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Ohio Prisons Make Almost $5 Million in Improper Food and Education Payments

After receiving an anonymous tip about billing irregularities, the Ohio State Auditor conducted a special audit of the two state prisons: the Noble Correctional Institution (NCI) at Caldwell and the Belmont Correctional Institution (BCI) in St. Clairsville.

Released in November, 2001, the auditor's report showed that NCI's private food service contractors had knowingly over-billed the state $2.08 million for meals not served while NCI, BCI and other Ohio state prisons had paid over $2.8 million for college classes that prisoners did not, or were not eligible to, attend.

Dining for Dollars

In 1998, NCI executed a two year contract with Aramark , a private, for profit food service company based in Oakbrook, Illinois. Beginning November 1, 1998, Aramark was contracted to purchase, cook and serve all daily meals to the 2,200 prisoners at NCI. The contract called for Aramark to be paid $1.24 for each breakfast, lunch, dinner, snack and emergency meal served. The number of meals was to be determined by dining hall entry turnstile counts or the totals from scanners that read the prisoners' meal cards.

During the first six months of the contract, the actual counts showed an average of only 63% of NCI's prisoners attending any given meal.

In February, 1999, amid growing prisoner dissatisfaction with small portion sizes, food item substitution and substandard sanitation, officials from Aramark, NCI and the Ohio Department of Rehabilitation and Correction (DORC) met and verbally amended the contract to change the basis for calculating the number of meals served. Rather than actual meal counts, Aramark would be paid as if 90% of NCI's prisoners had attended each and every meal. In exchange, Aramark agreed to increase portion sizes. This verbal amendment was made retroactive to the first day of the contract and not reduced to writing until after the special audit was underway. Since prisoners were not actually given larger food portions "retroactively," this amounted to an outright giveaway to Aramark.

In May, 1999, at Aramark's request, the contract was again verbally amended. The new agreement provided that NCI would pay Aramark for serving three meals a day, seven days a week, to 100% of NCI's average weekly prisoner population, irrespective of the number of meals actually served.

In October, 1999, the single meal payment rate was increased to $1.27 from $1.24.

During the two year term of the contract, Aramark served 2,803,722 meals as determined by actual turnstile and card scanner counts. Based on the verbal amendments to the contract however, Aramark was paid as if they had served 4,462,649 meals during the two year period.

Under the terms of the contract as written, Aramark was entitled to payment of $3,517,305 for the actual number of meals served, however, the contractor submitted invoices for, and received payment of $5,598,537 as calculated under the terms of the verbally amended contracts, an overpayment of $2,081,233 or 59%

Aramark's contract expired on October 31, 2000. The following day, food service operations at NCI were taken over by state employees at much lower cost. [ PLN , February 2001]

In his report, state auditor Jim Peters recommended that the Ohio Department of Administrative Services (ODAS) establish policies and procedures to require: (a) approval of all amendments to competitively bid contracts; (b) all contract amendments to be in writing, and c) rebidding of any contract where changes result in an increase of the contract price in excess of 20%. Post audit negotiations with Aramark are continuing.

School of Thieves

On January 21, 2000, while the Aramark audit was underway, education department employees at NCI and BCI confided to the state auditor that there appeared to be irregularities in the administration of the college program at their prisons.

Prison employees told the auditor that ineligible prisoners were enrolled in the college programs, that colleges did not monitor prisoner participation and attendance, that colleges billed DORC for prisoners who were not enrolled in the program, that invoices which employees knew to be fraudulent were submitted for payment, and that Dr. Samuel Jackson, DORC's Director of Higher Education, instructed the colleges to bill DORC for the full amount of the educational grants in advance without regard for the number of prisoners actually attending classes.

These allegations were considered by the state's Special Audit Committee which decided on February 2, 2000, to initiate an audit of the prison college programs.

The auditor determined that DORC contracted with 16 various academic and vocational institutions to provide educational programs for Ohio's prisoners. During 1999, the alleged enrollment in these programs exceeded 13,000 prisoners, representing one quarter of Ohio's adult prisoner population.

To enroll in a college program, an Ohio prisoners was required to posses a high school diploma or GED certificate, be eligible for parole in less than five years, have fewer than three separate adult incarcerations, not have previously earned a 2 year or four year college degree, and meet certain other administrative and academic requirements.

The colleges provided educational courses on the prison's grounds. An eligible prisoner could enroll in these courses and, upon successful completion, earn a one or two year certificate in various trades, including business, culinary arts and computers.

The colleges were paid through "personal services contracts" which required each college to submit invoices to the participating prisons for approval and subsequent payment by DORC. The language of the contracts allowed invoices to be written and payments to be made based on student enrollment at the beginning of the academic year, rather than actual classroom attendance. DORC paid the colleges from $1,000 to $3,000 per student, per course. The funds for payments flowed from state appropriations and U.S. Department of Education grants.

After an exhaustive examination of the DORC college program, the state auditor found significant instances of noncompliance with established procedures and policies. Among other irregularities, the internal review disclosed that DORC had paid the participating colleges $615,650 for programs where documentation did not exist to support the prisoner's eligibility or their attendance.

The auditor further found that DORC had paid the colleges for $2,233,291 for programs where the documentation did exist and showed that either the prisoners were ineligible to attend or did not attend the class at all.

Consequent to the audit, the state disciplined and reassigned several officials, including Dr. Jackson. Jerry McGlone, superintendent of the Ohio Central School System, who is also a DORC employee, was subjected to unspecified disciplinary action. McGlone authored many of the policies and procedures on prison education which were not followed or obeyed. The state also implemented internal audits and tightened polices and procedures regarding prisoner school attendance.

Because a portion of the Ohio prison college program is federally funded, the State Auditor forwarded a copy of his report to the U.S. Department of Education for their review and action.

Sources: Special Audit Report: Ohio Department of Rehabilitation and Correction ,Aramark Contract and the College Programs , Columbus Dispatch

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