TRENTON - New Jersey's Corrections Department does not adequately monitor state-funded halfway houses, according to a new audit by the state comptroller.
The audit released Wednesday found the state failed to take appropriate action against state-funded halfway house providers following inmate escapes. The state also overpaid other providers and paid some providers that were not fully accredited.
"It is critical that the state takes a more active role in ensuring the success of these programs," State Comptroller Matthew Boxer said. "It cannot simply cut these halfway houses a check and hope for the best."
The state is spending nearly $65 million this year on the program which handles an average of 2,720 residents daily. The homes are intended to prepare them for re-entry into society.
Among other findings, the report said the state overpaid 10 private halfway house providers by $587,000 over a six-year period because of miscalculated per diem rates charged by the providers. The audit also found administrative costs varied wildly - from $0 per inmate bed to $7,354 per inmate bed - among the nonprofit providers.
The comptroller also found that the state failed to adequately supervise the facilities and fine those facilities that let residents with disciplinary problems leave before they could be re-incarcerated.
The audit noted six halfway house residents waiting to be transported back to prison by correctional officers were able to escape because they were not placed in a secured holding area within the halfway house as required by contract.
In three of those instances, a secured area did not even exist on the halfway house premises. Under contracts with the facilities, the state could have fined each provider $30,000 per escape but did not.
Additionally, the report found that the state failed to meet its own guidelines monitoring the halfway houses. In 2009 DOC documented spending 104 days checking the houses when more than 600 days were required; two facilities received no documented visits, the report said.
In a written response to the audit, Corrections Commissioner Gary Lanigan acknowledged problems with the halfway houses and said DOC was working hard to address them.
"We acknowledge there are specific areas of oversight of (halfway houses) that can be strengthened and feel confident that we can quickly improve our performance in these areas through measures that have already been implemented or are already in progress."
The comptroller also questioned DOC about the state's largest provider, Education and Health Centers of America, Inc., because of its subcontracting arrangement with a for-profit company, Community Education Centers, Inc. Under state law, only non-profits can provide halfway house services.
The comptroller's office said EHCA pays CEC the entire contracted per diem rates. Of $400 million the state has paid EHCA since 1997, EHCA has paid CEC approximately $390 million to provide "all the services" under EHCA's public contracts, including the "operation, support services management and maintenance" of the facilities.
Bill Palatucci, a senior vice president and general counsel for public affairs at CEC and a close adviser and friend to the governor, said CEC has had no new contracts since 1998.
"We're still operating under the same agreement that was approved by Attorney General back then, so we're a bit puzzled by the report," Palatucci told The Associated Press. "We'll take a look and talk to the Department of Corrections about it."
DOC told the comptroller's office it will ask the state Department of Law and Public Safety to re-examine the arrangement.
