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State Auditor Report Critical of Texas Prison Agribusiness

The auditors also found weaknesses in access to some sensitive information systems, but details were omitted from the publicly-available report in the interest of cyber-security.

The audit was based on data from calendar year 2018. In that year, TDCJ reported agribusiness sales of $92.6 million and costs of $61.4 million. Taken at face value, this means the agribusiness saved TDCJ $31.2 million that year.

The auditors reviewed a post statement that covered TDCJ’s cost for producing each of its 69 unique agricultural goods from calendar years 2014 to 2018. During those five years, TDCJ reported achieving $160.3 million in cost savings. However, the report showed the production of 32 of the 69 agricultural goods during that time period was not cost effective and TDCJ could have saved an additional $17 million by purchasing those products instead of producing them. An example is that it cost $2.7 million more to produce canned green beans than it would have cost to purchase them.

Thirteen products cost more to produce than procure during each of the five years. TDCJ would have saved $13 million by purchasing them. Four products cost more to produce than purchase in four of the five years. The department would have saved $1.5 million by purchasing them. Another five items cost more to produce than procure in three of the five years. TDCJ could have saved $1 million by purchasing them.

The categories which incurred losses were non-edible field crops ($6,830,017 in losses) and the canning plant ($3,320,516 in losses) over the five years. Both categories incurred losses each of the five years.

The profitable categories were the beef processing plant ($101,030,087), the pork processing plant ($47,666,176), livestock ($14,859,605) and edible crops ($6,830,017). All were profitable each of the five years.

Although the division’s primary objective is cost-effective production of agricultural products, its use of annual reviews and trend analyses to evaluate cost-effectiveness does not consistently identify products that are not cost effective. Division program supervisors met to review and analyze the cost statements, but the results of the meetings are not documented, making it impossible to understand the decision making.

Further, the cost statements are produced after the food services division of the prison system is required to submit its order for the next year, making it impossible to use the data in deciding what quantities of which items to order. For example, TDCJ could have saved $473,939 in 2018 by purchasing canned green beans instead of producing them. Yet TDCJ planted 406 acres of green beans for calendar year 2019.

The auditors recommended that TDCJ improve its cost accounting system by retaining, instead of overwriting, previous annual reconciliations, correcting errors between it and monthly farm inventory reports, and updating policies and procedures to include documentation of reconciliations of cash revenues and inventory data. TDCJ agreed with all of the recommendations.

Of special interest to prisoners is the fact that they are forced to labor in the fields without pay on crops of cotton that are unprofitable. So, they ask, what justifies the slavery? Surely not self-sufficiency as prison officials claim. Prison slavery remains an ideological imperative for politicians who yearn for the days of chattel slavery. How do you lose money in a business that employs slaves who are paid nothing for their labor? 


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