Michigan Auditor Report on Prison Food Services 2008
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MICHIGAN OFFICE OF THE AUDITOR GENERAL AUDIT REPORT PERFORMANCE AUDIT OF PRISONER FOOD SERVICES DEPARTMENT OF CORRECTIONS June 2008 THOMAS H. MCTAVISH, C.P.A. AUDITOR GENERAL 471-0621-07L The auditor general shall conduct post audits of financial transactions and accounts of the state and of all branches, departments, offices, boards, commissions, agencies, authorities and institutions of the state established by this constitution or by law, and performance post audits thereof. – Article IV, Section 53 of the Michigan Constitution Audit report information can be accessed at: http://audgen.michigan.gov Michigan Off ice of the Auditor General REPORT SUMMARY Performance Audit Prisoner Food Services Department of Corrections Report Number: 471-0621-07L Released: June 2008 Within the Department of Corrections (DOC), Correctional Facilities Administration is responsible for facility operation, including prisoner food services operations. DOC's goal is to provide the greatest amount of public protection while making the most efficient use of the State's resources. Audit Objective: To assess the effectiveness of DOC's efforts to manage food services costs. Audit Conclusion: We concluded that DOC's efforts to manage food services costs were moderately effective. We noted two material conditions (Findings 1 and 2) and three reportable conditions (Findings 3 through 5). Material Conditions: DOC needs to consider additional ways to reduce the costs of providing prisoner meals (Finding 1). DOC did not effectively monitor food production (Finding 2). Reportable Conditions: DOC's correctional facilities did not consistently ensure that they obtained food commodities at the best price (Finding 3). DOC did not ensure that its correctional facilities had implemented sufficient controls to safeguard food inventory stored at the warehouses (Finding 4). DOC did not ensure that its correctional facilities correctly and consistently classified prisoner food services wages in the State's accounting records (Finding 5). ~~~~~~~~~~ Agency Response: Our audit report includes 5 findings and 5 corresponding recommendations. DOC's preliminary response indicates that it agrees with all of the recommendations and will comply with them. ~~~~~~~~~~ A copy of the full report can be obtained by calling 517.334.8050 or by visiting our Web site at: http://audgen.michigan.gov Michigan Office of the Auditor General 201 N. Washington Square Lansing, Michigan 48913 Thomas H. McTavish, C.P.A. Auditor General Scott M. Strong, C.P.A., C.I.A. Deputy Auditor General STATE OF MICHIGAN OFFICE OF THE AUDITOR GENERAL 201 N. WASHINGTON SQUARE LANSING, MICHIGAN 48913 (517) 334-8050 FAX (517) 334-8079 THOMAS H. MCTAVISH, C.P.A. AUDITOR GENERAL June 13, 2008 Ms. Patricia L. Caruso, Director Department of Corrections Grandview Plaza Building Lansing, Michigan Dear Ms. Caruso: This is our report on the performance audit of Prisoner Food Services, Department of Corrections. This report contains our report summary; description of services; audit objective, scope, and methodology and agency responses and prior audit follow-up; comment, findings, recommendations, and agency preliminary responses; four exhibits, presented as supplemental information; and a glossary of acronyms and terms. The agency preliminary responses were taken from the agency's responses subsequent to our audit fieldwork. The Michigan Compiled Laws and administrative procedures require that the audited agency develop a formal response within 60 days after release of the audit report. We appreciate the courtesy and cooperation extended to us during this audit. Sincerely, Thomas H. McTavish, C.P.A. Auditor General 471-0621-07L This Page Left Intentionally Blank 4 471-0621-07L TABLE OF CONTENTS PRISONER FOOD SERVICES DEPARTMENT OF CORRECTIONS Page INTRODUCTION Report Summary 1 Report Letter 3 Description of Services 7 Audit Objective, Scope, and Methodology and Agency Responses and Prior Audit Follow-Up 9 COMMENT, FINDINGS, RECOMMENDATIONS, AND AGENCY PRELIMINARY RESPONSES Food Services 12 1. Food Services Cost Savings Measures 12 2. Food Production 16 3. Food Commodity Purchases 19 4. Warehouse Controls Over Food Inventory 21 5. Prisoner Food Services Wages 24 SUPPLEMENTAL INFORMATION Exhibit 1 - Food Services Cost Per Prisoner Per Day 27 Exhibit 2 - Food Services Costs by Facility and Central Function 28 Exhibit 3 - Comparison of Michigan's Prisoner Food Services to Selected Food Service Contracts 30 Exhibit 4 - Payments to Prisoner Food Services Workers by Facility 32 5 471-0621-07L GLOSSARY Glossary of Acronyms and Terms 35 6 471-0621-07L Description of Services The Department of Corrections' (DOC's) goal* is to provide the greatest amount of public protection while making the most efficient use of the State's resources. DOC maintained 51 facilities (42 correctional facilities and 9 camps) located throughout the State and was responsible for the custody and safety of 51,165 prisoners, on average, during fiscal year 2006-07. Within DOC, Correctional Facilities Administration (CFA) is responsible for facility operation, including prisoner food services operations. CFA divided the facilities into three geographical regions. Each region has a regional prison administrator who is responsible for overseeing the operations of the facilities within their region. At the facility level, the wardens are responsible for overseeing daily operations, including food services operations. Food Services The American Correctional Association (ACA) has developed national standards with which correctional facilities must comply to achieve accreditation. Accreditation standards help ensure that a correctional facility maintains a balance between protecting the public and providing an environment that safeguards the life, health, and safety of staff and offenders. ACA standards reflect practical up-to-date policies and procedures and function as a management tool for correctional facilities. ACA standards are either mandatory or nonmandatory. A correctional facility must comply with 100% of the mandatory standards and at least 90% of nonmandatory standards to be accredited. ACA mandatory standard 4-4316 requires correctional facilities to maintain documentation that dietary allowances provided to prisoners are reviewed at least annually to ensure that they meet the nationally recommended dietary allowances for basic nutrition. CFA has adopted a Statewide menu for correctional facilities based on the Dietary Guidelines for Americans issued by the U.S. Department of Agriculture and the U.S. Department of Health and Human Services. The facilities are responsible for implementing the menu and ensuring that prisoners receive nutritional meals. Facility employees supervise prisoner workers who prepare and serve the meals. Although the Statewide menu is pre-planned, CFA allows facilities the flexibility to deviate from the Statewide menu for up to two meals per week as long as the meals are consistent with * See glossary at end of report for definition. 7 471-0621-07L the Dietary Guidelines for Americans. Facilities may also deviate from the Statewide menu with food items of equal nutritional value. If the facilities substitute menu items, they are required to report these substitutions to CFA annually. The menu is designed to provide male prisoners with an average of 2,900 calories per day and female prisoners an average of 2,600 calories per day. The Department of Management and Budget (DMB), in conjunction with DOC, is responsible for negotiating contracts that enable the correctional facilities to obtain quality food commodities at the best possible price. Facilities are allowed to make specialty purchases for contracted food commodities without using the DMB-approved contract if the food price is cost beneficial to the State. However, not all food commodities are included in the DMB contracts. Facilities are allowed to purchase produce items directly from local produce vendors. In addition, facilities purchase milk, juice, meat, and kitchen cleaning supplies from DOC's Michigan State Industries. During fiscal year 2006-07, DOC expended $46.2 million on food purchases and $37.2 million on food services staff wages, resulting in a Statewide average prisoner food and labor cost per day of $2.48 and $2.50, respectively (see Exhibits 1 and 2). In addition, DOC's correctional facilities had 490 food services staff as of September 30, 2007. 8 471-0621-07L Audit Objective, Scope, and Methodology and Agency Responses and Prior Audit Follow-Up Audit Objective The objective of our performance audit* of Prisoner Food Services, Department of Corrections (DOC), was to assess the effectiveness* of DOC's efforts to manage food services costs. Audit Scope Our audit scope was to examine the program and other records related to prisoner food services. Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances. Our audit procedures, conducted from July 2007 through February 2008, generally covered the period October 1, 2004 through September 30, 2007. Specifically, we reviewed records related to food production, food procurement, food contracts, food inventory, the Statewide menu, and prisoner pay for food services employment at 13 correctional facilities (Bellamy Creek Correctional Facility, Earnest C. Brooks Correctional Facility, G. Robert Cotton Correctional Facility, Hiawatha Correctional Facility, Ionia Maximum Correctional Facility, Kinross Correctional Facility, Mid-Michigan Correctional Facility, Mound Correctional Facility, Muskegon Correctional Facility, Oaks Correctional Facility, Pine River Correctional Facility, Pugsley Correctional Facility, and Ryan Correctional Facility) and the Department of Corrections' central office operations. We judgmentally selected and performed on-site visits at the 13 correctional facilities based on their geographical location, facility characteristics, and other data. Supplemental information was provided by the Department of Corrections and is presented in Exhibits 1 through 4. Our audit was not directed toward expressing a conclusion on this information and, accordingly, we express no conclusion on it. Audit Methodology Our audit methodology included a preliminary review of prisoner food services operations. This review included interviewing various DOC staff and reviewing * See glossary at end of report for definition. 9 471-0621-07L applicable statutes, policies and procedures, DOC reports, legislative reports, and other references. In addition, we visited one correctional facility to conduct additional interviews with DOC staff and to review documents related to prisoner food services. To accomplish our audit objective, we reviewed DOC food cost reports and food production work sheets, documentation related to food commodity purchases, Statewide food commodity contracts, and private vendor contracts for food services. We also reviewed DOC's process for establishing, modifying, and monitoring the Statewide menu. During our visits to the 13 correctional facilities, we judgmentally selected two weeks of food production work sheets for the lunch and dinner meals and evaluated the number of main entrée items produced and meals served compared to the correctional facilities' institutional count*. Based on the results of our analysis, we calculated potential Statewide savings and cost estimates. These results can be found in Findings 1 and 2. Also, we collected data on opportunity buys* and assessed controls over food inventory in the facilities' warehouses. In addition, we analyzed a selection of food invoices from the months of August 2006 and May 2007 to determine whether facilities were complying with State contracts. Agency Responses and Prior Audit Follow-Up Our audit report includes 5 findings and 5 corresponding recommendations. DOC's preliminary response indicates that it agrees with all of the recommendations and will comply with them. The agency preliminary response that follows each recommendation in our report was taken from the agency's written comments and oral discussion subsequent to our audit fieldwork. Section 18.1462 of the Michigan Compiled Laws and the State of Michigan Financial Management Guide (Part VII, Chapter 4, Section 100) require DOC to develop a formal response to our audit findings and recommendations within 60 days after release of the audit report. We released our performance audit of State Facilities' Food Service, Clothing, and Time Reporting Practices (47-700-97) in February 1999. Within the scope of this audit, we followed up 3 of the 6 prior audit recommendations as they related to DOC. DOC complied with 1 of the 3 prior audit recommendations. The other 2 prior audit recommendations were rewritten for inclusion in this report. * See glossary at end of report for definition. 10 471-0621-07L COMMENT, FINDINGS, RECOMMENDATIONS, AND AGENCY PRELIMINARY RESPONSES 11 471-0621-07L FOOD SERVICES COMMENT Audit Objective: To assess the effectiveness of the Department of Corrections' (DOC's) efforts to manage food services costs. Audit Conclusion: We concluded that DOC's efforts to manage food services costs were moderately effective. Our assessment disclosed two material conditions*. DOC needs to consider additional ways to reduce the costs of providing prisoner meals (Finding 1). Also, DOC did not effectively monitor food production (Finding 2). Our assessment also disclosed three reportable conditions* related to food commodity purchases, warehouse controls over food inventory, and prisoner food services wages (Findings 3 through 5). FINDING 1. Food Services Cost Savings Measures DOC needs to consider additional ways to reduce the costs of providing prisoner meals. DOC lacks assurance that its food service operations budget ($92.9 million for fiscal year 2006-07) is utilized efficiently. If DOC had a contracting arrangement similar to other state's contracting arrangements, we estimate that it could potentially realize significant annual savings in its food services program. Reducing costs would assist DOC in achieving its goal to provide the greatest amount of public protection while making the most efficient use of the State's resources. Our review disclosed: a. DOC should analyze the potential outcomes of hiring a private contractor to provide prisoner meals at its correctional facilities. Both the state of Florida and the state of Kansas utilize a private contractor for food service operations. Florida has utilized a contractor for 6 years, and Kansas has utilized a contractor for 10 years. We reviewed a copy of both * See glossary at end of report for definition. 12 471-0621-07L contracts and noted that the contractors are responsible for supervising the preparation of prisoner meals and the procurement of all food items, cleaning supplies, and paper products. Also, the contractors utilized prisoner workers to prepare meals using the states' own correctional facility kitchens and equipment. In addition, the contracts require that prisoner meals be prepared using products on the respective states' approved food list and that meals must follow the states' approved menu plans. Also, both contracts had provision for the states to assign a contract monitor and to assess financial penalties for contractor noncompliance (see Exhibit 3). As of August 2007, Florida paid the private contractor an average of $2.65 per prisoner per day for 86,000 prisoners and Kansas paid $4.14 per prisoner per day for 8,400 prisoners. During fiscal year 2006-07, it cost DOC $4.68 per prisoner per day to provide comparable services (total food services cost less certain fixed costs, such as prisoner pay, central office administration, equipment, and data processing charges) for 51,165 prisoners. Based on these costs per prisoner per day, we estimate that Michigan could save from $10.2 million to $38.0 million annually if it were able to negotiate the same contracted rates as Kansas or Florida, respectively. DOC informed us that there are many intangible and unknown issues that could impact the potential savings that Michigan may realize from contracting food services. Some of these intangible issues include the contracted rate that could be obtained in Michigan based on competitive wage rates and food prices for Michigan (e.g., Buy Michigan First), the potential need for additional custody assignments, the quality of food on the other states' approved food list, training costs and turnover rates associated with contracted employees, and the economic impact on the operations of DOC's Michigan State Industries. We recognize that there are unpredictable factors that may offset the potential savings; however, these factors are not likely to completely offset all of the potential savings. Therefore, we believe that further evaluation of contracting DOC's food services operations is warranted. b. DOC should continue to pursue the implementation of a computerized identification card system to help identify prisoners trying to obtain more than one meal at a time. We estimate that, with such a system, DOC could save approximately $295,000 annually Statewide by eliminating excess prisoner 13 471-0621-07L meals served. In addition, a computerized system could assist DOC in forecasting future meal needs. One three-facility complex had identified a computerized system that would cost approximately $16,000 for it to implement. This complex projected that it could save approximately $150,000 in food costs per year. However, DOC central office denied the complex's original purchase request pending a pilot project at another facility. During our visits, we noted that 12 of the 13 correctional facilities served 3,488 prisoner meals in excess of the total prisoner counts for those facilities during 14 days in fiscal year 2006-07. Based on an average number of 19.2 excess meals served per day per facility, with an average food cost per day of $2.48, we estimate that DOC could save approximately $295,000 Statewide in food costs if excess prisoner meals were eliminated. c. DOC had not analyzed whether it would be cost beneficial to use additional supplements or other fortified or enhanced food products in prisoner menus. As a result, DOC could not ensure that it had utilized resources efficiently. We determined that other state and county correctional facilities served vitamin-fortified drinks instead of milk and provided less fresh fruit and vegetable options while still meeting the basic dietary allowances required by American Correctional Association (ACA) standards. DOC stated that it offered fresh fruit and vegetables to meet nutritional values and required intakes, rather than using supplemented or fortified food products because it felt that the use of natural foods* helped reduce future health care costs. DOC also indicated that using the natural food options allows prisoners with specialized needs to eat from the Statewide menu, eliminating the need for special meal time accommodations. However, DOC had not completed an analysis to determine if the cost of using a natural foods approach was justified by health care savings and did not monitor to ensure that prisoners with special diets actually chose the healthier options. * See glossary at end of report for definition. 14 471-0621-07L d. DOC should evaluate if its current standard of 2,900 and 2,600 calories per day for male and female prisoners, respectively, is appropriate for the demographics of its current prison population. If DOC could reduce the number of calories per day for each prisoner, it could potentially see cost savings in food purchases. Adult Correctional Institutions, Fourth Edition, states that the dietary allowances for prisoners, as adjusted for age, sex, and activity level, should meet or exceed the recommended dietary allowances published by the National Academy of Sciences. DOC established its 2,900 and 2,600 calories per day menu standards using recommended dietary allowances in 1990. However, based on the 2002 Dietary Reference Intakes established by the Food and Nutrition Board of the National Academy of Sciences and DOC's population at the time of our audit, DOC may be able to reduce its calorie standard by up to 400 calories for male prisoners and by 400 to 600 calories for female prisoners. e. DOC should continue to evaluate more cost-effective methods of providing or the possibility of eliminating Kosher religious meals. If eliminated, we estimate that DOC could save approximately $272,000 annually in food costs. DOC operating procedure 05.03.150A allows prisoners to participate in a Kosher meal program when the prisoners' religious beliefs require a Kosher meal diet. However, to offer a Kosher menu, DOC's correctional facilities must purchase specific Kosher food and maintain separate work stations and kitchen utensil inventories that cannot be used to prepare non-Kosher meals. We reviewed DOC's analysis of Kosher meal menu costs for four correctional facilities during April 2007 and noted that the average food cost was $8.18 per day. This cost does not include any additional nonfood costs associated with preparing a Kosher meal menu. Based on DOC's analysis, we estimate that the total annual Kosher meal food expenditures were approximately $391,000 for 131 prisoners enrolled in the Kosher meal program. We further estimate that the total annual food expenditures for these same 131 prisoners to participate in the regular menu would have been $119,000. 15 471-0621-07L RECOMMENDATION We recommend that DOC consider additional ways to reduce the costs of providing prisoner meals. AGENCY PRELIMINARY RESPONSE DOC agrees with the recommendation and will comply. DOC informed us that, regarding part a. concerning hiring private contractors to provide prisoner meals at its correctional facilities, DOC is taking steps to conduct a request for information from private contractors. DOC indicated that, regarding part b. concerning a computerized identification card system, DOC is taking steps to pilot such a system. DOC also indicated that regarding part c. concerning the use of additional supplements and fortified or enhanced food products, DOC will continue to follow the Dietary Guidelines for Americans, 2005. In addition, DOC indicated that, regarding part d. concerning calorie standards, DOC will reduce the daily calorie standard to the recommendations contained in the Dietary Guidelines for Americans, 2005. Finally, DOC indicated that, regarding part e. concerning Kosher religious meals, DOC is continuing to evaluate the methods used to ensure compliance with the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 USC 2000CC. FINDING 2. Food Production DOC did not effectively monitor food production. As a result, DOC lacked the data necessary to properly forecast food production needs, prepared and served excess meals to prisoners and staff, and did not document the disposition of leftovers. In addition, failure to effectively monitor food production may impair DOC's ability to control food services costs. We estimate that the exceptions identified equated to $1.2 million. DOC policy directive 04.07.100 requires that each correctional facility document the number of meals served to prisoners and staff on form CAJ-138. DOC policy directive 04.07.102 requires the preparation of a food production work sheet for each meal. The food production work sheet should document the menu items prepared, the person responsible for preparation of each menu item, the expected number of meals to be prepared, the quantity prepared for each menu item, the appropriate serving size, the time and temperature of each menu item at the time 16 471-0621-07L cooking was complete and at the time the item was served, and the amount and disposition of leftovers. The policy states that facilities are to use this data to develop historical information about the number of prisoners and employees who have eaten a meal and then adjust it for the current prisoner population when planning future meals. In addition, DOC policy directive 02.04.105 requires that employees who eat a meal register in the dining hall. We visited 13 correctional facilities and reviewed food production documentation for 351 of the lunch and dinner meals for the periods January 14, 2007 through January 20, 2007 and July 22, 2007 through July 28, 2007. We also reviewed the number of meals served to prisoners and employees for the same periods. Our review disclosed: a. Twelve (92.3%) of the 13 correctional facilities prepared main entrée items (meat and vegetarian items) in excess of 110% of the facilities' institutional count plus the average number of documented employee meals. We noted that this occurred for 116 (33.0%) of the 351 meals reviewed. We estimate the value of these excess entrées prepared to be $126,000, or approximately $493,000 annually Statewide. DOC management informed us that periodic review of meal consumption for each menu item is necessary and, if properly done, will result in limiting excess meals to within 105% of prisoner and staff populations. Production excesses occurred because either DOC did not have historical data or its historical data was inaccurate. b. Twelve (92.3%) of the 13 correctional facilities reported a total of 107 instances in which more main meals were served to prisoners than the facilities' institutional count. These instances resulted in the reporting of 3,488 more prisoner meals served than the prisoner counts. Based on an average number of 19.2 excess meals served per day per facility, with an average food cost per day of $2.48, we estimate that the value of these meals was approximately $295,000 Statewide. This estimate includes approximately $47,000 related to the excess entrées identified in part a. of this finding. c. None of the 13 correctional facilities had documentation to support the reported total number of employee meals served. Of the 11,907 employee 17 471-0621-07L meals reported during the two-week period, the facilities provided support for only 6,101 (51.2%) employee meals. In addition, one facility consistently reported that 100% of its facility employees were served meals; however, during our visit at the facility, we observed numerous facility employees eating meals that were not prepared by the facility. d. The correctional facilities did not consistently complete the food production work sheets. As a result, the facilities could not document whether leftovers were properly handled and lacked information critical to forecasting the production of meals. Our review of the food production work sheets at the 13 correctional facilities disclosed: (1) Twelve (92.3%) of the 13 correctional facilities did not document on the food production work sheets the number of meals to prepare for in 156 (44.4%) of the 351 meals reviewed. (2) None of the 13 correctional facilities documented the disposition of leftovers for 181 (51.6%) of the 351 food production work sheets reviewed. The facilities were unable to explain if the leftovers were used for future meals or discarded. We estimate that the value associated with the unaccounted for leftovers is approximately $882,000 Statewide annually. This estimate includes approximately $386,000 related to the excess entrées identified in part a. of this finding. DOC conducts annual compliance reviews of the food services operations at each of the correctional facilities. DOC management informed us that these compliance reviews include a review of the food production work sheets and employee meal logs. However, for the 13 facilities that we visited, DOC noted no issues with the food production work sheets and employee meal logs during its compliance reviews. RECOMMENDATION We recommend that DOC effectively monitor food production. 18 471-0621-07L AGENCY PRELIMINARY RESPONSE DOC agrees with the recommendation and will comply. DOC informed us that it will comply by clarifying its Statewide operating procedure and by revising applicable forms. FINDING 3. Food Commodity Purchases DOC's correctional facilities did not consistently ensure that they obtained food commodities at the best price. As a result, facilities may have missed opportunities to realize cost savings related to food purchases. DOC expended a total of $46.2 million for food commodities in fiscal year 2006-07. DOC, in conjunction with the Department of Management and Budget (DMB), established Statewide food commodity contracts with vendors in an effort to provide the State with the best possible price. Statewide food commodity contracts include language that permits DOC's correctional facilities to exercise exceptional opportunity buys outside of the contract. Also, DMB Administrative Guide procedure 0510.01 allows departments to purchase up to $25,000 in goods not under a Statewide contract. We visited 13 correctional facilities and reviewed purchasing invoices paid during August 2006 and May 2007 for food commodities frequently used by the facilities. Our review of the invoices disclosed: a. DOC, in conjunction with DMB, did not ensure that food commodity contracts included clear and defined language related to opportunity buys. Our review disclosed that 10 (76.9%) of the 13 correctional facilities were uncertain as to when it was allowable to buy less expensive food commodities rather than order from the Statewide food commodity contracts. DMB Business Services Administration's Purchasing Operations informed us that opportunity buys must be for nonrecurring type purchases, must be for food commodities that were comparable in product quality to those commodities on the Statewide food commodity contract, and must generate cost savings. However, the contract language did not define these criteria for procuring opportunity buys. The contract language also did not define how often facilities could take 19 471-0621-07L advantage of exceptional opportunity buys and did not require the Statewide food commodity contractor to offer an option to honor lower competitor prices. In the absence of clear and defined contract language, the correctional facilities established their own criteria for pursuing opportunity buys. We noted that 2 facilities established a percentage of savings that must be realized before taking advantage of an opportunity buy, 4 facilities ordered from a competitive vendor any time a competitor offered food commodities at a price less than the Statewide food commodity contracts, and 4 facilities did not initiate opportunity buys unless they were certain the food commodity was a different food commodity than one covered by the Statewide food commodity contracts. Therefore, all facilities may not have taken advantage of opportunity buys that were cost beneficial to the State. b. Correctional facilities did not monitor cost savings realized from pursuing opportunity buys. As a result, DOC could not determine the best use of the opportunity buy option. This type of information could assist DOC in developing a clear and defined policy for the utilization of opportunity buys. Our review disclosed that 5 (38.5%) of the 13 facilities that we visited maintained documentation to track the total cost savings realized from taking advantage of opportunity buys. The following table shows the documented cost savings for fiscal year 2006-07 (as of the time of our visits in late August and early September 2007): Warehouse or Correctional Facility Jackson Regional Warehouse (includes 10 facilities) Kinross Regional Warehouse (includes Kinross and Hiawatha and 2 other facilities) Oaks Correctional Facility Pugsley Correctional Facility Bellamy Creek Correctional Facility Total $425,359 352,334 50,605 40,431 11,542 $880,271 20 471-0621-07L Documented Cost Savings c. DOC had not established a policy or a procedure related to produce purchases. DOC's correctional facilities used their delegated authority to purchase produce items. As a result, correctional facilities employed different processes to identify vendors for produce purchases and may not have obtained the lowest price for these purchases. In fiscal year 2006-07, DOC expenditures for produce were $4.5 million. During our visit to 2 facilities within close proximity, we noted that one facility purchased each produce item from the vendor with the lowest price for that individual item. The other facility purchased all produce items from the vendor that could provide the lowest total price for all produce items needed. The facility that ordered all produce from the same vendor paid as much as $3.25 more per case of produce than the facility that ordered the produce by the lowest price per produce item. RECOMMENDATION We recommend that DOC's correctional facilities consistently ensure that they obtain food commodities at the best price. AGENCY PRELIMINARY RESPONSE DOC agrees with the recommendation and will comply. DOC informed us that its Bureau of Fiscal Management will clarify opportunity buy parameters and provide instruction for purchasing all food commodities including produce. The Bureau of Fiscal Management will also take steps to adopt a Statewide opportunity buy tracking system. FINDING 4. Warehouse Controls Over Food Inventory DOC did not ensure that its correctional facilities had implemented sufficient controls to safeguard food inventory stored at the warehouses. As a result, the facilities could not provide assurance that errors, fraud, or theft related to food inventories would be detected in a timely manner. Part II, Chapter 12, Section 100 of the State of Michigan Financial Management Guide indicates that each agency is required to implement and maintain an inventory accounting system that provides adequate internal control over the 21 471-0621-07L inventory. Adequate internal control over the inventory includes the separation of duties between those responsible for maintaining the inventory, receipting the inventory, and accounting for the inventory. Adequate internal control also includes limiting access to inventory, requiring appropriate approvals for inventory adjustments, and performing periodic inventory counts. In addition, Section 100 requires annual physical inventories of periodic inventory systems to ensure their accuracy. Our review of 9 warehouse operations disclosed: a. Of the 9 warehouses, 1 (11.1%) did not conduct an annual physical inventory count during fiscal year 2006-07. As a result, the correctional facility had not verified the accuracy of the $250,000 in revolving inventory. b. Of the 9 warehouses, 2 (22.2%) did not ensure that proper separation of duties existed over the receipting of food commodities into the warehouse and the accounting for food inventory. As a result, the facilities could not ensure that physical inventory counts for $300,000 and $350,000 of revolving inventory were proper and that any adjustments to inventory were warranted. Both warehouses were responsible for verifying the receipt of food commodities delivered to the warehouse and for conducting periodic counts of the food inventory. Sound internal control practices require that a person independent of warehouse operations conduct the inventory counts to ensure that there is an appropriate verification of the inventory. c. For the 9 warehouses, 6 (66.7%) of the related business offices routinely adjusted inventory accounting records to agree with the physical count without independent verification of the adjustment. For example, one correctional facility's warehouse requested that the inventory of chicken legs and quarters be increased by 1,410 pounds based on a physical inventory count conducted in April 2007. The facility's business office processed this request without investigating how the understatement in the inventory accounting system had occurred. In August 2007, the warehouse conducted another physical count and noted that the inventory of chicken was short by 150 pounds. The warehouse again requested that the 22 471-0621-07L facility's business office adjust the inventory records to match the physical count. The facility's business office made the adjustment without investigating the reason for the shortage. d. Of the 9 warehouses, 1 (11.1%) did not ensure that all items entered into the inventory accounting system were entered correctly. For example, we noted two instances in which warehouse staff converted cases of meatballs to pounds using an incorrect weight per case. This resulted in the warehouse inventory being understated by 1,600 pounds of meatballs. e. Of the 9 correctional facilities, 1 (11.1%) did not sufficiently secure its warehouse. As a result, it could not properly monitor the activities of its warehouse inventory or ensure that food items were not improperly removed from the warehouse or its auxiliary freezer. We noted: (1) The warehouse is located where it is not visible to facility management and does not have any type of electronic monitoring system. (2) An auxiliary freezer is located in a maintenance building next to the employee parking lot. The freezer is not secure and does not have any type of electronic monitoring system. We observed that the building was unlocked and was not monitored by either facility management or warehouse staff during business hours. The location and setup of this warehouse may have contributed to warehouse inventory discrepancies noted in part c. of this finding. These circumstances are particularly important as the facility indicated that DOC plans to convert this warehouse into a regional warehouse that will be used to maintain a significantly larger amount of inventory. RECOMMENDATION We recommend that DOC ensure that its correctional facilities implement sufficient controls to safeguard food inventory stored at the warehouses. 23 471-0621-07L AGENCY PRELIMINARY RESPONSE DOC agrees with the recommendation and will comply. DOC informed us that its Bureau of Fiscal Management will take steps to establish a Statewide operating procedure to ensure that sufficient controls are established to safeguard food inventory stored at the warehouses. FINDING 5. Prisoner Food Services Wages DOC did not ensure that its correctional facilities correctly and consistently classified prisoner food services wages in the State's accounting records. As a result, DOC management could not identify the total cost of food services when reporting costs or attempting to analyze costs to manage the program. DOC paid prisoner wages of $4.0 million in both fiscal years 2005-06 and 2006-07 (see Exhibit 4). Our review of prisoner food services wages noted that 19 (38.8%) of the 49 facilities with prisoners working in food services recorded the total monthly prisoner wages as administrative costs rather than food services costs in the Michigan Administrative Information Network* (MAIN). As a result, DOC understated food services expenditures by $1,822,682 and $1,853,442 in fiscal years 2005-06 and 2006-07, respectively. RECOMMENDATION We recommend that DOC ensure that its correctional facilities correctly and consistently classify prisoner food services wages in the State's accounting records. AGENCY PRELIMINARY RESPONSE DOC agrees with the recommendation and will comply. DOC informed us that its Bureau of Fiscal Management will initiate internal control procedures to ensure that food service expenditures are recorded properly in the State's accounting records. * See glossary at end of report for definition. 24 471-0621-07L THIS PAGE INTENTIONALLY BLANK 25 471-0621-07L SUPPLEMENTAL INFORMATION 26 471-0621-07L UNAUDITED Exhibit 1 PRISONER FOOD SERVICES Department of Corrections Food Services Cost Per Prisoner Per Day For Fiscal Years 2004-05 through 2006-07 $4.98 $4.82 $4.81 $5.00 2004-05 2005-06 2006-07 $2.44 $2.39 $2.48 Direct food cost per prisoner per day Salary, wage, benefit, CSS&M, and miscellaneous cost per $4.50 prisoner per day Total food services cost per prisoner per day $2.36 $4.81 $2.43 $4.82 $2.50 $4.98 $4.00 Cost Per Prisoner Per Day $3.50 $3.00 $2.36 $2.43 $2.50 $2.44 $2.50 $2.39 $2.48 $2.00 $1.50 $1.00 $0.50 $0.00 2004-05 2005-06 2006-07 Fiscal Year Direct food cost per prisoner per day Salary, wage, benefit, CSS&M, and miscellaneous cost per prisoner per day Total food services cost per prisoner per day Source: Michigan Administrative Information Network (MAIN). 27 471-0621-07L PRISONER FOOD SERVICES Department of Corrections Food Services Costs by Facility and Central Function For Fiscal Years 2004-05 through 2006-07 Correctional Facility / Central Function Correctional Facilities: Cooper Street Correctional Facility Ojibway Correctional Facility / Camp Ottawa Parnall Correctional Facility Pine River Correctional Facility Pugsley Correctional Facility Special Alternative Incarceration Program (Cassidy Lake) Western Wayne Correctional Facility (1) Kinross Correctional Facility / Hiawatha Correctional Facility (2) Lakeland Correctional Facility / Florence Crane Correctional Facility / Camp Branch Newberry Correctional Facility / Camp Manistique Riverside Correctional Facility / Deerfield Correctional Facility Chippewa Correctional Facility / Straits Correctional Facility Bellamy Creek Correctional Facility Carson City Correctional Facility / Boyer Road Correctional Facility Earnest C. Brooks Correctional Facility / West Shoreline Correctional Facility G. Robert Cotton Correctional Facility Gus Harrison Correctional Facility / Parr Highway Correctional Facility Huron Valley Complex - Men / Huron Valley Complex - Women / Camp Valley (3) Macomb Correctional Facility Saginaw Correctional Facility Robert Scott Correctional Facility / Camp White Lake St. Louis Correctional Facility / Mid-Michigan Correctional Facility Alger Maximum Correctional Facility / Camp Cusino Baraga Maximum Correctional Facility / Camp Kitwen Charles Egeler Reception and Guidance Center Marquette Branch Prison Standish Maximum Correctional Facility / Camp Lehman Mound Correctional Facility Muskegon Correctional Facility Richard A. Handlon Correctional Facility Ryan Correctional Facility Thumb Correctional Facility (4) Southern Michigan Correctional Facility Ionia Maximum Correctional Facility Oaks Correctional Facility (5) At September 30, 2007 Security Facilty/Program Level Capacity 1826 1378 1633 1119 1158 360 I I I I I I I I, II 2899 I, II I, II I, II I, II, III, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV, V I, III, IV I, V I, V I, V I, V I, V II II II II II II, IV II, V IV 3434 1246 2265 2250 1873 2347 2355 1826 2252 1694 1234 1476 1040 2345 849 1171 1849 1202 1084 1049 1333 1290 1052 1205 732 679 931 $ $ Central Functions: Federal School Lunch Program Jackson Area Support Services Central office salaries and wages Reconciling Items (see Finding 5) Total fiscal year expenditures by cost category $ Each cost category's percent of total expenditures Fiscal Year 2004-05 Direct CSS&M and Food Costs Miscellaneous Salaries, Wages, and Benefits 679,970 810,949 865,706 656,156 657,904 351,701 154,998 1,576,358 $ 1,255,283 1,015,723 1,330,397 752,476 800,889 341,903 146,926 1,997,988 1,611,013 688,841 1,225,176 1,411,873 1,120,226 1,447,777 1,495,902 1,069,876 1,298,496 1,810,702 843,502 788,152 835,701 1,455,382 888,069 1,094,046 1,423,505 1,108,902 1,007,595 641,568 955,752 715,062 817,469 841,621 1,012,231 512,307 940,826 34,815,316 2,541,045 896,686 1,855,929 1,864,643 1,743,607 1,820,696 1,841,339 1,490,729 1,839,358 1,259,101 1,136,683 1,250,487 777,933 2,032,048 875,570 1,086,589 1,496,405 1,042,675 986,731 1,029,046 1,148,286 1,152,643 973,647 1,045,074 1,330,246 637,707 785,313 $ 43,581,801 210,268 112,475 161,357 177,797 35,299,416 $ 43,759,597 41% 51% $ $ $ 110,777 76,576 152,277 120,067 111,104 15,898 23,984 397,283 Total $ 291,062 148,277 278,284 376,901 377,267 144,161 212,665 132,917 158,592 446,674 235,051 230,281 195,998 297,754 203,055 234,010 237,372 212,734 170,014 167,983 280,739 177,265 220,872 93,801 153,427 153,484 101,455 6,940,059 4,443,120 1,733,803 3,359,389 3,653,416 3,241,100 3,412,634 3,549,906 2,693,523 3,296,446 3,516,477 2,215,235 2,268,920 1,809,632 3,785,184 1,966,694 2,414,645 3,157,282 2,364,311 2,164,341 1,838,596 2,384,777 2,044,970 2,011,988 1,980,497 2,495,904 1,303,498 1,827,594 $ 85,337,175 52,417 440,482 112,475 161,357 6,992,477 $ 86,051,490 8% Total average prisoner population for fiscal year 100% 49,046 (1) Western Wayne Correctional Facility was closed on December 20, 2004. (2) Camp Koehler was included in these figures for fiscal year 2004-05 only; it was closed on June 19, 2005. (3) These figures include Camp Valley from March 2007 through September 2007 and Camp Brighton from October 2004 through March 2007. Camp Brighton was closed and Camp Valley opended on March 25, 2007. (4) Camp Tuscola was included in these figures for fiscal year 2004-05 only; it was closed on June 2, 2005. (5) Camp Sauble was included in these figures for fiscal year 2004-05 only; it was closed on May 8, 2005. Source: Michigan Administrative Information Network (MAIN). 28 471-0621-07L 2,046,031 1,903,248 2,348,380 1,528,700 1,569,897 709,501 325,909 3,971,628 UNAUDITED Exhibit 2 Fiscal Year 2005-06 Direct CSS&M and Food Costs Miscellaneous Salaries, Wages, and Benefits $ $ 793,387 897,441 861,831 736,839 718,955 295,405 $ 1,199,718 1,149,562 1,341,036 964,115 886,641 489,102 $ 114,506 103,535 134,353 137,966 121,029 18,711 $ 2,107,611 2,150,538 2,337,220 1,838,921 1,726,624 803,218 $ 798,332 926,353 887,322 818,400 750,363 276,534 $ 1,162,791 1,219,831 1,288,428 948,257 836,435 455,784 $ 109,141 87,630 145,802 140,167 110,877 4,567 Total $ 2,070,264 2,233,815 2,321,553 1,906,824 1,697,675 736,885 1,633,055 2,228,939 394,650 4,256,643 1,670,789 2,440,390 423,328 4,534,507 1,786,018 783,776 1,369,771 1,445,400 1,171,206 1,547,362 1,569,866 1,179,988 1,340,949 2,085,644 862,137 885,731 801,711 1,600,853 928,754 1,161,898 1,147,607 1,207,217 1,092,663 704,122 1,017,520 761,495 808,236 829,325 1,084,884 560,221 1,009,315 36,680,583 2,757,812 929,422 1,935,837 1,871,374 1,713,552 1,953,169 1,826,398 1,517,479 1,931,987 1,213,900 1,034,962 1,323,052 748,641 2,136,833 886,850 1,173,259 1,604,286 1,050,433 1,028,915 1,034,897 1,241,682 1,198,851 1,012,641 1,058,039 1,349,722 655,806 849,662 $ 45,298,573 336,102 145,809 338,237 310,362 388,662 148,319 177,343 123,370 162,301 508,355 231,450 205,051 192,043 329,571 184,517 255,579 241,961 211,687 183,695 221,050 137,628 228,716 225,716 92,495 175,785 187,829 92,303 7,060,686 4,879,932 1,859,008 3,643,844 3,627,136 3,273,420 3,648,850 3,573,607 2,820,837 3,435,237 3,807,900 2,128,549 2,413,834 1,742,396 4,067,257 2,000,120 2,590,735 2,993,854 2,469,337 2,305,273 1,960,069 2,396,831 2,189,063 2,046,593 1,979,859 2,610,392 1,403,856 1,951,280 $ 89,039,842 1,654,663 809,631 1,534,350 1,410,626 1,196,532 1,536,382 1,590,190 1,158,478 1,385,282 1,884,171 911,244 850,023 993,913 1,614,398 943,864 1,137,376 1,177,577 1,219,194 953,088 726,501 1,106,096 772,112 827,519 796,970 1,079,743 566,514 1,017,301 36,981,826 2,774,794 980,928 2,079,387 1,994,781 1,716,632 2,092,550 1,889,676 1,481,030 1,838,521 1,804,248 1,079,436 1,337,233 839,670 2,107,788 914,412 1,235,697 1,461,718 1,076,128 1,031,174 992,024 1,140,649 1,265,946 1,029,596 967,903 1,097,339 719,056 845,265 $ 46,145,496 365,327 140,212 312,954 305,445 371,033 151,502 241,527 75,716 208,827 451,520 297,251 250,978 210,298 315,519 199,155 263,594 292,019 201,838 183,630 223,271 132,707 199,638 220,307 95,492 134,373 172,975 89,722 7,128,343 4,794,784 1,930,771 3,926,691 3,710,852 3,284,197 3,780,433 3,721,393 2,715,224 3,432,630 4,139,938 2,287,931 2,438,234 2,043,880 4,037,705 2,057,431 2,636,667 2,931,314 2,497,159 2,167,892 1,941,797 2,379,452 2,237,695 2,077,421 1,860,364 2,311,455 1,458,545 1,952,287 $ 90,255,666 46,576 136,555 216,909 12 55,855 81,363 485,191 622,409 1,822,682 400,040 12 199,458 1,822,682 1,853,442 187,273 1,853,442 9,100,289 $ 91,462,035 9,466,975 $ 92,918,789 $ 199,458 $ Total Fiscal Year 2006-07 Direct CSS&M and Food Costs Miscellaneous Salaries, Wages, and Benefits 36,926,618 40% $ 45,435,128 50% $ 10% 100% $ $ 187,273 $ 37,224,955 40% 51,980 $ 46,226,859 50% $ 10% 100% 51,165 29 471-0621-07L PRISONER FOOD SERVICES Department of Corrections (DOC) Comparison of Michigan's Prisoner Food Services to Selected Food Service Contracts (1) Number of locations serviced Number of prisoners (2) Cost per day per prisoner Responsibility for kitchen and equipment Michigan DOC - Prisoner Food Services Florida DOC - Contract 51 (including camps) 136 Kansas DOC - Contract 9 51,165 86,000 8,400 $4.68 (3) $2.65 $4.14 DOC maintains kitchens and equipment in its facilities. Florida DOC is responsible for providing kitchen space and equipment. Kansas DOC is responsible for providing kitchen space and equipment. Contract monitor Not applicable Contract monitor and invoice auditing Contract monitor Financial penalties for noncompliance Not applicable Various penalties ranging from $250 to $2,500 per instance of noncompliance through termination of contract $2,000 per day, if not corrected within 30 days Basis for menu DOC offers a limited choice menu based on dietary guidelines as noted under "Required standards." Contractor must serve Florida DOC's master menu (included in contract). Contractor must provide "limited choice" menu as outlined in proposal, in addition to meeting other nutritional requirements and number of servings. Required standards DOC complies with ACA standards, Dietary Reference Intakes, Dietary Guidelines for Americans , and Food Guide Pyramid. DOC also complies with the Michigan Food Code and the USDA HACCP Program. Contractor must comply with ACA standards and all federal and state laws, statutes, rules, and regulations Contractor required to keep documentation for ACA and NCCHC for accreditation audits and must meet all federal requirements. 2,900 for males and 2,600 for females Average calories per day were 3,100. Males ranged from 2,200 to 2,800 and females ranged from 1,800 to 2,200 (2,600 for pregnant females). 2,900 for males and 2,200 for females 30%, less than 10% saturated fat 30% Less than 38%, less than 10% saturated fat DOC correctional facilities are responsible for all maintenance, including cleaning, repairing, and replacing equipment as necessary. Florida DOC is responsible for maintenance of all equipment. However, contractor is responsible for cleaning and maintaining equipment in accordance with manufacturer's instruction. If contractor damages equipment, contractor must replace equipment. Contractor is required to clean and maintain equipment. Contractor must notify Kansas DOC if repair is needed. Kansas DOC is responsible for repair. DOC utilizes prisoner employees to prepare and serve meals and perform warehouse and sanitation functions. Contractor supervises inmates assigned to food service, including preparation and serving of meals, receipt of deliveries, and sanitation. Contractor must train and supervise prisoner workers (Kansas DOC will not provide additional security). Inventory and food storage DOC correctional facilities are responsible for inventory and food storage. Contractor is responsible for ordering and receiving all food necessary for the preparation of meals. Contractor owns inventory and must store food, with the expectation of a two-day supply, which is stored at the respective facility. Nonfood supplies (paper products, cleaning supplies, etc.) DOC correctional facilities are responsible for purchasing nonfood items. Contractor is responsible for purchasing most paper products, cleaning products, and some kitchen utensils. Contractor is responsible for paper and cleaning supplies. Kansas DOC is responsible for small wares and cooking equipment. DOC offers employee meals at no cost to custody staff and food services workers and to other employees at a cost of $1.35 per meal. Contractor provides meals to staff and guests at a cost not to exceed $1.00 per meal. Contractor is required to provide employee meals at a cost of $1.00 per meal. DOC uses a natural food approach to menu planning. DOC also utilizes government commodities and prisoner garden produce. DOC provides bagged meals for off-site prisoners and provides meals to four county jails. Contract includes formal performance measures, including expected outcomes. Also, contractor must purchase produce from inmate garden program. Contractor must utilize useable government commodities and departmental garden produce. Required number of calories per day Fat content in diet Maintenance requirements Utilization of prisoner workers Employee meals Special provisions (1) This comparison presents selected aspects of Michigan DOC's food services program and compares those aspects to similar aspects of selected food service contracts. This exhibit does not include all aspects of Michigan DOC's food services program or all aspects of the services provided by the selected food services contractors. (2) The number of prisoners is the average number of prisoners for Michigan, Florida, and Kansas during fiscal year 2006-07. The number of prisoners is the capacity for prisoners at Oakland County Jail and Grand Rapids Corrections Center. 30 471-0621-07L UNAUDITED Exhibit 3 Oakland County Jail (Michigan) - Contract Grand Rapids Corrections Center (Michigan DOC) - Contract 7 1 1,840 160 $2.64 $6.37 Oakland County is responsible for providing kitchen space and equipment. Contractor is responsible for preparing meals at its off-site kitchen and transporting meals to the corrections center. Audit clause in contract Performance review and audit language Standard indemnification clause Penalties for various violations included one-half of meal cost, $1.00 per meal, or 20% of meal charge. Contractor must meet ACA standards, Food and Nutrition Board of the National Academy of Sciences' nutritional requirements for inmates, and State standards. Sheriff approves menu prior to meal service. Contractor must meet Michigan Food Code, HHS, and FDA requirements. Contractor must also comply with DOC menu (sample included with contract). Contractor must comply with State and federal laws, ACA standards, and the Food and Nutrition Board of the National Academy of Sciences requirements. Contractor must meet all State and federal statutes, rules, and regulations. Average calories per day were 2,700. 2,900 for males and 2,600 for females Monthly average 37% (4) 30% County is responsible for building and equipment maintenance. Contractor responsible for preventative maintenance; if not maintained, contractor must pay to replace equipment. County provides inmates for food preparation and production, sanitation, and storeroom functions. Inmates utilized for meal service only. Preparation is completed off site. Contractor is responsible for all food purchases. Contractor is responsible for food storage. Contractor is responsible for all cleaning supplies. County is responsible for service ware trays and pots and pans. Contractor is responsible for the purchase of all nonfood products, including paper products, cleaning products, and flatware. Contractor provides employee meals at a cost of $.88 per meal. Contract does not address employee meals. No special provisions Contractor must prepare bagged lunches for off-site inmates and at least two hot meals per day. (3) This amount represents DOC's cost to provide services comparable to the contractors. Therefore, it excludes certain fixed costs, such as prisoner pay, central office administration, equipment, and data processing charges. (4) This fat content was calculated by DOC using Nutritionist Pro software to analyze one month of Oakland County's menu. Source: Review of contract information provided by Michigan DOC, Florida DOC, Kansas DOC, and Oakland County. 31 471-0621-07L PRISONER FOOD SERVICES Department of Corrections Payments to Prisoner Food Services Workers by Facility For Fiscal Years 2005-06 and 2006-07 At September 30, 2007 Correctional Facility Cooper Street Correctional Facility Ojibway Correctional Facility / Camp Ottawa Parnall Correctional Facility Pine River Correctional Facility Pugsley Correctional Facility Special Alternative Incarceration Program - Cassidy Lake Kinross Correctional Facility / Hiawatha Correctional Facility Lakeland Correctional Facility / Florence Crane Correctional Facility / Camp Branch Newberry Correctional Facility / Camp Manistique Riverside Correctional Facility / Deerfield Correctional Facility Chippewa Correctional Facility / Straits Correctional Facility Bellamy Creek Correctional Facility Carson City Correctional Facility / Boyer Road Correctional Facility Earnest C. Brooks Correctional Facility / West Shoreline Correctional Facility G. Robert Cotton Correctional Facility Gus Harrison Correctional Facility / Parr Highway Correctional Facility Huron Valley Complex - Men / Huron Valley Complex - Women / Camp Valley / Camp Brighton * Macomb Correctional Facility Saginaw Correctional Facility Robert Scott Correctional Facility / Camp White Lake St. Louis Correctional Facility / Mid-Michigan Correctional Facility Alger Maximum Correctional Facility / Camp Cusino Baraga Maximum Correctional Facility / Camp Kitwen Charles Egeler Reception and Guidance Center Marquette Branch Prison Standish Maximum Correctional Facility / Camp Lehman Mound Correctional Facility Muskegon Correctional Facility Richard A. Handlon Correctional Facility Ryan Correctional Facility Thumb Correctional Facility Southern Michigan Correctional Facility Ionia Maximum Correctional Facility Oaks Correctional Facility * Security Level Prisoner Worker Hours Prisoner Wages Total Prisoner Payments Prisoner Bonuses I I I I I I I, II 1826 1378 1633 1119 1158 360 2899 268,127 249,489 245,194 174,407 187,562 417,513 111,302 66,915 178,216 I, II I, II I, II I, II, III, IV I, II, IV I, II, IV I, II, IV I, II, IV I, II, IV 3434 1246 2265 2250 1873 2347 2355 1826 2252 1,046,335 209,222 357,000 390,467 483,220 409,902 430,691 638,473 379,349 213,184 52,902 89,755 101,207 130,470 108,688 119,099 83,818 106,730 112,808 26,333 50,930 48,303 37,637 65,651 69,742 49,660 61,966 325,992 79,235 140,685 149,509 168,106 174,339 188,840 133,478 168,696 I, II, IV I, II, IV I, II, IV I, II, IV, V I, III, IV I, V I, V I, V I, V I, V II II II II II II, IV II, V IV 1694 423,431 283,949 312,026 171,227 414,985 118,124 213,126 240,036 180,570 172,841 210,024 303,786 191,621 210,013 226,582 276,496 188,108 180,232 112,247 76,147 78,100 46,396 106,261 40,742 65,967 70,332 47,448 45,919 57,563 87,238 75,926 57,242 65,519 81,700 45,611 62,234 57,042 46,440 46,848 21,230 55,681 16,460 29,078 18,144 27,675 24,491 36,954 45,308 27,124 34,809 39,334 36,752 22,044 12,078 169,289 122,587 124,948 67,626 161,943 57,202 95,045 88,476 75,123 70,411 94,517 132,546 103,050 92,051 104,853 118,452 67,656 74,311 10,204,128 $ 2,643,148 $ 1,347,536 $ 3,990,683 Camp Brighton was closed and Camp Valley opened on March 25, 2007. Source: Bureau of Fiscal Management, Department of Corrections. 32 471-0621-07L Faciltiy Capacity Fiscal Year 2005-06 1234 1476 1040 2345 849 1171 1849 1202 1084 1049 1333 1290 1052 1205 732 679 931 $ 71,546 68,798 73,405 45,818 43,834 $ 30,330 39,193 38,828 27,715 24,034 $ 101,876 107,991 112,233 73,533 67,868 UNAUDITED Exhibit 4 Fiscal Year 2006-07 Prisoner Worker Hours 270,309 232,768 244,602 173,098 179,423 Prisoner Wages $ 69,676 64,757 72,391 45,245 42,344 Total Prisoner Payments Prisoner Bonuses $ 29,124 37,507 38,282 28,647 23,590 $ 98,800 102,264 110,673 73,892 65,935 416,292 110,397 64,445 174,842 1,106,697 195,852 370,557 395,698 510,302 430,063 422,311 653,698 398,414 216,719 49,478 96,290 102,794 137,782 113,146 117,702 84,594 111,115 119,478 24,458 50,154 48,900 32,225 69,245 67,997 49,104 62,154 336,197 73,936 146,443 151,694 170,007 182,391 185,699 133,698 173,269 364,682 281,188 316,083 185,482 425,324 119,188 214,895 248,316 182,173 192,584 195,648 309,061 236,017 192,025 228,772 286,059 202,779 183,734 105,732 75,710 77,841 51,672 107,646 41,902 67,219 63,096 47,005 51,558 55,423 85,863 94,293 54,457 63,316 78,914 48,568 65,169 54,615 45,670 44,633 24,175 55,764 17,738 32,242 13,716 28,987 29,089 36,214 50,229 33,532 29,434 37,992 39,790 22,891 9,410 160,348 121,380 122,474 75,847 163,410 59,641 99,461 76,812 75,991 80,648 91,637 136,092 127,824 83,890 101,308 118,704 71,458 74,579 10,364,092 $ 2,669,814 $ 1,351,429 $ 4,021,243 33 471-0621-07L GLOSSARY 34 471-0621-07L Glossary of Acronyms and Terms ACA American Correctional Association. CFA Correctional Facilities Administration. CSS&M contractual services, supplies, and materials. DMB Department of Management and Budget. DOC Department of Corrections. effectiveness Program success in achieving mission and goals. FDA Food and Drug Administration. goal The agency's intended outcome or impact for a program to accomplish its mission. HACCP Hazardous Analysis Critical Control Points. HHS U.S. Department of Health and Human Services. institutional count Number of prisoners housed at the facility at the given time that information is provided. material condition A reportable condition that could impair the ability of management to operate a program in an effective and efficient manner and/or could adversely affect the judgment of an interested person concerning the effectiveness and efficiency of the program. 35 471-0621-07L Michigan Administrative Information Network (MAIN) The State's fully integrated automated administrative management system that supports the accounting, payroll, purchasing, contracting, budgeting, personnel, and revenue management activities and requirements. MAIN consists of four major components: MAIN Enterprise Information System (EIS); MAIN Financial Administration and Control System (FACS); MAIN Human Resource System (HRS); and MAIN Management Information Database (MIDB). natural foods Non-imitation food that contains naturally occurring substances including vitamins, minerals, carotenoids, flavonoids, isoflavones, and protease inhibitors. NCCHC National Commission on Correctional Health Care. opportunity buys A purchase of a food commodity of similar quality at a reduced price. performance audit An economy and efficiency audit or a program audit that is designed to provide an independent assessment of the performance of a governmental entity, program, activity, or function to improve public accountability and to facilitate decision making by parties responsible for overseeing or initiating corrective action. reportable condition A matter that, in the auditor's judgment, represents either an opportunity for improvement or a significant deficiency in management's ability to operate a program in an effective and efficient manner. 471-0621-07L 36 oag This Page Left Intentionally Blank MICHIGAN OFFICE OF THE AUDITOR GENERAL AUDIT REPORT THOMAS H. MCTAVISH, C.P.A. AUDITOR GENERAL