) agrees that the Legislature should know both the operational and capital costs of incarcerating the State’s inmates in decision making for housing capacity. We would like to stress the importance of the following information related to the accuracy of inmate housing cost comparisons. • A standardized universal cost comparison model does not exist to calculate inmate housing costs. • Comparisons of strictly per capita costs can be very misleading, unless the comparison data includes the detail of what is included in that cost. • Reviewers of cost information should ensure that sufficient detail is provided to determine that like information is being compared fairly. The CDC would like to caution report users of the difficulty in analyzing capital outlay costs for a one year period. Capital costs may be appropriated in one year, however, expenditures for capital outlay projects will occur over three or more years. Thus, the construction status of each project in the year chosen for review will impact the usability and validity of the information. The auditors have stated that capital outlay costs for the new prisons drive up the cost per 1 inmate because of outstanding debt service. This is accurate. However, the auditors used a * model that assumes capital costs should be viewed over the term of the debt service payment, which is approximately 20 years. Since the reasonable useful life of a facility is 40 years or longer, capitalization over a longer period would seem appropriate for a State-owned facility. In either case, this one-time higher expense appears to be offset by the operational efficiencies of the new prisons that have resulted in comparable operational costs between older, lower security prisons and newer, higher security level prisons. *California State Auditor’s comments on this response begin on page 23. 21 Kurt R. Sjoberg Page 2 Should you have questions or need additional information, please contact Don Rex, Chief, Fiscal and Business Management Audits Unit, CDC at (916) 358-2070. Sincerely, Signature of Quintin L. Villanueva, Jr. QUINTIN L. VILLANUEVA, JR. Secretary cc: C. A. Terhune, Director, CDC Don Rex, Chief, Fiscal and Business Management Audits Unit, CDC 22 COMMENTS California State Auditor’s Comments on the Response From the Department of Corrections T o provide clarity and perspective, we are commenting on the Department of Corrections’ response to our audit report. The number corresponds to the number we have placed in the response. 1 In calculating capital costs of state prisons, we considered vari- ous methods. We originally tried to obtain the total construc- tion costs, including financing costs, of individual state prisons. However, this information was not available. Therefore, we used debt-service costs, in which debt service payments are made over a period of years. These payments generally last 20 years and primarily represent the payment of principal and interest on the bonds sold to finance construction of new prisons. In the ab- sence of actual cost data, we believe debt service fairly represents prison capital costs. n C A L I F O R N I A S T A T E A U D I T O R 23 cc: Members of the Legislature Office of the Lieutenant Governor Attorney General State Controller Legislative Analyst Assembly Office of Research Senate Office of Research Assembly Majority/Minority Consultants Senate Majority/Minority Consultants Capitol Press Corps 24 C A L I F O R N I A S T A T E A U D I T O R