Breakeven Analysis for Mississippi’s Regional Correctional Facilities, October 1, 2009-June 30, 2010
Executive Summary
PEER contracted with the accounting firm BKD to compute a breakeven analysis for each of Mississippi’s eleven regional correctional facilities—specifically, the minimum daily census of state inmates required for each regional facility to cover its fixed and marginal costs associated with housing state inmates. The period of review was October 1, 2009, through June 30, 2010. During the period of review, the state reimbursed the regional correctional facilities at a per diem rate of $29.74. The calculation of a breakeven point only encompassed state inmates incarcerated at each facility.
The breakeven point is the level of operations at which a facility’s revenues and costs are equal. Seven facilities operated at calculated breakeven points that were higher than the minimum number of inmates—ranging from 200 to 260—that the Mississippi Department of Corrections is required to provide to the respective facilities under the present contracts. Three of the facilities (i.e., Bolivar, Kemper-Neshoba, and Marion-Walthall facilities) operated with a breakeven point higher than the average daily census of state inmates incarcerated in each of the facilities during the review period. One factor contributing to this is that these facilities have higher than average operating costs.