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PEER releases cost-per-inmate-day report

JACKSON — During its 1994 special session, the Legislature passed Senate Bill 2005 (now codified as MISS. CODE ANN. Section 47-5-1201 et seq. [1972]) to address short- and long-term bed capacity within the state’s correctional system. The bill created the State Prison Emergency Construction and Management Board to expedite the contracting and construction of proposed public and private prison facilities authorized by the bill.

MISS. CODE ANN. Section 47-5-1211 (3) (a) (1972) states: “No contract for private incarceration shall be entered into unless the cost of the private operation, including the state’s cost for monitoring the private operation, offers a cost savings of at least ten percent (10%) to the Department of Corrections for at least the same level and quality of service offered by the Department of Corrections.”

This section also requires PEER to contract annually with a certified public accounting firm to establish a state cost per inmate day for a comparable state facility. Originally, cost was to be established for medium security inmates only. In subsequent years, MDOC has planned the housing of different classifications of prisoners and PEER has provided cost estimates for those classifications as well.

The law further requires that the state cost per inmate day be certified annually by a certified public accountant and that the certified cost be used as the basis for verifying the ten percent savings required for private contractor costs.

Chapter 964, Laws of 1996 (Local and Private), established the East Mississippi Correctional Facility Authority. The bill authorized such authority to contract with MDOC for the private incarceration in a psychiatric facility of up to 1,000 prisoners in compliance with the provisions of MISS. CODE ANN. Sections 47-5-1211 through 47-5-1227 (1972). During the 2007 Regular Session, the Legislature passed House Bill 1764, which amended Chapter 964, Laws of 1996 (Local and Private), to allow the Mississippi Department of Corrections to contract with the East Mississippi Correctional Facility Authority for the private incarceration of not more than 1,500 in the psychiatric facility in Lauderdale County.

BKD, LLP, provided cost per inmate day determinations for all security levels of inmates combined (i.e., MDOC’s general cost per inmate day) and also on the basis of security classification (i. e., minimum, medium, or maximum) of inmates.

MDOC’s FY 2011 general cost per inmate day for a 1,000-bed facility totaled $49.68.

MDOC’s FY 2011 costs per inmate day for individual security classifications in a 1,000 bed facility were as follows: minimum security, $49.50; medium security, $43.72; and maximum security,1 $102.27. MDOC’s FY 2011 costs per inmate day for security classifications in a 1,500-bed psychiatric correctional facility were $57.00 for medium security and $101.36 for maximum security.

PEER believes MDOC should negotiate cost savings for private prison payments well below the ten percent mandated by state law.

PEER cautions that, as required by law, the cost figures presented in this report represent actual costs to MDOC. State law also requires that private prisons represent at least a 10% savings to MDOC’s costs for the same level and quality of services. It should be noted that cost savings offered by private prisons may exceed the ten percent threshold. Therefore, when negotiating private prison payments, items borne solely by the state should be eliminated and due consideration given to reducing other costs in which the state bears additional or different costs than the costs incurred by private prisons.

The Schedule of Average Daily Costs Per State Inmate by Security Classification reports that the cost for a medium security inmate is $43.72. However, MDOC should remove a total of $8.59 (debt service costs of $7.57; records, inmate classification, and offender services costs of $0.87; and Parole Board costs of $0.15) when negotiating private prison payments because these costs are borne solely by the state.

For medium security inmates, an additional $12.42 (medical expenses of $8.78; administrative services of $2.81; and education and training expenses of $.83) represents negotiable costs for which MDOC may be able to negotiate savings greater than the ten percent mandated by law. (See Exhibit below.)

Private prisons pay for the first seventy-two hours of medical care for inmates. After this period, the state bears the costs for ill inmates. Therefore, additional savings may be achieved by negotiating this time below the ten percent savings mandated by law.

The administrative responsibility of the state differs from that of the administrative function of private prisons. Therefore, administrative cost represents an area that may contribute savings beyond the ten percent mandated by law.

PEER believes that private prison contracts should yield savings significantly above the 10 percent required by law.


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