oversight

Federal Bureau of Prisons: Methods for Estimating Incarceration and Community Corrections Costs and Results of the Elderly Offender Pilot

Published by the Government Accountability Office on 2012-07-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States Government Accountability Office
Washington, DC 20548



           July 27, 2012

           The Honorable Patrick J. Leahy
           Chairman
           Committee on the Judiciary
           United States Senate

           The Honorable Robert C. Scott
           Ranking Member
           Subcommittee on Crime, Terrorism, and Homeland Security
           Committee on the Judiciary
           United States House of Representatives

           The Honorable Elijah E. Cummings
           Ranking Member
           Committee on Oversight and Government Reform
           United States House of Representatives

           Subject: Federal Bureau of Prisons: Methods for Estimating Incarceration and
           Community Corrections Costs and Results of the Elderly Offender Pilot

           This letter formally transmits the enclosed briefing in response to your request
           following the issuance of our February 2012 report, Bureau of Prisons: Eligibility and
           Capacity Impact Use of Flexibilities to Reduce Inmates' Time in Prison, that we
           provide additional information on the Bureau of Prisons’ (BOP) methods for
           estimating costs of housing inmates in BOP facilities, Residential Re-entry Centers
           (RRC), and home detention, as well as the evaluation of and results of the Elderly
           Offender Pilot Program (the Pilot) and any cost savings to the federal government. 1
           Our briefing addresses the following questions: (1) How does BOP estimate the daily
           cost of operating BOP facilities of different security levels and community
           corrections? (2) What are the final results of the Elderly Offender Pilot Program,
           including any cost savings identified by BOP, and to what extent can these results
           be used for policy decisions? To conduct this work, we analyzed relevant laws and
           BOP policies, obtained cost data for BOP facilities from fiscal years 2009 through
           2011; reviewed BOP’s December 2011 report to Congress summarizing the results
           of the Pilot, and interviewed BOP headquarters officials responsible for BOP’s
           budget and relevant programs. 2
           1
            GAO, Bureau of Prisons: Eligibility and Capacity Impact Use of Flexibilities to Reduce Inmates' Time in Prison,
           GAO-12-320 (Washington, D.C.: Feb. 7, 2012).
           2
            Federal Bureau of Prisons, Elderly and Family Reunification for Certain Nonviolent Offenders Pilot Program:
           Report to Congress (December 2011).


                                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
In summary, BOP uses different factors in estimating the daily costs of its facilities
and community corrections and incorporating certain additional factors would
increase the daily cost per inmate for its facilities. Specifically, BOP estimates daily
costs per inmate for its prison facilities using operational costs such as staff salaries
and training, inmate food, and medical supplies, among other things, but does not
include factors such as construction of new prisons, certain modernization and repair
(M&R) projects, or depreciation of its existing facilities. According to BOP, these
M&R projects and depreciation are incorporated into budget requests, financial
statements, and a user fee BOP computes to bill states for the full costs of housing
state prisoners. Adding these costs into BOP’s estimates would raise the costs from
between $4.39 and $4.82 per day per inmate for the last 3 fiscal years. For
community corrections, BOP estimates daily costs using the contract per diem rates
paid to the private companies that operate RRCs and monitor inmates on home
detention and the costs of management and oversight by BOP Community
Corrections officials and subtracts out subsistence fees paid by inmates in RRCs
and on home detention. As we reported in February 2012, contractors are not
required by law to report various components of their costs, a fact that, according to
BOP officials, makes it difficult to identify all the factors that may account for
variation between BOP’s costs of operating prison facilities and the costs of
operating community corrections. However, BOP officials anticipated that an
ongoing pilot to separate contract pricing for in-house beds and home detention
services would likely inform BOP about the prices of each of these major
components of community corrections.

Few inmates were eligible for the Elderly Offender Pilot and BOP estimated that the
Pilot achieved no costs savings. However, we identified limitations in BOP’s
evaluation of the Pilot and cost estimates that raise questions about the reliability of
the evaluation for estimating future costs and informing policy decisions. Specifically,
statutory requirements limited the number of offenders eligible to participate in the
Pilot. Seventy-one of the 855 inmates who applied for the pilot met the criteria and
were placed on home detention. According to BOP estimates, the Pilot achieved no
cost savings and actually cost the agency $540,631 above what would have been
spent had the inmates remained in BOP facilities. However, we identified limitations
in BOP’s cost estimates and evaluation, and thus the results may not be reliable for
informing future policy decisions. For example, while BOP knows what it paid RRCs
to monitor Pilot participants on home detention, we reported in February 2012 that it
does not know the exact cost of home detention, since those costs are not
separated from the overall cost of the RRC contract. BOP is revisiting pricing for
these services in responding to our recommendation, but it does not know what it
would pay for home detention services if Congress continued or expanded a
program of early release to home detention for elderly inmates. As a result, these
limitations raise questions about the reliability of BOP’s evaluation for estimating
future costs.

For additional information on a summary of the results of our work, see enclosure I,
slides 10 through 13. We are not making any recommendations for congressional
consideration or agency action.

Page 2                       GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
We provided a draft of this briefing to the Department of Justice and BOP for review
and comment. BOP did not provide written comments to include in this report, but
provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the Attorney General, selected congressional
committees, and other interested parties. This report will also be available at no
charge on our website at http://www.gao.gov. Should you or your staff have
questions concerning this report, please contact me at (202) 512-9627 or
maurerd@gao.gov. Contact points for our Offices of Congressional Relations and
Public Affairs may be found on the last page of this report. Key contributors to this
report were Chris Currie, Assistant Director; Tom Jessor; Michael Kniss; Billy
Commons, III; and Pedro Almoguera.




David C. Maurer
Director, Homeland Security and Justice Issues

Enclosure (1)




Page 3                      GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




    Enclosure I


                   Federal Bureau of Prisons:
      Methods for Estimating Incarceration and Community
    Corrections Costs and Results of the Elderly Offender Pilot




              Briefing for Congressional Requesters

                          July 23, 2012




                                                                                     Page 1




Page 4                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Briefing Overview

   • Introduction
   • Objectives, Scope, and Methodology
   • Results in Brief
   • Findings
       • Objective 1: Federal Bureau of Prisons (BOP) Estimates of
         Facility and Community Corrections Costs
       • Objective 2: Results of the Elderly Offender Pilot Program (the
         Pilot)
   • Agency Comments
   • GAO Contacts



                                                                                        Page 2




Page 5                       GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Introduction
   BOP Facilities and Community Corrections

   •     At the end of fiscal year 2011, about 94 percent of BOP’s inmate population of about
         217,800 was incarcerated in either federal institutions or privately managed prisons,
         operating at four different security level designations: minimum, low, medium, and high.1

   •     Security designations depend on the level of security and staff supervision the institution
         provides, such as the presence of security towers, perimeter barriers, the type of inmate
         housing, and staff-to-inmate ratio, among other things.

   •     To facilitate inmates’ reintegration into society, BOP may transfer its eligible inmates to
         community corrections locations for the final portion of their sentences. Inmates may
         spend up to 12 months in contract residential reentry centers (RRC)—also known as
         halfway houses. BOP, to the extent practicable, can also place inmates on home
         detention for the shorter of 10 percent of their term of imprisonment or 6 months.

   •     BOP inmates in RRCs or on home detention are held to strict schedules and are
         monitored by RRC staff or by U.S. Probation and Pretrial Services (USPPS) probation
         officers. At the end of fiscal year 2011, about 5 percent of BOP’s total inmate population
         was housed in RRCs or home detention.
    1BOP  also has agreements with state and local governments and contracts with privately operated facilities for the detention of federally adjudicated juveniles and for
    the secure detention of some short-term federal inmates. About 1 percent of the inmate population was incarcerated in such facilities at the end of fiscal year 2011.
                                                                                                                                                                               Page 3




Page 6                                                                      GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Introduction (cont.)
   Contractors Monitor Inmates in RRCs and on Home Detention

   •     Each RRC is operated by 1 of 105 contractors used by BOP. The contractors are paid a
         negotiated per diem rate for each inmate housed at the facility (per RRC bed) and are
         paid 50 percent of the negotiated per diem rate to monitor an inmate on home detention.
   •     We reported in February 2012 that2
           • RRC contractors are not required to disclose financial information to BOP, such as
              the actual costs of providing various services to inmates, and
           • BOP also does not require RRC contractors to separate the price of home
              detention services from the price of RRC beds and thus does not know the actual
              costs of home detention. In accordance with standard practices for program and
              project management, specific desired outcomes or results should be
              conceptualized and defined in the planning process as part of a road map, along
              with the appropriate projects needed to achieve those results, and milestones; thus
              we recommended that BOP establish a plan for requiring contractors to submit
              prices of RRC beds and home detention services.
           • BOP agreed with our recommendation and identified an RRC solicitation in two
              locations as a pilot for separating contract pricing for in-house beds and home
              detention services. BOP stated that if the results of the pilot were determined to be
              cost-effective and in the best interest of BOP, it anticipated separating the pricing
              for in-house RRC and home detention services in all future RRC solicitations.
       2GAO,   Bureau of Prisons: Eligibility and Capacity Impact Use of Flexibilities to Reduce Inmates’ Time in Prison, GAO-12-320 (Washington, D.C. Feb. 7, 2012).   Page 4




Page 7                                                                   GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Introduction (cont.)
   Elderly Offender Pilot Program

   •     The Second Chance Act of 2007 (Pub. L. No. 110-199) directed BOP to conduct the
         Elderly and Family Reunification for Certain Non-Violent Offenders Pilot Program (the
         Pilot) from fiscal years 2009 through 2010 to determine the effectiveness of placing
         eligible elderly offenders on home detention until the end of their prison terms.

   •     The statute required eligible inmates to be at least 65 years old and have served the
         greater of 10 years or 75 percent of the imposed sentence. Other statutorily set criteria
         for inclusion in the program were that applicants could not have a life sentence; a history
         of violence, espionage, sex offenses, or acts in connection with terrorism; or a history of
         escape or attempted escape. The statute also required that eligible offenders not be at
         substantial risk, as determined by BOP, of engaging in further criminal conduct or
         endangering the public and that placement on home detention would result in a
         substantial net reduction of costs to the federal government, as determined by BOP.

   •     The statute further required that (1) BOP monitor and evaluate each eligible elderly
         offender placed on home detention and (2) BOP report to Congress on the Pilot results,
         which it did in December 2011.


                                                                                                     Page 5




Page 8                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objectives, Scope, and Methodology

   •     In February 2012, we reported that BOP utilizes various statutory authorities to reduce
         the time inmates are incarcerated in prison.3 As part of our work, we provided
         information on BOP’s reported costs of housing inmates in prisons versus the costs of
         RRCs and home detention and preliminary results from BOP on the Elderly Offender
         Pilot Program, among other things.

   •     In response to this report, you asked us to provide additional information on BOP’s
         methods for estimating costs of housing inmates in BOP facilities, RRCs, and home
         detention, as well as the implementation and results of the Elderly Offender Pilot
         Program and any cost savings to the federal government. Specifically, our objectives
         were to determine

             •        how BOP estimates the daily cost of operating BOP facilities of different security
                      levels and community corrections and

             •        the final results of the Elderly Offender Pilot Program, including any cost savings
                      identified by BOP, and the extent to which these results can be used for future
                      policy decisions.
       3GAO-12-320.
                                                                                                           Page 6




Page 9                                          GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objectives, Scope, and Methodology (cont.)

   •   To determine the factors BOP included in its estimates of the daily cost of operating
       BOP facilities of different security levels and community corrections, we reviewed

          •   BOP cost data for facilities of various security levels and community corrections for
              fiscal years 2009, 2010, and 2011, and
          •   agency budget documents and BOP policy and program statements regarding the
              use of appropriation funds available for modernization and repairs.

   •   We also interviewed BOP officials regarding how costs of incarceration are estimated,
       including what specific factors are included in BOP’s estimates, such as certain
       maintenance and repairs, and those factors that are not included and why.




                                                                                                  Page 7




Page 10                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objectives, Scope, and Methodology (cont.)

   •   To determine the results of BOP’s Elderly Offender Pilot Program and how BOP
       identified any cost savings from the program, we reviewed

          •   BOP’s December 2011 report to Congress summarizing the results of the Pilot,
          •   statutory language outlining criteria for eligibility in the Pilot and BOP program
              guidance outlining procedures for screening Pilot applicants,
          •   documentation of eligibility decisions made by BOP headquarters officials on
              inmate applications for the Pilot, and
          •   BOP projections of the number of inmates potentially eligible if the statutory criteria
              (age of offender/length of sentence served) were to be adjusted by Congress.

   •   We interviewed BOP officials regarding implementation and results of the Pilot, including
       BOP’s methods for estimating any cost savings.




                                                                                                     Page 8




Page 11                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objectives, Scope, and Methodology (cont.)

   •   We obtained information from relevant BOP officials about steps taken to ensure the
       accuracy of data used in our prior work and February 2012 report as well as additional
       data used in this report, and found the data for objective 1 to be sufficiently reliable for
       the purposes of this report. After reviewing possible limitations in the data underlying
       BOP’s estimated costs of the Elderly Offender Pilot program, we determined that the
       estimates provided by BOP may not be reliable for drawing conclusions about the costs
       of the program and discuss the limitations we identified in this report, in the results
       section for objective 2.

   •   We conducted this performance audit from March through July 2012 in accordance with
       generally accepted government auditing standards. Those standards require that we
       plan and perform the audit to obtain sufficient, appropriate evidence to provide a
       reasonable basis for our findings and conclusions based on our objectives. We believe
       that the evidence obtained provides a reasonable basis for our findings and conclusions
       based on our objectives.




                                                                                                   Page 9




Page 12                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Results in Brief
   Objective 1

   •   BOP uses different factors in estimating the daily costs of its facilities and community
       corrections; incorporating additional factors would increase the daily cost per inmate for
       its facilities.

          •   To estimate daily costs per inmate for its prison facilities, BOP totals operational
              costs such as staff salaries and training; inmate food, medical expenses, clothing
              and laundry; utilities, supplies, equipment, security and routine maintenance; and
              expenses incurred by BOP facilities but paid centrally, such as workers’
              compensation, payroll expenses, and telephone charges.

          •   BOP does not include factors such as costs associated with construction of new
              prisons, modernization and repair (M&R) projects costing over $10,000, or
              depreciation of its existing facilities in its estimated daily costs. According to BOP,
              these costs are incorporated into budget requests and financial statements, and
              also into a user fee BOP computes to bill states for the full costs of housing state
              prisoners. The fee includes the costs of M&R projects and depreciation. Adding this
              fee would raise the daily cost of incarceration in BOP facilities by between $4.39
              and $4.82 per day per inmate, for the last 3 fiscal years.

                                                                                                    Page 10




Page 13                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Results in Brief
   Objective 1 (cont.)

           •    BOP estimates daily costs for community corrections using the contract per diem
                rates paid to the private companies that operate RRCs and monitor inmates on
                home detention, the costs of management and oversight by BOP Community
                Corrections officials, and subtracting out subsistence fees paid by inmates in RRCs
                and on home detention.

           •    As we reported in February 2012, contractors are not required by law to report
                various components of their costs, a fact that, according to BOP officials, makes it
                difficult to identify all the factors that may account for variation between BOP’s
                costs of operating prison facilities and the costs of operating community
                corrections.4

                • BOP officials anticipated that BOP’s ongoing pilot to separate contract pricing for
                  in-house beds and home detention services would likely inform BOP about the
                  prices of each of these major components of community corrections.




     4GAO-12-320.
                                                                                                      Page 11




Page 14                                      GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Results in Brief
   Objective 2

   •   Few inmates were eligible for the Elderly Offender Pilot, and BOP estimated that the
       Pilot achieved no cost savings to the federal government. However, we identified
       limitations in BOP’s evaluation of the Pilot and cost estimates that raise questions about
       the reliability of the evaluation for estimating future costs and informing policy decisions.

          •   According to BOP’s Pilot report, 71 of the 855 inmates who applied for the Pilot met
              the statutory criteria, were deemed eligible by BOP, and were placed on home
              detention.
          •   According to BOP estimates, the Pilot achieved no cost savings and cost the
              agency $540,631 above what would have been spent had the inmates remained in
              BOP facilities. As a result, BOP estimated it would have been cheaper if inmates
              had stayed in BOP facilities rather than on home detention.
          •   BOP estimated it cost about $35 to $48 a day for each Pilot participant on home
              detention and compared this with the marginal cost for housing inmates in
              minimum- or low-security BOP facilities, which includes the various daily costs of
              operating the facilities, other than most staffing costs.



                                                                                                  Page 12




Page 15                                   GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Results in Brief
   Objective 2 (cont.)

   •   We identified limitations in BOP’s cost estimates and evaluation, and thus the results
       may not be reliable for informing future policy decisions. For example
        • BOP knows what it paid RRCs to monitor Pilot participants on home detention.
           However, as we reported in February 2012, BOP does not know the exact cost of
           home detention since those costs are not separated from the overall negotiated
           cost of the RRC contract. Since BOP is revisiting pricing for these services in
           responding to our recommendation, it is not yet positioned to know what it would
           pay for home detention services if Congress continued or expanded a program of
           early release to home detention for elderly inmates.
        • Some of the amounts paid by BOP for home detention of Pilot participants would
           have been incurred without the Pilot. Current law allows BOP to place inmates, to
           the extent practicable, on home detention for the shorter of 10 percent of the term
           of imprisonment or 6 months. All inmates eligible for the Pilot could have been
           placed on home detention by BOP for up to 6 months even if the Pilot had not been
           conducted. This could have affected BOP’s conclusions about the additional costs
           of the Pilot.

   •   These limitations raise questions about the reliability of BOP’s Elderly Pilot evaluation
       for estimating future costs and informing policy decisions.
                                                                                                 Page 13




Page 16                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 1: Facility and RRC Costs
   Operating Costs Include Day-to-Day Operations and Support

   •    We reported in February 2012 that BOP reports total daily operating costs for various
        categories of facilities and for community corrections by fiscal year.5

   •    BOP estimates of the total daily operating costs for its prison facilities include expenses
        associated with day-to-day operations such as staff salaries and training; inmate
        medical expenses, food, clothing, and laundry; and utilities, equipment, security, and
        maintenance of grounds. Total costs also include related support costs, which are
        primarily comprised of institution-related expenses incurred by BOP institutions but paid
        by headquarters because of centralized billing procedures, including workers’
        compensation and payroll processing for institution staff, telephone, and other charges;
        and salaries for headquarters, regional, and Training Center staff. Support costs
        averaged around 11 percent of total costs during fiscal years 2009, 2010 and 2011.

   •    Total daily operating costs for community corrections include amounts paid to private
        contractors (at per diem rates negotiated with the contractors) net of subsistence fees
        paid by inmates in RRCs or on home detention, as well as the costs of management and
        oversight by BOP Community Corrections officials, which averaged between 7 and 8
        percent of total costs during fiscal years 2009, 2010, and 2011.
    5GAO-12-320, 18.
                                                                                                   Page 14




Page 17                                   GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 1: Facility and RRC Costs
   Community Corrections More Costly than Minimum-Security
   Facilities
   •   In fiscal years 2009 and 2010, BOP reported that housing inmates in community
       corrections was more costly, on a per diem basis, than housing inmates in minimum-
       and low-security facilities, and in fiscal year 2011, more costly than housing inmates in
       minimum-security facilities, as shown in table 1 on the next slide.




                                                                                                  Page 15




Page 18                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 1: Facility and RRC Costs
   Table 1: BOP Per Capita Total Daily Operating Costs, Fiscal Years
   2009 through 2011
      Classification type                        Total daily cost, 2009                    Total daily cost, 2010                     Total daily cost, 2011


      Minimum-security                           $56.91                                    $57.55                                     $58.32
      facilities

      Low-security facilities                    65.81                                     69.53                                      73.57


      Medium-security                            69.51                                     71.91                                      73.57
      facilities

      High-security facilities                   87.75                                     92.76                                      94.87


      Contract RRCsa                             $67.83                                    $70.79                                     $71.68

       Source: BOP per capita cost data, http://www.bop.gov/foia/reading.jsp.
       aIncludes amounts paid to private contractors to operate RRCs and to oversee inmates on home detention, as well as the costs of management and oversight by
       BOP Community Corrections officials, subtracting out subsistence fees paid by inmates in RRCs and on home detention.

                                                                                                                                                                     Page 16




Page 19                                                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 1: Facility and RRC Costs
   Some Costs Not Included in Operating Costs for BOP Facilities

   •   According to BOP officials, operating costs are designed to capture the day-to-day
       routine costs of taking care of BOP inmates, and are tracked for budgetary purposes to
       support BOP’s Salaries and Expenses (S&E) appropriation. Other BOP expenses, such
       as for construction, M&R costs over $10,000, or depreciation of assets, are not included
       in BOP’s estimates of daily per inmate operating costs and are reported elsewhere for
       budgetary purposes. BOP officials stated that these costs are not included in total daily
       operating costs because

        •     new construction costs vary significantly by year, and it would be misleading to
              include these costs in estimates of day-to-day operations. These costs are included
              separately in BOP’s Building and Facilities (B&F) appropriation;
        •     M&R projects typically cover one-time major repairs, such as replacing roofs,
              upgrading electrical plants, or repaving or resurfacing roads, and are tracked for
              budgetary purposes to support BOP’s B&F appropriation; and
        •     in accordance with BOP Program Statements and Statement of Federal Accounting
              Standard 6 (Accounting for Property, Plant and Equipment), BOP reports
              depreciation costs in its annual financial statement.


                                                                                                    Page 17




Page 20                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 1: Facility and RRC Costs
   Additional Factors Could Raise Estimated Costs of Operating BOP
   Facilities
   •   According to BOP officials, reported total daily costs do not represent the full cost of
       operating BOP facilities. Although reported total daily costs do not include construction,
       M&R, or depreciation, BOP includes these costs when computing a user fee each year
       to cover the full incarceration costs borne by BOP for housing state prisoners. The user
       fee is added to the total daily costs for each security level and includes

          •   the cost of M&R and construction projects between $10,000 and $100,000 when
              these projects are put into use (maintenance and repair projects costing up to
              $10,000 are already included in daily operating expenses);
          •   depreciation of BOP real property, which also includes M&R and construction
              projects that are capitalized when put into use (the criteria for capitalization of real
              property include that the total project cost be $100,000 or more, among other
              things); and
          •   interest payments on a 25-year capital lease for a Federal Transfer Center in
              Oklahoma City.

   •   Adding the user fee would increase the cost of incarceration in BOP facilities at each
       security level about $4.39 in fiscal years 2010 and 2011, and $4.82 in fiscal year 2009.
                                                                                                     Page 18




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Enclosure I




   Objective 1: Facility and RRC Costs
   Exact Costs of Community Corrections Activities Are Unknown

   •   It is not known what specific costs are included in the community corrections costs
       reported by BOP, as RRC contractors are not required by Federal Acquisition
       Regulations to report what they spend their money on to BOP.
   •   According to BOP officials, the costs of operating BOP facilities may not be comparable
       with the costs to RRC contractors of operating community corrections for the following
       reasons:
          • BOP facilities and RRCs serve different purposes. The purpose of placing an
              inmate in community corrections, according to BOP, is to help prepare the inmate
              for transition to the community.
          • It is not clear whether the RRC costs include the same factors included in BOP
              facility costs. BOP officials stated that they expected that the RRC contractors
              would include all costs to operate facilities in the rate contractors negotiate with
              BOP, including factors that BOP includes in estimates of operating its prison
              facilities, such as utilities, repair and maintenance, but also including factors that
              BOP does not include, such as property tax and a profit margin.
   •   BOP officials stated that they anticipated that results from the pilot BOP is conducting to
       separate contract pricing for in-house beds and home detention services as a result of
       our prior recommendation would likely inform BOP about the price of each of these two
       components of community corrections.
                                                                                                   Page 19




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Enclosure I




   Objective 2: Elderly Offender Pilot
   BOP Screened Inmate Applicants in Two Stages

     •According to BOP officials, Pilot applicants denied at BOP institutions did not meet basic statutory
     eligibility criteria. Applicants denied at BOP headquarters were mostly excluded due to officials’
     assessments that the inmate was at risk of criminal conduct or endangering the public.




     Source: GAO analysis of BOP data.

                                                                                                      Page 20




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Enclosure I




   Objective 2: Elderly Offender Pilot
   Eligible Inmates Limited by the Statutory Criteria

   •   According to BOP officials, statutory requirements were the primary factor limiting the
       number of inmates eligible for the Pilot. BOP did not centrally track the specific reasons
       applicants were determined to be ineligible at the institution level, and stated that
       obtaining this evidence after the conclusion of the Pilot would be prohibitively labor-
       intensive. However, BOP estimates based on BOP’s fiscal year 2012 inmate population
       data show that the population potentially eligible if statutory requirements for program
       eligibility remained the same would be limited:

          •   BOP estimated that its fiscal year 2012 population of offenders 65 years of age and
              older who have served the greater of 10 years or 75 percent of their sentences is
              about 231 offenders.

          •   Of the estimated 231 offenders 65 years of age and older who have served the
              greater of 10 years or 75 percent of their sentences in fiscal year 2012, BOP
              estimated that about 131 of these offenders would be excluded because of
              statutory prohibitions on participation of inmates who have been sentenced for a
              violent offense or sex offense or have a criminal history involving violent or sex
              offenses.

                                                                                                   Page 21




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Enclosure I




   Objective 2: Elderly Offender Pilot
   Number Eligible under Revised Criteria

   Table 2: BOP Estimate of the Number of Elderly Offenders Who Would Be Eligible for and Receive
      Home Detention from Fiscal Years 2012 through 2014 if Congress Revised the Pilot Statutory
      Criteria for Age and Sentence Length.
       Age                                                                 Amount of sentence served                              Projected number of Inmates
                                                                                                                                  receiving home detentiona
       Adjust age requirement, keep requirements for amount and percentage of sentence served

       60                                                                  Greater of 75% or 10 years                             322

       55                                                                  Greater of 75% or 10 years                             452

       Keep age requirement; adjust requirement for percentage of sentence served, and drop requirement to serve 10
       years

       65                                                                  75%                                                    477

       65                                                                  70%                                                    617

       65                                                                  67%                                                    673
       65                                                                  50%                                                    1,095

       Source: GAO analysis of BOP inmate data and population projections.
       aBOP estimates assume program reauthorized in fiscal year 2012 and the same percentage of new applicants pass BOP’s screening as did in fiscal year 2010 (74 percent).




                                                                                                                                                                      Page 22




Page 25                                                                GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 2: Elderly Offender Pilot
   BOP Reports Positive Outcomes from the Pilot

   •    According to BOP, the Pilot achieved several positive outcomes:

               •    As of June 2012, none of the 71 inmates placed on home detention as the result of
                    the Pilot had re-offended or violated the terms of release to home detention.

               •    According to BOP, BOP’s costs for Pilot participants’ medical care were minimal
                    ($2,270 total, as of the December 2011 report; BOP further reported that there
                    have been no substantial additional reported medical costs as of June 2012).6 In its
                    review of inmate applications, BOP assessed each inmate’s health and officials
                    stated that Pilot applicants and participants were generally deemed to be in good
                    health.
                     • According to BOP, inmates on home detention are responsible for the costs of
                        their health care, but if inmates cannot pay their health care costs, BOP will
                        assume the burden of these costs.
                     • Elderly inmates can also be eligible for Medicare, and may qualify for Medicaid
                        or health services from the U.S. Department of Veterans Affairs to cover
                        medical costs. BOP did not track or ask inmates if they used such services to
                        cover or supplement their health care costs during the Pilot.

    6Federal   Bureau of Prisons, Elderly and Family Reunification for Certain Nonviolent Offenders Pilot Program: Report to Congress (December 2011), 4.   Page 23




Page 26                                                                     GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 2: Elderly Offender Pilot
   BOP’s Estimates Identified No Cost Savings

   •   According to BOP, the Pilot cost $540,631 more than what would have been spent had
       the inmates remained in BOP facilities.
         • According to BOP, transferring only one or two inmates out of a facility does not
             reduce necessary staffing levels and other costs associated with inmate care and
             prison operations. Therefore, BOP used marginal costs instead of total daily costs
             to calculate actual program costs. Marginal costs are estimates of what is actually
             spent to provide security, food, medical care, clothing, unit management,
             education, records, and maintenance when additional inmates are added to
             existing BOP facilities, and differs from per capita costs in that it includes almost no
             staffing costs. Home detention costs were calculated on a per capita basis,
             because if an inmate is on home detention, money is allocated to pay for the
             contractual services that would include monitoring equipment, drug testing, and
             home visits if required.
         • BOP compared the daily marginal cost to house an inmate in a minimum- or low-
             security facility (estimated at $20.08 and $24.32, respectively) with the regional
             average per diem paid to RRCs to supervise inmates on home detention (ranging
             from $34.86 in BOP’s Southeast Region to $47.76 in BOP’s North Central Region)
             for each day an inmate was on home detention. According to its estimates, BOP
             determined that it was more costly to place an inmate on home detention than
             house the inmate in a BOP facility.
                                                                                                   Page 24




Page 27                                   GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 2: Elderly Offender Pilot
       BOP’s Estimates Identified No Cost Savings (cont.)

   •    BOP officials stated that even if the Pilot eligibility requirements were to be changed,
        there would not be enough potentially eligible participants to reduce necessary staffing
        levels, utilities, maintenance, and other costs associated with inmate care and prison
        operations, unless the requirements for age or percentage of sentence served were
        substantially lowered. Therefore, BOP would continue to calculate costs of the program
        using marginal rather than total daily costs, resulting in net costs to BOP to operate the
        program.




                                                                                                   Page 25




Page 28                                   GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 2: Elderly Offender Pilot
   BOP’s Evaluation and Cost Estimates Had Limitations

   •    We identified limitations in BOP’s evaluation of the Pilot and cost estimates, and thus
        the results may not be reliable for informing future policy decisions.
          • We reported in February 2012 that BOP does not require RRC contractors to
             separate the price of home detention services from the price of RRC beds and
             thus does not know the actual costs of home detention. We recommended that
             BOP establish a plan for requiring contractors to submit separate prices of RRC
             beds and home detention services.7
          • In responding to this recommendation, BOP identified an RRC solicitation in two
             locations as a pilot for separating contract pricing for in-house beds and home
             detention services. BOP stated that if the results of the pilot were determined to be
             cost-effective and in the best interest of BOP, it anticipated separating the pricing
             for in-house RRC and home detention services in all future RRC solicitations.
          • Most of the costs associated with the Pilot were for RRC monitoring of inmates on
             home detention. Since BOP is revisiting pricing for these services in responding to
             our recommendation, BOP is not yet in a position to know whether what it paid for
             home detention services for Pilot participants is a reliable indicator of what it would
             pay for home detention services if Congress considered continuing or expanding
             early release to home detention for elderly inmates.


    7GAO-12-320,   20.                                                                             Page 26




Page 29                                    GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Objective 2: Elderly Offender Pilot
    BOP’s Evaluation and Cost Estimates Had Limitations (cont.)

   •   BOP’s evaluation and cost estimate were also limited because they assumed BOP
       incurred additional costs for each day Pilot participants were on home detention. BOP
       assumed this because BOP’s daily rate paid to the RRC for monitoring always exceeded
       the marginal cost of incarceration in a BOP facility.

   •   However, BOP would have been paying some of these costs anyway. Current law
       allows BOP to place inmates, to the extent practicable, on home detention for the
       shorter of 10 percent of the term of imprisonment or 6 months. All inmates eligible for
       the Pilot were required to have served 10 or more years of their sentences and as a
       result, could have been placed on home detention by BOP for up to 6 months (6 months
       is less than 10 percent of 10 years) even if the Pilot had not been conducted. Thus,
       some of these costs would have been incurred anyway, and this limitation could have
       affected BOP’s conclusions about the additional costs of the Pilot.

   •   While the Pilot and the report on its results have now been completed, the limitations
       that we have identified raise questions about how reliable BOP’s cost estimate and
       assessment of the Pilot are for making policy decisions about any similar pilots or other
       programs related to elderly offenders or home detention in the future.

                                                                                                 Page 27




Page 30                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   Agency Comments

   •   We provided a draft of this briefing to the Department of Justice (DOJ) and BOP for
       review and comment. BOP did not provide written comments to include in this report, but
       provided technical comments, which we incorporated as appropriate.

   •   BOP disagreed with our statement that BOP does not know the exact cost of home
       detention. BOP stated that it knows the costs of home detention because it pays
       contractors a set rate of 50 percent of the cost for RRC beds. BOP also reiterated that
       RRC contractors are not required to provide BOP the costs they actually incur for home
       detention services. BOP noted that during the pilot they are conducting to separate the
       price of home detention from the RRCs, BOP will continue to know how much it pays
       contractors for home detention, but contractors will still not provide their actual costs.
       We agree that BOP knows what it pays for home detention and that the pilot will not
       provide BOP the contractors’ exact costs for home detention. BOP will not know the
       exact cost of home detention and, as a result, we continue to believe our statement is
       accurate. Separating the price of home detention from the price of RRCs during the
       pilot, rather than assuming this price will be 50 percent of the RRC price, will provide
       BOP with better information on the costs of home detention and help BOP determine the
       most cost effective options for monitoring inmates on home detention.

                                                                                                 Page 28




Page 31                                  GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




   GAO Contacts

   •   Should you or your staff have any questions on the matters discussed in this briefing,
       please contact David C. Maurer at (202) 512-9627 or maurerd@gao.gov or Chris Currie
       at (404) 679-1875 or curriec@gao.gov.




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                                                                                                Page 29




Page 32                                GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
Enclosure I




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(441057)



Page 33                               GAO-12-807R Incarceration Costs and Elderly Offender Pilot Results
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