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South Carolina Prison Industries Program Implements Some Audit Recommendations

The South Carolina Department of Corrections (SCDC) has implemented 5 of 13 recommendations made in an October 2003 report that criticized its Prison Industries Program (PIP), according to a May 2006 follow-up report. In its original report the South Carolina General Assemblys Legislative Audit Council (LAC) chided the SCDC for generally poor oversight of the PIP and practices that provided collaborating companies a potentially unfair advantage in the marketplace. [See PLN, February 2005, for more on the 2003 report].

The PIP employs more than 1,900 prisoners, mostly through arrangements with private companies. The SCDC supplies the prisoners and the buildings, and the companies use the subsidized labor to manufacture their products. The companies then compensate the SCDC, which in turn pays the prisoners hourly wages of between 35 cents and $6.50 per hour.

One area of concern addressed in the 2003 report was the PIPs failure to collect appropriate victim restitution from prisoner wages. The report advised the SCDC to review sentencing records to ensure that these deductions are properly made. During the follow-up review auditors found that in 2005 the SCDC had documented victim restitution deductions--apparently enough of an improvement to consider the recommendation implemented.

Billing was another problem area. The original audit noted that the SCDC sometimes saved companies money by either not billing them or under billing them for prisoner labor. In the update, no instances of improper billing were uncovered, the auditors said.

Along with providing sweet billing arrangements, the SCDC was also paying up to half of the prisoners training wages for months at a time. Even the U.S. Justice Department took notice of this practice and, in a May 2003 letter, chastised the SCDC for providing these companies with a benefit unavailable to other companies in the community. During the follow-up review the SCDC stated that the practice had been discontinued and that the companies currently pay the entire amount of inmate training wages.

The 2003 report also observed that the SCDC had not consulted with the Employment Security Commission (ESC) when establishing the training period for prisoner workers. In February 2006, however, auditors found the SCDC and the ESC had agreed that the web-based national Occupational Information Network would be an appropriate instrument to evaluate training criteria.

Finally, the original report recommended establishing goals and performance measures ... that accurately reflect the degree to which the [PIP] is assisting the department in meeting its mission and to report this information. (The mission, ostensibly, is to provide prisoners with educational and vocational training, engage them in productive work, and prepare them for re-entry into their communities.) In the update auditors reported that the SCDC published performance measures in its fiscal year 2004-5 annual accountability report, though no specifics were given. The follow-up also noted that the SCDC has published broad goals that pertain to its mission.

Despite the progress, the SCDC has yet to take action on the other recommendations, including working with the ESC to ensure that low-paid prisoners do not leech jobs from the community; listing perks given to private companies, such as nominal rent and discounted utilities; subjecting contracts to use prisoner labor to a bidding process; and ensuring that all required deductions--including child support--are made from prisoner wages. Both the original report and the follow-up can be viewed online at www.state.sc.us/sclac.

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