Michigan Prison Industries Losing Money
Michigan’s prison industries – in which inmates manufacture license plates, furniture and clothing for sale – operated at a net loss of about $8 million over the last four years despite a legislative mandate to be self-supporting, according to an audit released this morning. Story from the Detroit Free Press.
The Legislative Auditor General reported losses of nearly $3 million in 2005 and 2006, and of $2.2 million in 2008. The program recorded a $352,00 profit in 2007, when a new set of standard license plates was produced, the report said. The audit cited high labor costs for both staff and prisoners; at one prison factory staff costs reached 355% of sales, while nearly a third of prisoner labor costs ($1,051,000) were for “idle time” when there was no work to be done.
Officials at the Bureau of Correctional Industries told auditors they had little flexibility to limit supervisory costs and believed putting “prisoners in work situations” even when there was no work to be done “provid(ed) life skill development.”
The audit also cited prison industries’ lack of a business or marketing plan and inefficient use of its delivery system as contributing factors in the operating losses. The prison industries program operates 28 factories in 14 facilities, employing about 1,900 prisoners a year. It has a professional staff of 176.
Department of Corrections spokesman John Cordell said this morning the agency agrees with the findings and has worked over the last 18 months to improve operations, including the development of a business and marketing plan.
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