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Audits Identify Problems with Michigan Prisoner ReEntry Initiative

by David M. Reutter

Two audit reports, one by Michigan’s Office of the Auditor General in 2012 and the other by the State Budget Office in 2011, both found shortcomings with the Michigan Prisoner ReEntry Initiative (MPRI).

Michigan took a bold step in 2005 by implementing MPRI. The program abandoned typical tough-on-crime practices and instead adopted policies designed “to significantly reduce crime and enhance public safety by implementing a seamless system of services for offenders from the time they enter into prison through their transition, reintegration and aftercare in their communities.” For example, MPRI offers parolees assistance with housing, transportation, employment, health care and education.

The implementation of MPRI services by Department of Corrections (DOC) staff and partner community agencies statewide was coordinated by the Offender Reentry Services Section (ORSS), a new agency established within the DOC. ORSS was also responsible for initiating and monitoring certain offender reentry contracts. Oversight of the contracting and contract monitoring processes is provided by the DOC’s Bureau of Fiscal Management.

For fiscal year 2009-10, MPRI’s budget was $52.7 million; of that amount, $27 million was for contracts with “adminis-trative agencies [that] serve as fiduciary agents and subcontract with other agencies to provide MPRI services.” Special needs contracts received $10.4 million to serve mentally ill, developmentally disabled, juvenile and medically fragile of-fenders. Around $4.5 million was budgeted for contracts to expand risk reduction services such as substance abuse treatment, sex offender treatment, parole supervision and day reporting. The MPRI’s budget also allotted $1.9 million to provide capacity building and technical assistance services.

An audit by Michigan’s Office of the Auditor General, released in February 2012, concluded “that DOC’s efforts to oversee MPRI services were moderately effective” but lacked adequate monitoring. Notably, the audit found that the DOC “had not established a comprehensive process to monitor and evaluate the effectiveness of MPRI services,” and “did not have sufficient internal control to effectively implement MPRI.”

With respect to the first finding, the audit determined the DOC did not require contract community agencies to report program data in a standardized format; some of the agencies did not submit all of the requested data while others did not report any data.
Further, the DOC “did not perform a complete analysis of MPRI outcomes,” including recidivism rate data according to whether or not parolees utilized MPRI services.

“We have had some data problems for years and are working with the state Public Health Department on a five-year contract to evaluate prisoner re-entry,” acknowledged DOC spokesman Russell Marlan.

In regard to the second audit finding, due to a lack of internal controls the DOC “could not determine that MPRI parolees received and completed appropriate services, that the services received were properly approved, or that DOC staff could efficiently perform their MPRI duties.”

The audit also included recidivism rate data for Michigan prisoners paroled during calendar year 2007, based on whether they participated in MPRI programs or not.
Interestingly, parolees who did not receive MPRI services had lower recidivism rates – 11% after one year compared with 15% for MPRI parolees; 21% after two years compared with 28% for MPRI parolees; and 24% after three years compared with 33% for MPRI parolees. The audit noted, however, that “MPRI parolees have a higher risk of recidivism due to the criminogenic factors that the MPRI services are designed to address.” Thus, comparing the MPRI and non-MPRI recidivism data “would not provide a valid or reliable measurement of the actual impact that MPRI had on the recidivism outcomes of MPRI participants.”

The DOC agreed with the audit’s findings and its recommendations to correct the identified deficiencies, including establishing “a comprehensive process to monitor and evaluate the effectiveness of MPRI services.”

Previously, a February 2011 audit by Michigan’s State Budget Office made several material findings that also were critical of MPRI. The first criticism involved the failure of the DOC to fully describe contract change requests and justifications; one example involved $679,800 budgeted for services that were not outlined in a contract or its amendment.

Over a five-year period, four of five risk reduction contract changes failed to disclose rate increases, changes in pricing methods or the reasons for same. Those changes resulted in the day reporting rate for male parolees to increase “from $17.46/day to $38.50/day” and the rate for female parolees to jump “from $31.99/day to $45.54/day.” Eight months later, the program switched to a cost reimbursement rate.

The failure to disclose also affected MPRI’s contract to provide special needs services. The original one-year contract totaled close to $2.4 million, but amendments for three additional years amounted to approximately $16 million.

Another material issue cited in the State Budget Office audit was the DOC’s ineffective monitoring of MPRI contracts to ensure that contractors fulfilled expectations in a satisfactory fashion, and to verify the contracts were necessary. The audit also found the “DOC did not ensure that MPRI contractors effectively developed subcontracts and monitored their subcontractors.” Finally, the audit faulted the DOC for failing to ensure “that its staff obtained and reviewed invoices and necessary supporting documentation to ensure that contract changes were eligible, authorized, fair and accurate.”

Another six findings in the audit, although not material, were still indicative of basic problems in fully realizing MPRI’s goals. Program rules or guidance for MPRI’s comprehensive plan for administrative agencies and subcontractors was not fully developed. The DOC did not even have rules or guidance for awarding funds.

That failure resulted in no work hour limits or compensation reimbursement limits for the positions the program funded. Auditors found the DOC had allocated $100,000 for a full-time position for a community coordinator position. The person who filled that position also received $30,000 to serve as a community coordinator overseeing federal grants, plus was the paid executive director of a non-profit organization.

The other audit findings addressed issues that revealed a basic lack of oversight of MPRI services. The DOC agreed with the findings and recommendations, and the audit noted that the DOC had made several improvements with respect to measuring MPRI’s implementation and outcome goals.

MPRI’s budget appropriation for fiscal year 2010-11 was $52.1 million (including federal reentry grant funds), and the program requested $53.9 million in funding for fiscal year 2011-12.

Sources: “Michigan Prisoner Reentry Contracting Practices,” Michigan State Budget Office, Office of Internal Audit Services (February 2011); “Performance Audit of the MPRI,” Office of the Auditor General, Report No. 471-0400-11 (February 2012); Detroit News

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