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BCSO Did Not Ensure That the Commonwealth Received Appropriate Compensation for the Services It Provided Under Its Service Agreement With ICE.

Audit recommends the BCSO establish a policy that requires the adequacy of this compensation to be annually reviewed.

Table of Contents

Overview

BCSO did not make sure that the amount it charged ICE to house ICE detainees was appropriate. BCSO has entered into an intergovernmental service agreement with ICE to house and transport federal immigration detainees who are in deportation proceedings and are awaiting trial or deportation for violations of US immigration laws, as well as to transport these detainees for deportation activities, court appearances, and medical emergencies. In return for these services, ICE, in its most recent contract, agreed to pay BCSO a negotiated bed day rate,3 which is currently $98. Although BCSO renegotiated the amount that ICE reimburses the Commonwealth for transporting these detainees in 2017, it has not renegotiated the bed day rate for housing them since 2010. As a result, the Commonwealth may not be receiving equitable compensation for these services under this agreement.

Authoritative Guidance

Section B of Article IX of the intergovernmental service agreement between ICE and BCSO states,

Basis for Price Adjustment: A firm fixed price with economic adjustment provides for upward and downward revision of the stated Per Diem based upon cost indexes of labor and operating expenses, or based upon the Service Provider’s actual cost experience in providing the service.

Regarding calculation of adjustments to the bed day rate for detainees, Article XII of the agreement states,

ICE shall reimburse the Service Provider at the fixed detainee day rate. . . . The Parties may adjust the rate twenty-four (24) months after the effective date of the agreement and every twelve (12) months thereafter. The Parties shall base the cost portion of the rate adjustment on the principles of allowability and allocability as set forth in [federal Office of Management and Budget] Circular A-87, federal procurement laws, regulations, and standards in arriving at the detainee day rate.

To administer this contract properly, BCSO should annually review the compensation it receives under the contract to determine whether it is reasonable.

Reasons for Issue

According to BCSO’s Sheriff, the office was unaware that it had not renegotiated the bed day rate since 2010. The Sheriff further explained that because the ICE reimbursement is transferred into the Commonwealth’s General Fund, not retained by BCSO, there is little incentive for his office to determine whether any increases in the bed day rate are necessary. In addition, BCSO does not have controls, e.g., policies and procedures, in place that require it to annually assess the reasonableness of its compensation under this contract.

Recommendation

BCSO should establish a policy that requires the adequacy of this compensation to be annually reviewed and, if necessary, adjusted.

Auditee’s Response

The Bristol County Sheriff's Office [chief financial officer] is responsible to insure each year that revenues generated through ICE detention meet or exceed the cost of care for detainees. The cost per detainee is $88 per day and the rate paid to the BCSO is $98 per day per detainee. Since our cost is $10 less per inmate per day, it is difficult to justify negotiating a higher rate. We have and will continue to analyze our negotiated rate of actual cost versus revenue, and in the instance when justified by cost increases we will negotiate a higher daily rate.

[The] reference to lack of incentive to negotiate new rates was not meant to suggest that we would not be paying attention to the need to renegotiate should revenues not be meeting costs, but rather point out that negotiating to increase contract rates when revenues are exceeding costs, lacks incentive since the Commonwealth absorbs the surplus revenues and leaves the burden of day to day operations on the BCSO.

Auditor’s Reply

Based on its response, BCSO will take measures to ensure that it receives equitable compensation for the services it provides under its agreement with ICE. However, in order to ensure that this happens, we again recommend that BCSO establish a policy requiring this compensation to be annually reviewed and, if necessary, adjusted.

3.    The bed day rate is a daily rate per detainee that, through negotiations, ICE agrees to pay for the temporary housing and detention of ICE detainees awaiting trial or deportation.

Date published: February 13, 2019
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