Entries in Overpaying (1)


Is the Government Overpaying for Prison?

Darrin Klimek/Thinkstock(WASHINGTON) -- Keeping some federal detainees in motels might be cheaper than renting them a cell in a local jail.

A report released Monday reveals the federal government will sometimes pay more than $100 a night to house detainees at state and local corrections facilities. For that price, you can get a clean room, cable TV, and a buffet breakfast at many national motel chains.

An audit conducted by the Justice Department's Office of Inspector General charges that the federal government is paying $1.2 billion a year -- and at least $15 million too much -- for jail space. Ironically, the report also found that the feds are often being ripped off by their correctional colleagues in state and local government.

"We found that state and local detention facilities at times take advantage of a shortage of options for federal detainees and demand rates that appear to generate excessive profits -- sometimes in the range of millions of dollars," the IG report states.

It's simple supply and demand: state and local governments have empty jail cells, the federal law enforcement officials need them to house federal detainees temporarily. Immigration or drug enforcement sweeps, for example, can flood the system with suspects who need to be incarcerated. With demand for jail space high, state and local governments are driving a hard bargain.

The audit found that the federal government pays an average of $65 per night to keep between 35,000 and 37,000 detainees locked up every night. In some cases, however, the audit found the feds pay as much as $119 a night. According to the Hotel Price Index for 2010, the average hotel room in North America cost just under $115 per night.

The IG examined 25 agreements for jail-day rates paid by federal corrections officials, and found that it "potentially paid about $15 million more than it cost the facilities to house federal detainees..." The audit concluded that the federal government "would have realized significant cost savings if it had consistently used a jail's operating expense data as leverage in its negotiations to achieve a fair jail-day rate."

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