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HELENA - Montana's penal agency has improperly handed out millions of dollars to private companies in no-bid deals or allowed companies to supervise Montana prisoners for years in deals with unsigned contracts, a new audit shows.

However, Corrections Department officials said Tuesday that some of those findings are misleading and don't reflect the unusual nature of Corrections, which must safely supervise and rehabilitate more than 10,000 Montana felons.

The report was presented Tuesday to members of the Legislative Audit Committee.

"We'll improve," Department of Corrections Director Mike Ferriter told lawmakers. "This is not a good place for me to be standing."

The report looked at the way the agency handles its many contracts.

Montana relies on private companies for much of its correctional system, including all of the state's innovative lockdown treatment centers. Private companies, which by law must be nonprofit corporations organized in the state of Montana, run all of Montana's pre-release centers, lockdown treatment centers, even a prison.

Those services have been credited with helping Montana felons rehabilitate themselves and with helping the state keep its correctional budget low.

The state now has a handful of nonprofits whose businesses and the state correctional philosophy are entwined.

But according to legislative auditors, the agency has been lax in managing the contracts with such companies. In one case, according to the audit, a company transported Montana inmates three years with no signed contract in place for the service.

The report also said the agency in one instance allowed a company to open a lockdown alcohol treatment center in Glendive without putting that service up for bid.

Several lawmakers on the committee said Corrections' problems with contracts are historic and must be fixed.

"Are we playing with fire here?" said Sen. Taylor Brown, R-Huntley, questioning that if a company supervising Montana inmates without a contract ever had an accident, whether its liability insurance cover the costs.

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Ferriter said the agency agreed with almost all of the audit's findings and pledged to work to fix the problem. There are no more unsigned contracts, he said.

But Ferriter said some of the findings were unfair.

For example, auditors questioned the WATCh East, the lockdown alcohol treatment center mostly for women in Glendive. The Glendive facility was opened in 2005 with no competitive bid.

Missoulian State Bureau reporter Jennifer McKee can be reached at 1-800-525-4920 or at jennifer.mckee@lee.net.

 

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