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Audit criticizes prison contractor bid process


The state auditor has slammed the state Department of Public Safety for sidestepping the bidding process to give a contract to house thousands of prisoners out of state to a private contractor and presenting state legislators misleading data to secure more funding.

In response, newly appointed Public Safety Director Jodie Maesaka-Hirata defended parts of the department’s past practices.

Maesaka-Hirata, in a written statement, also said the department "will address the concerns raised in the report" and "review all administrative rules, practices, and existing policies as it relates to the Mainland and Federal Detention Center Branch."

The Management Audit of the Department of Public Safety’s Contracting for Prison Beds and Services, released Wednesday, delivered a harsh appraisal of department operations, mainly under the previous administration.

To send prisoners to Arizona facilities, the state got an intergovernmental agreement with the town of Eloy, Ariz., which means Eloy should be running the prisons, the report said.

But Eloy acted as a pass-through for the vendor Corrections Corp. of America, allowing the vendor to run the prisons.

The state’s agreement with Eloy allowed CCA, which was the employer of Eloy’s mayor, to win the contract without competing for the state’s business.

State Auditor Marion Higa said the state chief procurement officer agreed with her office that an intergovernmental agreement cannot be used in place of the bidding process.

"It’s not a level playing field at that point," Higa said.

The audit also criticized the department for designing cost figures from a calculation based on flawed methodology to help the department release numbers to legislative requests in the easiest way, rather than providing meaningful figures.

The audit said long-term solutions for prison overcrowding cannot be addressed as long as the true incarceration costs are unknown.

The audit also criticized the department for not taking advantage of Offendertrak, a software installed in 1999 to track inmates, improve overcrowding and help make management decisions.

Finally, the audit criticized the department’s monitoring of the prison contractor CCA.

Higa’s audit suggested that the department improve its compiling of cost data and establish policies and procedures for monitoring the contractor.

The report also suggested the state chief procurement officer suspend the department’s procurement authority for out-of-state prison contracts until new policies are in place and the staff has had more training.

The audit, conducted between May and October, came at the request of the Legislature. It was released a day ahead of the deadline.

Legislators requested the report in part because they were receiving unclear answers from the administration on prison costs, said state Sen. Will Espero, chairman of the Public Safety, Government Operations and Military Affairs Committee.

He said he felt the previous administration was happy with the status quo and was not trying to bring prisoners back to Hawaii.

Gov. Neil Abercrombie said he would like to bring the prisoners home.

According to the audit, the state started shipping prisoners out of state in the 1990s because of overcrowding — as a temporary solution that has turned into state policy. About 2,000 prisoners are being held in Eloy under a contract that ends in June.

The report said while doing fieldwork, auditors were met with evasiveness by department officials who "repeatedly attempted to deny us direct access to individuals and documents, define our audit scope, and stop us from conducting our audit at all."

Higa, in an interview, said that was a growing problem for her office with the previous administration.

In a 13-page response included in the 77-page audit report, Maesaka-Hirata said that she was perplexed by the lack of cooperation from the previous administration and was willing to use the audit to improve the department’s relationship with the office and community.

Maesaka-Hirata, who was the acting warden of Waiawa Correctional Facility, said the department gave a simple calculation for the cost of housing in-state prisoners to legislators and auditors because "it could not articulate the complexity of calculating a given day."

Maesaka-Hirata also defended the contract with CCA because the vendor is named in the contract as the "provider’s administrator." Despite that, she said the department would work on improving the contract agreement to resolve the auditor’s concerns.

Higa said that is a moot point, since rewriting the contract would not resolve the problem.

Maesaka-Hirata also defended the monitoring of the contractor and blamed some problems on understaffing.

She said the department is still inputting inmate, health care and other records manually because it has not fully implemented the Offendertrak software, despite $600,000 in recent software upgrades, because another $300,000 in hardware improvements is still needed.

Higa said she hopes the director will go back over the audit because she does not seem to understand the concerns the audit report raised.

"If you say it’s complicated and we can’t do it, then you shut your mind down to what it can do for you," she said of the software.

Espero said he was disturbed to learn that the law was violated to give the contract to CCA.

He said the audit helps legislators see where the department might have made missteps and moves the state closer toward bringing prisoners back home, which would improve the lives of prisoners and their families as well as the state’s economy by spending money here to house prisoners.


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