SlATE OF FLORIDA
DEPARTMENT OF CORRECfIONS
OFFICE OF THE INSPECfOR GENERAL
TO:

James R. McDonough
Secretary

FROM:

Paul C. Decker
Inspector General

DATE:

September 20, 2007

SUBJECT:

REVIEW OF ALLEGATIONS RELATED TO PRISON INDUSTRIES
PROGRAM, REPORT NUMBER Ro602o

The attached report presents the Bureau of Internal Audit's review in response to
allegations of improprieties involving Florida's participation in the federal "Prison
Industries Enhancement Certification Program" (PIEep).
The April 2006 allegations leading to this review were submitted by a fonner inmate
who served time with Florida Department of Corrections (DC). The complaint stated
four main allegations:
1. PRIDE generally has failed to provide prevailing wages or workers' compensation
coverage to inmates working in the PIEep program. The payment of less-than-

prevailing wages in turn reduced the amount paid to DC for "room and board"
deductions.
2. PRIDE entered into a PlEeP-authorized partnership with AIL Industries of
Atlan(a in 2002 for the purpose of processing meat products. Inmates working
on this contract were paid substantially less than the required prevailing wages.

3· PRIDE failed to pay prevailing wages to inmates working on its sign production
contract with Century Graphics of Orlando.
4· PRIDE produced auto license tags for shipment to Liberia in 2004, using inmates
at Union CI who were not paid PIECP-required wages.

With few exceptions, all four allegations were unsupported by evidence.
Should you have any questions or comments related to the report, please contact me or
Donald L. Miller, Chief Intemal Auditor.

Inspector General
PDfDMfdm
Richard Prudom, Chief of Staff

Kathleen Von Hoene, General Counsel
George Sapp, Assistant Secretary of Institutions
Millie Beay, Director of Administration

EXECUTIVE SUMMARY
We conducted this review in response to allegations of improprieties involving Florida's
.participation in the federal "Prison Industries Enhancement Certification Program"
(PffiCP).
PIECP was created by Congress in 1979 to encourage states to establish ~ployment
opportunities for imnates that approximate private-sector work espenence. The
program attempts to place imnates in a realistic work environment, pay them the
prevailing local wage for similar work, and enable them to acquire marketable skiDs to
increase their potential for successful rehabilitation and meaningful employment upon
release.
.
Corrections departments participating in PIECP must meet nine criteria including
payment of prevailing wages, workers' compensation coverage for imnate workers, and
restrictions on amounts deducted from inmates' wages.
The April 2006 allegations leading to this review were submitted by a fonner imnate
who served time with Florida Department of Corrections (DC). The complaint stated
four main allegations:
L

PRIDE generally has failed to provide prevailing wages or workers' compensation
coverage to imnates working in the PmcP program. The payment of less-thanprevailing wages in turn reduced the amount paid to DC for "room and board"
deductions.

2.

PRIDE entered into a PIECP-authorlzed partoership with All. Industries of
Atlanta in 2002 for the purpose of processing meat products. Inmates working
on this contract were paid substaotially less than the required prevailing wages.

3. PRIDE failed to pay prevailing wages to inmates working on its sign production
contract with Century Graphics of Orlando.
4· PRIDE produced auto license tags for shipment to liberia in 2004, using inmates
at Union CI who were not paid PIECP-required wages.

With few exceptions, all four allegations were unsupported by evidence.

BACKGROUND
A total of 50 jurisdictions - specifically the Departments of ~rrectionsin all 50 states are eligible for certification under PIECP. To become certified, each program must
demonstrate to the Bureau of Justice Assistance (BJA) within the U.s. Depa~ent of
Justice, that it meets statutory and guideline requirements, including the followmg:
1. EligibUity. Authority to involve the private sector in the production and sale of inmate-made

goods on the open market.
2. Wages. Authority to pay wages at a rate not less than that paid for work of a similar nature
in the locality in which the work is performed.
3. Non-Inmate worker displacement. Written assurances that PIECP will not result in the
displacement of employed workers; be applied in skills, crafts. or tmdes in which there is a
surplus of available gainfu1labor in the locality; or significantly impair existing contracts.
4- Benefits. Authority to provide inmate workers with benefits comparable to those made
available hy the federal or _e government to similarly situated private-sector employees,
including workers' compensation and, in some circumstances, Social Security.
5. Dedudions. Corrections departments may opt to take deductions from irnnate worker
wages. Permissible deductions are limited· to taxes, room and board, family support, and
victims' compensation. All deductions may not total more than 80 percent ofgross wages.
6. Voluntary participation. Written assurances that inmate participation is voluntaIy.
7. Consultation with organized labor. Written proof of consuhation with organized labor
prior to program startup.
8. Consultation with local private Induatry. Written proof of consultation with local
private industry prior to program startup.
9. National Environmental Policy Act (NEPA). Written proof of compliance with NEPA
requirements prior to program startup.
The Florida Department of Corrections (DC) was first certified for PIECP participation
by BJA in April '995. That certification and the ensuing right to use inmate labor to
produce and sell goods to private enterprise, was transferred to PRIDE Enterprises in
'999. PRIDE Enterprises is a statutorily authorized, private not-for-profit corporation
that has operated most of Florida's prison industries since '979.
The ~atio~ Correctional Industri.es As~tion (NCIA), a professional organization
for pnson mdustry employees, pl'OVldes technical assistance for this program and, under
a grant from BJA, assesses participant compliance with program requirements.
SCOPE AND METHODOLOGY
To gather sufficient and competent evidence to review the allegations we:
•

•

Obtained a recent (2005) NCIA assessment report of PRIDE's participation in
PIECP and used its findings to assess compliance with the above criteria. We
noted that the NCIA report examined aetivlty at or about the time of the alleged
abuses reported by the complainant.
Inquired and obtained written confirmation from BJA of PRIDE's continued
certification under the PIECP program, and
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•

Requested inmate payroll records from PRIDE and compared them to reco~ of
inmate payments maintained by DC's Bureau of Finance and Accouo~.
Although the time needed to obtain the above data was lengthy, '"': felt It
provided the most objective and cost-effective method of evaluating the
complainant's allegations.
RESULTS OF REVIEW

Allegation #

1:

The complaint alleges that PRIDE has failed to meet PIECP requirements relating to
wages and benefits. Specifically, it states that PRIDE is paying only minimum ~e
($5.15 an hour) rather than prevailing wages to PIE workers, and does not pro~de
Workers Compensation. The complaint continues, "As you know the FDOC receives
40% of the wages earned by PRIDE inmate workers to be applied to room and board.
The FDOC has lost millions (of dollars) because of the failure of PRIDE to abide by the
mandatory wage requirements."

Discussion:
In an Aug. 15, 2007 email to this auditor, BJA:s policy advisor for PIECP confirmed that
Pride has maintained continuous PIECP certification since Jan. 1, 2000. To receive
certification, Pride was required to meet all of the above criteria, including those
governing wages and workers compensation. NCIA conducted a Compliance Assessment
of Florida's PIECP program in late 2004. NCIA fouod that PRIDE met wage criteria at
all locations except one (some inmates working on the Huoter Printing contract were
paid sulrcompetitive training wages for longer than the allowable 120-daY/960-hour
limit.) NCIA reported that the back-wage issue was subsequentiycorrected. NCIA aiso
reported that PRIDE had pun:hased workers compensation insurance. We reviewed a
sample of wages paid to inmates in the PIECP program at Union CI and found that
wages met and in some cases exceeded federsl minimum wage requirements. PRIDE
deducts 40% of the inmate's wage for Room and Board, 15% for victim's compensation,
and 10% for court costs if applicable. This total did not exceed the 80% cap on
aggregate wage deductions.

Conclusion: Allegation #1 is unfounded.
Addendum: Although not referenced in the complainant's allegation our
review revealed that DC has not received funds that it previously' had
received for room and board deductions withheld from PIECP Inmate
wages.
Since 2!l00, PIECP room and board deductions have been deposited into the Prison
Industries Trust Fund and subsequently paid to PRIDE. The trust fund was statutorily
established by the 2000 Legis!aiure as a holding fund for inmate wage deductions
auth~rized by the federsl PIECP ~tatute. The enabling legislation does not specifically
mentio~ ",?m and board deductions by name.•However, a review of DC accouoting
records Indicates that the room and board deductions were not paid to DC. Department
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of Fmancial Services records show that moneys which appear to constitute room and
board deductions were placed in this account and were subsequently returned to
PRIDE. Records show that PRIDE requested the money to buy production equipment
such as printing presses, paint tanks and vehicles. Because this activity is not part of the
original allegations which prompted this review, this information has been presented to
General Counsel for review.

Allegation #2'
The complaint alleges that PRIDE formed a partnership with ATL Industries t? Pnx;es5
meat products for shipment to ATL's customers. ATL subsequently brought SUIt agamst
PRIDE for billing, bookkeeping, and inventory issues.
The complaint further alleges that PRIDE operated a facility at Union Correctional
Institution where it used inmate labor to process, pack, label and prepare the products
for shipment to customers throughout the US, while failing to pay prevailing wages to
the inmate workers. PRIDE allegedly paid the workers only 20 to 50 cents an hour, and
did not offer workers compensation or abide by several of the other PIECP
requirements. These issues mirror allegation # I, but pertain specifically to the ATL
relationship with PRIDE.

Discussion:
In response to our request for PIECP payroll information related to An., Brian Connett,
PRIDE's manager of bid administration, wrote that "the AIl. project was not a PIE
project".
Additionally, NCIA's 2004 review of PRIDE made no reference to ATL as a PIECP
contract.

Conclusion; The evidence fails to support Allegation #2.

Allegation #3:
The comp1ajnt .alleges PRIDE designed, manufactured, sold and shipped signs to the
Orlando area SIgn company Century Graphics, without paying prevailing wages. The
complaint further states that in 2004, PRIDE "decided to pay a couple of inmates who
worked on the signs the federal minimum wage (not prevailing wage) for their work on
these products. PRIDE justified this change in policy by stating it had discovered that
approximately 10% of the products were being shipped outside of Florida by the
customer and therefore they were required to pay PIE progrant wages on that
percentage of the contract."

Discussion:
The payroll records we obtained both from PRIDE and from DCs Bureau of Finance and
Accounting show that PRIDE paid wages at or above the federal mininlum to more than
two dozen inmates assigned to the Century S"Jgn contract.
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Additionally, NCIA found PRIDE's metal fabrication industry to be in compliance with
PIECP requirements during 2004·

Conclusion: Allegation #3 is unfQ1mdecL
Allegation #4:
The complaint alleges that the tag plant at UCI "mannfactured, sold and shipped several
thousand auto tags to the country of liberia in 2004 and filled another order from Malta
for thousands more," without paying PIE wages to the inmate workers•.The complaint
further alleges "the tags were shipped to a Ioca1 business in Florida who delivered them
to the government of liberia. It was done in this manner so PRIDE could maintain the
position that as long as they sell to businesses within the state they are not required to
pay PIE program wages to inmate workers. "

Discussion:
NCIA's assessment determined that PRIDE wages for PIECP industries at Union CI
were in compliance with PIECP guldelines during 2004. It does not specifically list tag

production as a covered industry, although part of the metal fabrication operations were
PIECP-certified at that time.

Mr. Connett wrote in response to our inquiry, "No PIE work was performed at the
PRIDE Tag Plant for the dates you requested" (Jan\llllY 2002 tbrough December 2005)

Conclusion: The evidence fails to support Allegation #4·

T1rjs r,evrew was oonducted byBob Macmaster, Management Review Specialist
thIS report to Donald 1- Miller, Chief IniernalAuditor, at (850) 410-4166. .

.

Please address·

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