WHEREAS, in December 1995, the Department of Public Safety began transferring inmates to out-of-state facilities to address persistent prison overcrowding; and

WHEREAS, this transfer was viewed as a stop-gap measure that would give prison officials time to increase in-state capacity; however, twenty years later, approximately 1,600 Hawaii inmates continue to be incarcerated in correctional facilities in Arizona; and

WHEREAS, the Auditor issued Report No. 10-10 titled Management Audit of the Department of Public Safety's Contracting for Prison Beds and Services in 2010; and

WHEREAS, in Report No. 10-10, the Auditor:

(1) Found that the Department of Public Safety did not provide detailed and accurate financial information to policymakers and the public, even though this information is a key component in solving the State's chronic prison overcrowding problem;

(2) Found that the Department of Public Safety circumvented the State's procurement process when it established an inter-governmental agreement with the City of Eloy, Arizona, and Corrections Corporation of America for prison beds and services at Florence Correctional Center, Red Rock Correctional Center, and Saguro Correctional Center;

(3) Concluded that inadequate financial reporting and circumvention of procurement requirements, among other factors, created an almost total lack of monitoring for contract compliance, inadequate documentation of on-going contract performance, and no provisions for record retention; and

(4) Recommended that the Department of Public Safety must improve the methodology employed to calculate comparable inmate incarceration cost data as well as its processes for monitoring the operations of private prisons; and

WHEREAS, the Auditor issued Report No. 13-03, titled Report on the Implementation of State Auditor's 2010 Recommendations in 2013, which included a follow-up on the Department of Public Safety's prison bed contracting and the implementation status of recommendations offered in Report No. 10-10; and

WHEREAS, in Report No. 13-03, the Auditor found that although the Department improved the accuracy of its incarceration data through better methodology, procurement compliance, particularly monitoring of contract compliance and performance, was still an issue; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2015, that the Auditor is requested to conduct a follow-up audit to the Management Audit of the Department of Public Safety's Contracting for Prison Beds and Services, Report No. 10-10; and

BE IT FURTHER RESOLVED that the Auditor is requested to assess and update the status of the recommendation to the Department of Public Safety to improve its processes for monitoring the operations of contracted private prisons including the Auditor's recommendations to:

(1) Develop a quality review program to ensure the monitoring of records and reports and documentation of inspection results;

(2) Establish policies and procedures related to documenting contract compliance issues and the retention of records; and

(3) Update its policies and procedures for fiscal monitoring and the approval and processing of invoices; and

BE IT FURTHER RESOLVED that the Auditor is requested to report findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2016; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Auditor and the Director of Public Safety.

	OFFERED BY:	_____________________________

Report Title:

Auditor; Prison Bed Contracting

HOUSE OF REPRESENTATIVES	H.R. NO.	40
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII