Mississippi Department of Corrections’ FY 2014 Cost Per Inmate Day
Executive Summary
Background
During its 1994 special session, the Legislature passed Senate Bill 2005 (now codified as MISS. CODE ANN. Section 47-5-1201 et seq. [1972]) to address short- and long-term bed capacity within the state’s correctional system. The bill created the State Prison Emergency Construction and Management Board to expedite the contracting and construction of proposed public and private prison facilities authorized by the bill.
MISS. CODE ANN. Section 47-5-1211 (3) (a) (1972) states:
No contract for private incarceration shall be entered into unless the cost of the private operation, including the state’s cost for monitoring the private operation, offers a cost savings of at least ten percent (10%) to the Department of Corrections for at least the same level and quality of service offered by the Department of Corrections.
The law also required that the state cost per inmate day be certified annually by a certified public accountant and that the certified cost be used as the basis for verifying the ten percent savings required for private contractor costs. Historically, MDOC has taken the cost of operation of similar units and adjusted them to recognize economies of scale to arrive at a cost of operation of a 500- or 1,000-bed facility.
During its 2012 Regular Session, the Legislature passed H. B. 440 (amending MISS. CODE ANN. Section 47-5-1211 [1972]), which requires the cost per inmate day calculation to occur every two years instead of annually and to require development of a current cost-based model for the calculation. The model serves as the basis of the cost per inmate day calculation.
The cost-based model was applied to MDOC’s East Mississippi Correctional Facility, a private prison for male inmates with mental health needs. The cost figures presented in this report are based on the application of the cost-based model utilizing average MDOC costs and the security requirements and medical needs of MDOC’s East Mississippi Correctional Facility. PEER emphasizes that the cost figures in this report are only applicable to the East Mississippi Correctional Facility and should not be used as an indicator of costs in any other MDOC facility. Because the security requirements and medical needs are higher for inmates housed in the East Mississippi Correctional facility, the cost per inmate day for minimum- and medium-security level inmates housed in other MDOC facilities would be lower. The cost-based model provides MDOC management with the ability to determine MDOC’s costs for any current or proposed privately operated prison that can be used in the negotiation of private prison rates and achieve at least the ten percent savings required by statute.
Cost Per Day Determination
MDOC’s FY 2014 cost per inmate day for a model facility based on the security requirements and medical needs of inmates at the East Mississippi Correctional Facility totaled $67.95.
MDOC’s FY 2014 cost per inmate day for a model facility based on the security requirements and medical needs of inmates at the East Mississippi Correctional Facility totaled $67.95 and included the following components:
| Allocated Costs | |
| Administrative costs | $ 3.66 |
| Parole Board | 0.09 |
| Subtotal: Allocated Costs | $3.75 |
| Operating Costs of the Unit | |
| Security personnel | 26.84 |
| Nonsecurity personnel | 8.64 |
| Other Costs | |
| Food | 3.14 |
| Medical | 18.95 |
| Utilities | 3.76 |
| Other | 2.87 |
| Subtotal: Operating Costs | $64.20 |
| Total Per Day Cost | $67.95 |
Negotiating Private Prison Payments
PEER believes MDOC should negotiate private prison contracts to yield savings significantly greater than the ten percent required by law.
PEER cautions the reader that, as required by law, the cost figures presented in this report represent actual costs to MDOC. State law also requires that private prisons represent at least a 10% savings to MDOC’s costs for the same level and quality of services. It should be noted that cost savings offered by private prisons may exceed the ten percent threshold. Therefore, when negotiating private prison payments, items borne solely by the state should be eliminated and due consideration given to reducing other costs in which the state bears additional or different costs than the costs incurred by private prisons.
Private prisons pay for the first seventy-two hours of medical care for inmates. After this period, the state bears the costs for ill inmates. Therefore, additional savings may be achieved by negotiating for savings beyond the ten percent mandated by law.
The administrative responsibility of the state differs from that of the administrative function of private prisons. Therefore, administrative cost represents an area that may contribute savings beyond the ten percent mandated by law.
PEER believes that private prison contracts should yield savings significantly above the ten percent required by law. See “Schedule of Considerations for Private Prison Contract Negotiations,” page viii of this summary, for areas where savings may be achieved by more efficient contracting.