The state’s auditor on Wednesday blasted the Hawaii Department of Public Safety’s management of a contract to house prisoners in privately owned Arizona prisons.

In a 77-page report, Marion Higa also criticized the financial data about the arrangement the department has provided legislators and the public for using a flawed methodology and containing inaccurate or insufficient figures.

"Without clarified guidance by policymakers, the department has no incentive to perform better and will continue to evade accountability by providing unreliable and inaccurate reporting of incarceration costs," Higa wrote in the audit’s conclusion.

"In addition, the department has misused its procurement authority to circumvent the process designed with safeguards to protect the state’s interests," she added.

Interim Public Safety Director Jodie Maesaka-Hirata said her agency acknowledges the auditor’s recommendations "and will address the concerns raised in the report. In addition, we will review all administrative rules, practices, and existing policies as it relates to the mainland and federal detention center branch."

Much of the audit’s findings were critical of actions taken before current Gov. Neil Abercrombie took office earlier this month, succeeding Gov. Linda Lingle. Abercrombie has said he wants to stop exporting inmates to other states but hasn’t specified how that would be accomplished.

Spokeswoman Donalyn Dela Cruz said possible solutions include "revisiting ideas of increasing prison capacity in Hawaii and ensuring successful transitions into the community."

About 2,000 male Hawaii prisoners are housed in the Florence, Red Rock and Saguaro correctional centers owned by the Corrections Corporation of America, according to the audit.

The state in 2006 signed an "intergovernmental agreement" with Eloy, Ariz., where the facilities are located, but deals almost exclusively with CCA, the report contended.

The arrangement allowed agency officials to circumvent and manipulate the state’s competitive procurement process to steer business to CCA, the audit found. The department also treated CCA as a government agent instead of a private vendor operating for a profit, it contended.

The CCA contract is set to expire on June 30. But the report concluded the state as of early October had no plan to address that looming deadline.

Without such a plan, "the department is shirking its responsibility to provide for the safety of the public through correctional management, and leaves the operational staff ill-prepared to contract for private prison beds and services," the audit stated.

The report also aimed at the department’s reporting to the Legislature. It asserted that agency officials reported "artificial cost figures" that were derived from a calculation that itself was "based on a flawed methodology."

"Because funding is virtually guaranteed, management is indifferent to the needs of policymakers and the public for accurate and reliable cost information," the audit said. "As a result, true costs are unknown."

In addition to improving its financial and program data, and its monitoring of operations at the CCA prisons, the auditor called on the state’s chief procurement officer to suspend the public safety department’s contracting authority for private prisons until its practices and policies are changed and staff have been better trained.

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Online:

http://hawaii.gov/auditor/Reports/2010/10-10.pdf