Missouri State Auditor Nicole Galloway has released an audit of the County Reimbursement Program, which reimburses county governments for certain costs for housing and transporting state prisoners. The program is administered by the Missouri Department of Corrections. The audit found that a combination of delayed reimbursements due to lack of state funding and increasing incarceration costs has resulted in the necessity for counties to rely on local resources.
“Local taxpayers are left footing the bill because the state has not been keeping up its end of the deal and the cost of incarcerating state prisoners is increasing,” Auditor Galloway said. “This is an issue throughout Missouri but is particularly concerning for smaller communities where revenue is especially limited. Our audit clearly outlines the facts and details the problems with this program so that the legislature can evaluate the information and make changes.”
Under state law, counties can be reimbursed for criminal costs, prisoner transportation, and extradition costs for state prisoners. Counties submit claims throughout the year for these expenses and the Department of Corrections processes these payments on a first-come, first-served basis. However, state appropriations have not been sufficient to cover reimbursement claims.
As of June 30, 2020, the state owed about $31 million to counties that it did not have the appropriation authority to pay. In the fiscal year 2021, the General Assembly approved $52 million for county reimbursements, which includes $9.75 million for unpaid reimbursements. This addresses about a third of the outstanding claims still owed to counties.
The audit reported the Department of Corrections has not requested sufficient funds to pay the outstanding reimbursement claims and past budget requests haven’t included information about the previous years’ shortfalls. The audit recommended that the department request the money necessary to pay all obligations and ensure the financial history of the program is included so that legislators have an understanding of how much is owed to county governments.
Additionally, while the reimbursement rate paid by the state has kept up with inflation over the last 10 years, it is essentially the same as the rate paid in 1998. During this time incarceration costs have continued to increase. The state provides a reimbursement of $22.58 per day, but actual costs average closer to $49 a day. The increasing difference means counties have to subsidize the cost of housing these prisoners. The audit found that counties subsidized an estimated $41 million in incarceration costs for state prisoners during the 2020 fiscal year.
Auditors surveyed counties to better understand the impact of low reimbursement rates and delayed payments. According to these local officials, issues with state reimbursements resulted in not having enough revenue to cover jail costs and, as a result, having to reduce other services or increase local tax rates. Additionally, the lack of revenue leads to difficulty in hiring new sheriffs’ employees due to low salaries or lack of equipment.
The audit also found inconsistencies in the law related to reimbursements. Under the law, the state reimbursement rate can go up to $37.50 a day but is subject to appropriations. However, there are varying interpretations of the statute because this language is not consistent with how reimbursements are set (on a per-day basis) and how state funds are appropriated (by year). The audit recommended that the legislature amend the statute to clarify the intent of the law so local officials can better understand what to expect from the state reimbursements.
The complete audit report is available on the Missouri State Auditor’s website.