20-30040-07

Purpose of the Report

In accordance with Title 24 of the Alaska Statutes and a special request by the Legislative Budget and Audit Committee, we have conducted an audit to review and assess the equity of funding allocated through the community jails program administered by the Department of Corrections (DOC). The program provides funding to 15 communities for the short-term confinement of persons detained under state law.
BACKGROUND INFORMATION

It has been more than ten years since the funding levels for community jails have been thoroughly reviewed. The last review was performed through the efforts of the governor’s task force in 1993-1994. The task force established the funding levels for each community that essentially have been brought forward annually ever since. With the exception of the FY 06 increase provided to Kotzebue, the most recent ten percent raises were applied evenly across-the-board.

With the passage of time and turnover in personnel, DOC is not certain how the task force arrived at the funding levels for the various communities. According to a former member of the task force, each community’s funding was based on budgeted, direct operating costs submitted by the community officials. These totals were adjusted upwards by the task force to provide funding to cover indirect or overhead costs. The task force expected that the communities would cover a small percentage of the total jail operating costs.

Report Conclusions

A summary of the conclusions follows:

• Most communities report that state funding is still insufficient to cover operating costs;
• The extent of the funding shortfall varies substantially between communities;
• The current funding process does not require reporting or review of actual local jail operating expenditures; and
• Reimbursement for jail operating costs are not related to actual local operating costs.

Two communities indicated that funding was sufficient to cover their operating costs; however, the other 13 communities reported that they were required to cover some of their jail operating costs.

Our initial analysis of local jail budgeted operating costs, compared to program funding, indicated that most of the communities were being required to bear some operating costs for their local jail. Additionally, the amount of the local subsidy appeared to vary significantly among communities. Our detailed analysis of four communities, using FY 07 budget totals, showed a 40 percent disparity between communities for similar operating cost factors.

The detailed budgets attached to each year’s contract do not represent the actual community jail budgets and expenditures. Additionally, DOC does not require contractors to report their actual expenditures. As a result, DOC is funding a program without clearly knowing what operational costs are involved.

There is no direct relationship between the funding provided and the actual operating costs to communities with local jails. Rather than an analysis of operating costs, the contracts are based on historical amounts with substantial increases in the last two years.

Findings and Recommendations

DOC’s commissioner should restructure the community jails program to promote equity between communities.

The current allocation of funding for the community jails program is based on decade-old financial information, resulting in an unequal distribution of funding to communities operating jails. DOC should develop allowable standardized costs for jail operations. While this would not necessarily lead to full funding, it would provide a basis for correcting the inequitable distribution of funds between participating communities.

The department should then implement procedures to ensure the financial information submitted by local communities is accurate. The department could expand its existing operational standards reviews to include confirmation of some financial information. Alternatively, the department could modify its distribution of funds from contracts to grants, bringing the financial assistance provided to the communities under the State’s single audit process.