Jail communication contracts pose challenges for auditors

FRANKFORT, Ky. (WTVQ/Press Release)A new state data bulletin  provides information to taxpayers on communication services provided by Kentucky’s county jails to their inmates and the revenue generated for the jails.

The data bulletin examines each county jail’s communication services and equipment contracts active from July 1, 2019 and November 15, 2020.

“These contracts have become a newly developed source of revenue for our county jails, and are raising a variety of issues for jailers, county governments, and our auditors,” said state Auditor Mike Harmon, whose office compiled the report. “Our data bulletin, which is not an audit, provides information about the types of communication service contracts at county jails, how they were procured, and the financial benefits jails are receiving from communication services vendors.”

Harmon made the decision to assemble a data bulletin to provide a consolidated statewide overview of these contracts, so it can be used as a resource for county governments, jailers, and legislators.

In addition to reviewing contracts and procurement criteria, auditors surveyed county-operated jails across the Commonwealth to gather additional information about current practices and procedures related to their communication services and equipment contracts.

Based on survey responses, only 32 contracts were awarded by competitive bidding, while 81 contracts were either not bid or the survey respondents did not know whether the contract had been bid.

“Jailers would benefit from more guidance as to how these contracts should be procured,” Auditor Harmon said.  “We want to highlight areas where laws could be clearer relating to procurement and the proper handling of public funds, because it makes things better for local officials who want to do things the right way, and most importantly for the taxpayers we all serve.”

For Fiscal Year 2020, the majority of revenues that Kentucky’s county jails reported as receiving from communication services and equipment contracts came from commissions and technology grants.

During FY 2020, 75 county jails reported commissions of more than $9.68 million.

Additionally, 29 jails received over $1.38 million from technology grants during FY 2020.  These technology grant funds were used for a variety of purchases, a sample of which are detailed in our report.

Harmon’s data bulletin also highlights the types of benefits that jails were eligible to receive from communication services and equipment contracts. The below charts detail the types of benefits auditors identified and the frequency in which benefits were included in these contracts:

Click to enlarge

Description of Benefit Types

Source: APA, based on a comprehensive review of county jail communication services and equipment contracts.

Benefit Types within Contracts

Source: APA, based on county jail communication services and equipment contracts.

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Because procurement of these contracts is not addressed in Kentucky statutes, Harmon’s office says guidance is limited to jailers on communication services and equipment contracts.

For example, if a jailer is seeking to award a contract to the best bidder, it is unclear whether that would steer an award toward maximizing revenue for the jail, or providing the lowest cost services to inmates, or some balance between those and other potential factors.

“I believe the General Assembly should pass legislation to provide guidance on procuring these contracts, clarify requirements on the use of technology grants and similar funds, and, most importantly, ensure full transparency on the reporting of benefits and revenues jails receive from these contracts,” Harmon said. “My office stands ready to work with legislators and be a resource on this topic in the 2022 Regular Session.”

The data bulletin report, “An Examination of County Jail Communication Services and Equipment Contracts,” can be reviewed on the auditor’s website.

Categories: Local News, News, State News

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