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Audit: State overpaid $13-million for prisons

By JONI JAMES
Published July 26, 2005

TALLAHASSEE - A harsh new state audit discloses that Florida overpaid nearly $13-million to two private prison vendors in the past eight years.

Among the findings were that the state paid for unfilled jobs and received money for facility maintenance that was never spent.

Nonetheless, the two companies that run the state's five private prisons remain on the job.

The disclosures come a year after state lawmakers disbanded a controversial citizen board that had overseen the state's private prisons.

The audit paints a mutually beneficial relationship between the defunct Correctional Privatization Commission and the two vendors that have run the private prisons for a decade: Corrections Corp. of American of Nashville and The GEO Group of Boca Raton.

"The CPC failed to adequately safeguard the state's interest...The CPC consistently made questionable contract concessions to vendors," according to the audit, released Tuesday by the inspector general of the Department of Management Services.

Among the audit's findings, based on records dating from 1997:

*The state paid vendors $4.5-million for jobs that were vacant, in part because it failed to require vendors to report the vacancies.

*The commission authorized $5-million in cost-of-living salary adjustments at GEO's South Bay Correctional facility. Auditors say the money wasn't fully passed on to employees as required.

*At Gadsden Correctional facility in Quincy, Corrections Corp. received $2.9-million more for facility maintenance than it spent.

*The commission, without clear legislative authority, staved off any impact from $263,489 in budget cuts in November 2001 by requiring vendors to return the same amount of money from a recent hike in their compensation.

DMS Secretary Tom Lewis said his general counsel is investigating whether the state can recoup any of the overpaid money.

"I was surprised we would have a commission that would be that lax in their oversight role," said Lewis. His predecessor, Bill Simon, ordered the audit last fall after assuming responsibility for the prison contracts. "To the Legislature's credit, they realized that and did away with them," Lewis said.

Attempts to reach former members of the commission, disbanded by the Legislature last year, were unsuccessful Tuesday.

Spokesmen for both companies declined to comment specifically on the audit, saying staff were still reviewing it.

See tomorrow's Times or sptimes.com for the full report.

[Last modified July 26, 2005, 19:39:15]