Audit: Effect of CDCR Operations on the State Budget

California Department of Corrections and Rehabilitation:

Inmates Sentenced Under the Three Strikes Law and a Small Number of Inmates Receiving Specialty Health Care Represent Significant Costs

HIGHLIGHTS

Our review of California's increasing prison cost as a proportion of the state budget and California Department of Corrections and Rehabilitation's (Corrections) operations revealed the  following:

• Inmates incarcerated under the three strikes law (striker inmates):
  • Make up 25 percent of the inmate population as of April 2009.
  • Receive sentences that are, on average, nine years longer-resulting in about $19.2 billion in additional costs over the duration of their incarceration.
  • Include many individuals currently convicted for an offense that is not a strike, were convicted of committing multiple serious or violent offenses on the same day, and some that committed strikeable offenses as a juvenile.
• Inmate health care costs are significant to the cost of housing inmates. In fiscal year 2007-08, $529 million was incurred for contracted services by specialty health care providers. Additionally:
  • 30 percent of the inmates receiving such care cost more than $427 million.
  • The costs for the remaining 70 percent averaged just over $1,000 per inmate.
  • The costs for those inmates who died during the last quarter ranged from $150 for one inmate to more than $1 million for another
• A significant portion of the increased workload due to medical guarding and transportation is covered through overtime.
• The large leave balances of custody staff, to which the furlough program has contributed a significant amount, will eventually cost the State from $546 million to more than $1 billion.

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Contracting Practices for Private Community Correctional Facilities, CDC

From the Introduction section of the Auditor's report:
In 1965, to provide needed housing, supervision, counseling, and other correctional programs for inmates committed to its institutions, state law authorized the department to establish, operate, and contract for "community correctional centers," commonly referred to as CCFs. The Community Correctional Facilities Administration, within the Institutions Division of the department, administers support functions, such as developing and processing CCF contracts. The department's Office of Contract Services also participates in contract matters, such as the administration of the original contract and any amendments.

Department of Corrections & Rehabilitation: It Does Not Always Follow Its Policies When Discharging

As requested by the Joint Legislative Audit Committee, the Bureau of State Audits presents its audit report concerning the Department of Corrections and Rehabilitation's (Corrections) adult parole discharge practices. This report concludes that Corrections does not always follow its policies when discharging parolees. With the exception of deported parolees, its policies require parole agents to initiate a discharge review report for all eligible parolees. Corrections' data indicate that a total of 56,329 parolees were discharged between January 1, 2007, and March 31, 2008.

Intermediate Sanction Programs Lack Performance Benchmarks at CDCR

From the Introduction section of the Auditor's report:
According to the former deputy director of the parole division, the programs that eventually were established under the department's New Parole Model were intended primarily to fill perceived gaps in the department's parole process. The department hoped to help parolees reintegrate into communities by implementing prerelease programs aimed at matching future parolees to the programs and services they needed and by expanding post-release programs aimed at improving newly released parolees' access to those programs and services, thereby reducing the recidivism rate. The department also planned to implement three intermediate sanction programs that could be used as an alternative to prison for low-risk parolees who commit minor crimes or technical violations of their parole conditions.

California Department of Corrections Audit: Issues Identified and Key Recommendations

From the Introduction page of the report:
We have been asked to briefly describe the range of correctional audits we have performed in recent years, the progress of reforms to date, and our thoughts on the reorganization. Over the past five years we have completed seven audits that focused on four particularly important areas in which we concluded that the Department of Corrections needs to improve its performance: In the time allowed today, we will briefly summarize some of the key recommendations the Bureau of State Audits (bureau) included in these audit reports and Corrections' reports regarding its progress in implementing them.

Employee Disciplinary Procedures, CDC

From the Introduction section of the Auditor's report:
Recent studies criticized the department's process for handling employee disciplinary matters. For example, the Office of the Inspector General (inspector general)-an independent agency that reports directly to the governor and conducts audits, investigations, and special reviews of the State's youth and adult correctional agencies-criticized the department's handling of employee disciplinary matters in two reports dated October 2001 and March 2002. Furthermore, the department is currently involved in a number of employment-related lawsuits and appeals at the State Personnel Board (board). Concerns from the Legislature regarding the department's management and treatment of its employees and the legal expenses it incurs from employment-related matters led to the request for the current audit.

Rapid Rise in Contract Payments for Inpatient and Outpatient Care, CDC

From the Introduction section of the Auditor's report:
To provide medically necessary health care to inmates, Corrections operates four types of health care facilities: four general acute care hospitals, 14 correctional treatment centers, 13 outpatient housing units, and one skilled nursing facility. Additionally, it contracts with the Department of Mental Health to provide all inpatient acute mental health services to certain inmates at the California Medical Facility in Vacaville and to some of the inmates at the correctional treatment center at Salinas Valley State Prison. For care not available in its own facilities, Corrections contracts with medical service providers in the surrounding communities, including hospitals. Table 1 presents the types of health care facilities, the number of doctors available on site, the average daily inmate population, and the average daily inmate population per doctor at each institution during fiscal year 2002-03.

Plans to Build a New Condemned-Inmate Complex at CSP-San Quentin

From the Introduction section of the Auditor's report:
All men sentenced to death in California are sent to San Quentin to fulfill their sentence. Today, the department uses three different facilities at San Quentin to house the more than 600 male condemned inmates of whom it has custody, as Table 1 on the following page indicates. Each condemned inmate has his own cell within these facilities. (See Figure 2 on page 9 for an aerial view of San Quentin.) The original death row facility, located atop San Quentin's North Block facility, built in 1934, occupies the building's entire sixth floor. The department refers to this facility as North Segregation. The facility can house 68 condemned inmates and as of January 2004 was filled to capacity. The department houses only its most cooperative grade A condemned inmates in North Segregation because its design provides the most freedom of movement within the three facilities' housing and exercise areas. These inmates have access to an exercise yard on the building's roof.

Medical Service Contracts and Claims, California Department of Corrections

From the Introduction section of the Auditor's report:
For care not available in its own facilities, Corrections contracts with medical service providers in the community. Corrections' costs incurred for contracted inmate medical and laboratory services have continued to increase in each of the last four fiscal years by more than 15 percent. In fiscal year 2001-02, costs increased by 29 percent and fiscal year 2002-03 witnessed another 20 percent increase. Figure 1 on the following page shows the variety of medical service providers that Corrections contracts with to deliver health care services to inmates, including community hospitals throughout the State that provide inpatient and outpatient medical services and specialty care physicians such as oncologists and radiologists. To provide temporary medical services when prison medical staff are unavailable or on long-term sick leave, Corrections uses medical registry contracts.

Ongoing Fiscal Problems at the California Department of Corrections

From the Introduction section of the Auditor's report:
Of the department's more than 48,000 employees in fiscal year 2001-02, almost 23,000 were custody staff. Custody staff are directly responsible for inmate supervision, which often requires that positions be covered around the clock. These positions are generally filled by four classifications of employees: captains, lieutenants, sergeants, and correctional officers. In this report, we focus on the department's correctional officers for three reasons: (1) They make up about 85 percent of the department's custody staff; (2) they account for more than 80 percent of the custody staff overtime; and (3) theirs is the only custody classification covered by the State's labor agreement with the California Correctional Peace Officers Association (CCPOA).

Fiscal Practices and Internal Controls of the California Department of Corrections

From the Introduction section of the Auditor's report:
As the agency responsible for overseeing and managing California's 33 prisons (institutions), the California Department of Corrections (department) operates the largest prison system in the United States. For fiscal year 2001-02, the department projected that it would need 46,548 employees to fulfill its responsibilities. The department's mission is to control, care for, and treat men and women who are convicted of serious crimes or admitted to the State's civil narcotics program and who are then placed in the department's Institution, Health Care Services, or Community Correctional programs. The department is organized into four programs: Central Administration, Health Care Services, Community Correctional (Paroles), and Institution. Through the Institution Program, the department provides prison inmates with safe, secure detention facilities and necessary services, such as food, clothing, and medical care. As Figure 1 on the following page illustrates, costs for this program alone represent $3.5 billion, or roughly 73 percent, of the $4.8 billion that is the department's total approved budget from all funding sources for fiscal year 2001-02.

Department of Corrections’ Parole Outpatient Clinic Program

From the Introduction section of the Auditor's report:
The Parole and Community Services Division within the department's Field Operations area is responsible for supervising and providing services to felons who have been paroled. The level of supervision a parolee receives is based on factors related to the offender's history of violence and current service needs. Case assessments dictate the placement of selected parolees in a category of supervision intended to prevent, detect, or interrupt behavior likely to endanger the community or themselves. The Parole and Community Services Division oversees 136 parole offices and four regional parole outpatient clinics (clinic) that provide services statewide. The parole agent is responsible for the following tasks: supervising parolees; arranging services such as housing, medical care, employment, counseling, education, and social activities; investigating alleged parole violations; and helping assess a parolee's risk to the community and the type of services he or she requires. The department employs more than 1,700 parole agents who are responsible for the supervision of approximately 121,000 parolees throughout the State....

Utilizing Managed Care Practices, CDC

From the Results section of the Auditor's report:
The department is required to provide medically necessary health care to inmates. In 1992, the department established a health care services division, whose mission is to manage and deliver health care statewide to the inmate population consistent with adopted standards for quality and scope of services within a custodial environment. The health care services division oversees the delivery of medical, dental, and psychiatric services at the institutions. To accomplish its mission, the division operates four licensed hospitals, a skilled nursing facility, 16 correctional treatment centers (CTCs), and 12 outpatient housing units. Each licensed hospital provides 24-hour acute care services to patients who require a high level of care. These hospitals offer medical, nursing, surgical, anesthesia, laboratory, radiology, pharmacy, and dietary services...

Excessive Personnel Costs Due to Poor Management Practices

From the Results section of the Auditor's report:
The department could save about $17 million a year if average sick leave use among custody staff dropped to 48 hours per year and roughly $29 million a year if it reduced its average sick leave usage to a level comparable to that of the California Highway Patrol. Besides driving up costs, the extensive use of overtime to cover employees out on sick leave often allows custody staff to earn more than their superiors; many therefore choose not to accept promotions. The department's attempts to discipline staff who claim a lot of sick leave have been ineffective in curbing excessive use. Its efforts to control sick leave costs are hampered because it does not sufficiently track the reasons that custody staff use sick leave to determine a baseline level of back-up relief staff needed and to detect patterns of excessive use...

Wasco State Prison: Concerns About Institutional Safety & Security

From the Introduction section of the Auditor's report:
In April 1999, several events occurred at Wasco that raised concerns about the safety of correctional staff and inmates. One incident involved prisoners obtaining confidential information relating to correctional officers and administrative staff. In the same month, Wasco also suffered a complete power outage that lasted for nearly seven hours. The failure of a single electrical transformer terminated the institution's incoming utility power. Because the blown transformer operates on the same electrical circuit as the emergency generators, the generators were unable to respond...

Prison Industry Authority: Outside Purchase of Goods & Services

From the Introduction section of the Auditor's report:
The California Penal Code, Section 2807(b), requires state agencies to purchase the PIA's products or the PIA can grant state agencies a waiver allowing them to purchase goods and services from other sources. The PIA can also sell its products and services to cities, counties, special districts, and public schools in the State, as well as to public agencies in other states whose laws permit it, federal agencies, and foreign governments and businesses. The CDC is the PIA's largest single customer. If the PIA cannot produce enough products or render services to meet demand, it purchases comparable finished goods and services from the private sector. The PIA calls this activity a "buyout." The PIA subsequently resells these items to its customers at its published prices. Buyouts frequently occur for the PIA's food, including bread and milk. From July 1994 through December 1997, the PIA purchased finished goods and services, including clothing, printing, and food items, 656 times from the private sector...

The Cost of Incarcerating Inmates in State-Run Prisons

Each fiscal year, the department calculates and publishes the amount of incarceration costs per inmate. The department's calculation focuses primarily on those 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. We reviewed the department's calculation and found that, although it appropriately reflects many of the operating costs, it does not include all costs incurred by the State. When we included all of the costs, 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 total difference of costs to incarcerate inmates between the department's calculation and our estimate is $517 million....