Millions wasted in private prison contract

Federal PrisonFrom Press Release


Senate Judiciary Committee Chairman Chuck Grassley is calling on the Bureau of Prisons to explain how approximately $2 million in questionable spending was allowed in one of its largest prison management contracts. A recent Justice Department Inspector General audit of a Bureau contract for management of the Reeves County Detention Center uncovered that the Bureau improperly paid $1.95 million in fringe benefits at the contractor’s request.

The inspector general was reviewing the Bureau’s contract with Reeves County, Texas, and its subcontractors for compliance with terms relating to billing and staffing requirements as well as oversight and monitoring.  Both the Bureau’s and the contractor’s failure to understand the applicable law led to the improper use of funds, according to the inspector general’s audit.  The audit further determined that the Bureau should reduce the monthly payout to the contractor by $41,088 to prevent additional waste of $945,024 throughout the remainder of the contract.

The improper spending was compounded by findings that the prison consistently failed to meet minimum contractual standards and received too many notices of concern.  Further, one of the subcontractors, the GEO Group, did not adequately respond to the inspector general’s inquiries. In a letter to the Bureau, Grassley is asking for a detailed explanation of its oversight practices as well as whether the Bureau has taken steps to remedy the concerns raised by the inspector general’s audit.

A signed copy of Grassley’s letter can be found here.