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MA DOC Income & Expense Report 2014-2015, Norfolk Lifers Group, 2015

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A REPORT ON THE INCOME AND EXPENSES FROM
MASSACHUSETTS DEPARTMENT OF
CORRECT tON'S
CENTRAL INMATE BENEFIT FUND
CENTRAl. LAW LIBRARY ACCOUNT

AND
CENTRAL PROGRAM ACCOUNT

FOR THE PERIOD
JULY 1, 2014- JUNE 30, 2015

By
Gordon Haas

Chairman
Norfolk Lifers Group

MCI-Norfolk

.

P.O. Box 43
Norfolk, MA 02056

OCTOBER 2015

TABLE OF CONTENTS

Highlights
Introduction

1-2

Central Inmate Benefit Fund (Z-1)

2-5

Central Law Ubrary Account (Z176)

5-6

Central Program Account

7-8

Ave Year Comparison of Income and Expenses For The
Central Law Ubrary Account

8

Ave Year Comparison of Income and Expenses For The
Central Program Account

9

Two Year Comparison of Income and Expenses For The
Central tnmate Benefit Fund

10

Conclusion

10-H

Highlights of Report On Central Inmate Accounts/Funds for 711114-6/30/14
1) As of the publication of this report, it is estimated that over $2,000,000 remains
unspent in three Central DOC accounts/funds which were established to provide benefits to
prisoners. {Page 10)
2) The total of the Ending Balances of the three accounts/funds - the Central mmate

Benefit Fund (CfB), the Central law Library Account {Z176), and the Central Program Account

-on June 30, 2015 was $1 ,978,446.54. {Page 10)
3) In Fiscat 2015, a total of $985,763.86 was deposited into the three Central Accounts
!Funds. (Pages 2, 5, and 7)
4) Those funds were generated primarily from commissions paid to the DOC from
Keefe Commissary Network from sales of commissary, clothing, and appliance items to
prisoners. (Page 1)
5) Jn Rscal 2015, a total of $781,631.84 was spent from the three Central Accounts/

Funds. (Pages 2, 5, and 7)
6) $204,132.02 remained unspent in fisatl 2015 from the three Central Office
Accounts/Funds. (Page 10)
7) Details of the expenditures of funds from each of the three Central Office Accounts/
Funds are listed on pages 3, 6, anQ.1_
8) A five year comparison of Income and Expenses for the Central law Ubrary
Account and the Central Program Account is presented on page 8.
9) A two year comparison of the income and expenses from the Central Inmate Benefit

Fund is presented on page 10.

-.~

A REPORT ON THE CENTRAL INMATE ACCOUNTS/FUNDS FOR 1l-IE
PERIOD OF JULY 1, 2014- JUNE 30,2015
1.) Introduction
The MA Department of Correction (DOC), pursuant to 103 DOC 476.10 (Department of
Correction Program Account) and 103 DOC 476.11 (Law Library Account), maintains two
separate accounts, ostensibly to provided services or benefits· to inmates. These accounts are
funded by monthly assessments of fixed percentages from the revenues taken. in by each
institution. The Law Library Account receives 35% [1 03 DOC 476.11 (1 )] of said revenues each
month; the Program Account receives 10% [103 DOC 476.10(2)]. Each institution.is required
on the 15th of each month to submit an Inmate Benefit Revenue Report indicating the Total
Revenue and Expenditures, including the aforementioned assessments.
Revenues at the institutional level come primarily from commissions received from
Keefe Commissary Network (KCN). The commissions are a percentage of the funds paid by
prisoners for purchasing commissary items, clothing, and appliances, including MP3/MP4
music sales, which are returned to the institution as a condition of KCN's being awarded the
contract to provide such services; Additional sources of revenue for institutions include
commissions received on vending machine sales, interest, soda bottle returns, and locker
money collected from visitors. The revenue collected from KCN on commissary sales alone
typicaUy comprises over 90% of the monthly income received by institutions.
The DOC established the Program Account as "an effort to identify and · utilize all
available resources ... to supplement existing programs or funding for new programs
throughout the Department." [103 DOC 476.10(1)] The DOC does not in 103 DOC 476 indicate
any reason why the Law Library Account was established or how the funds· are to be
expended. In 2009, the author of this report inquired why the Law Library Account assessment
of 35% was so high? The response from the then Director of Support Services was that the
funds were needed at that level in order to complete the installation of the computerized· law
library system in all institutions. By 2015, that installation had been finished for at least two
years.
The Central Inmate Benefit Fund (CIB) (Z1) is not referenced in 103 DOC 476. Z1
accounts are maintained in each institution and the CIB appears to be an extension of the
individual institutional Z1 accounts. The DOC does not assess institutional revenue to fund the
CIB Fund.
The superintendent in each institution is responsible for the spending of the 55% of the
revenue remaining in each institution after the assessments to the JCentral Office have been·
disbursed. According to 103 DOC 476.12{2): "Expenditures of such funds shall benefit the

1

Central Inmate Accounts/Funds for 711/14-6130115
general inmate population or be for any goods or services determined by the Commissioner to
be necessary to maintain and/or enhance the delivery of services to inmates." It should be
noted that any expenditure exceeding $1,000 at the institutional level must be given written
approval from the Deputy Superintendent, Administrative Services. [1 03 DOC 476.12(5)]
The instant report presents data and comments on the income and expenses into and
from three Central accounts relating to inmate funds. In addition, there are comparisons of total
income and expenses of both the Program Account and the Law Ubrary Account for fiscal
years 2011 through 2015. Data for the Central Inmate Benefit (CIB) (Z1) has been collected by
the author of this report only for fiscal 2014 and fiscal 2015. Consequently, a comparison for the
CIB for those two years only is included. The superscript numbers indicate corresponding
items in Comments sections after the presentation of the balance sheets, sources and uses of
funds for each of the three accounts/funds.
To review the report on these three accounts for Fiscal 2014, as well as other reports
produced by the Norfolk Ufers Group, go to: www.realcostofprisons.org/writings. The author of
the instant report and the Norfolk Ufers Group thank Lois Ahrens of The Real Cost of Prisons
Project for her much valued support, including the postings of this report and others on the
above noted website. Please direct any comments or questions regarding this report or any
others produced by the Norfolk Ufers Group to the author (MCI-Norfolk, P.O. Box 43, Norfolk,
MA 02056) who is solely responsible for their contents.

2) Central Inmate Benefit Fund (CIB) (Z1)
a) Balance Sheet (as of 6/30115)

$838,192.711

Beginning Balance (7/1114)
+Income

101.266.94

Subtotal

939,459.65

-Expenses

322.502.12

Ending Balance (6/30/15)

$616,957.53

b) Sources of Funds (711114- 6/30/15)

$65,169.36
17,149.252
10,135.593
6,475.60
1,415.06
920.05
2.00
$101,266.94

SecurePak Commissions
MP3 Commissions
Transfers From Other Funds
Access Commissions
Interest
Convertor Boxes
Inmate Restitutions
Total
2

Central Inmate Accounts/Funds for 711114-6/30115

2) Central Inmate Benefit Fund (CIB) {Z1)
c) Uses of Funds (7/1/14- 6/30115)
GYM Floor- Walpole
Phone Interpretation Fees
Cabling System at MCI-F
Swank Contract
General Ubrary
Transfer to MASAC IBF
Repairs to Shattuck
Twenty laptops
Verizon
Check Printing
3 Washers I 3 Dryers - MTC
Freezer
Adjustment to BSH IBF
Reentry Resource Com. - MCIN
Advertisement in Boston Herald
Office Supplies
Bookcase
Shattuck - Security Pens
MassCor

$66,443.00
53,194.25
49,163.36
46,575.004
25,000.00
20,000.00
15,186.11
14,678;4.{)5
9,260.00
8,798.96
5,130.00
4;075.00
1,711.98
1,450.4~

883.14

347.28
322.94
149.64
132.65

$322,502.12

Total
d) Comments on Central Inmate Benefit Fund (CIB) CZ1)

1. This balance exceeds the ending balance for 6/30114 as computed by the author in
the 2014 report by $97,888.18. The difference can be accounted for by the fact that the author
did not have a beginning balance for 711/13 and thus assumed a beginning balance of $0.00.
The beginning balance for 7/1/14 was calculated by the author based on the data provided by
the DOC for Total Income into and Total Expenditures from the CIB up to 7/1/14; Given the
data received for the last two fiscal years, it now appears that the CIB beginning balance on
7/1113 was $97,888.18
2. In an amendment dated 7118/13 to the contract with Keefe Commissary Network
{KCN), signed by then Commissioner of Correction Luis Spencer, the DOC agreed to several
alterations. The changes relating to this report were as follows:
a) all MP3/MP4 players and accessories "will be non-commissionable items."
Thus, the DOC does not receive any commissions on sales of MP3/MP4 players or
accessories purchased by prisoners. Consequently, KCN retains an profits on such
sales. {p.2 of 7/18113 Amendment);
b) The DOC would, however, receive $0.13 for every song purchased and
downloaded to MP3/MP4 players by prisoners. (p.2 of 7/18113 Amendment);

3

Central Inmate Accounts/Funds for 711/14-6130115
c) Kiosks are to be installed by KCN for use in commissary purchases by
prisoners, including songs. The kiosks "shall remain the property of KCN at all times
during the Contract duration period." {p.3 of 7/18113 Amendment);
d) The commissions paid to the DOC by KCN on commissary sales would
be reduced from 18% to 14.95%. The purpose of the this reductiOn is to reimburse

KCN for $1 ,312,549, the projected cost of installing the Kiosks. The commission rate is
to retum to 18% once KCN has been reimbursed the installation costs. {p.4 of 7118/13
Amendment);
On 10/31/13, the DOC, signed by Contract Manager Brian Keaman, agreed to another
amendment to the contract with KCN. The only change relevant to this report was that the
commission paid to the DOC from KCN for each song purchased and downloaded by
prisoners was reduced from $0.13 to $0.05. As a result, KCN, which charges $1.85 per song,
retains $1.80 from the sale of every song to prisoners. Thus, the only commission amount
received by the DOC from the sales of MP3/MP4 players, accessories, and songs is 5¢ for
each song.
In the data provided by the DOC for the CIB for 711/14 - 6/30115, there were two
separate recurring entries as income noted as either MP3 songs or simply MP3 Commissions. The total for the specifically noted entries as MP3 songs was $8,291.20. The
total for the other designation was $8,858.05. Assuming the DOC was adhering to the
amendments listed above, then both sets of entries should be considered for the purchase of
songs since that is the only category for which KCN is contractually obtigated to remit commissions to the DOC, specifically to the CIB. Thus, assuming the entire $17,149.25 received in
commissions from KCN were for songs at 5¢ per song, then 342,985 songs were purchased
by prisoners in fiscal 2015. Had the DOC not agreed to reducing the commissions paid by

KCN on songs from 13¢ to 5¢, the DOC would have received $44,588.05 in revenue from KCN
for the 342,985 songs purchased by prisoners.

tn summary, in agreeing to these two amendments, the DOC, in effect, lowered the
commissions paid to individual institutions on commissary sales, by far the largest source of
revenue for each prison; agreed to reimburse KCN for more than $1.3 mHiion for installing the
kiosks; agreed that KCN maintained ownership of those kiosks and could remove them if the
DOC terminated the contract with KCN; and agreed to allow KCN to keep all profits from the
sales of MP3/MP4 players and accessories. It is also significant to note that in lowering the
commissions paid by KCN on commissary sales, none of the funds the DOC agreed to forego
were returned to prisoners in the form of tower commissary prices.
3. Includes a transfer of $9,260.00 from the law Ubrary Account {2176).

4

Central Inmate Accounts/Funds for 7/1114-6/30/15
4. It is interesting that the DOC continues to pay annually over $46,000 for a licensing
fee to Swank for the renting videos to be shown in those institutions which have internal cable
systems. It would seem the money would be more productively spent investing in an
appropriate cable system which would broadcast sporting events as well as movies and other
educational programs. Sporting events are important for prisoners and those events are rapidly
disappearing from local and national television stations. The DOC needs to explore options for
introducing a cable system which meets correctional requirements now, rather than later. As
win be demonstrated, there is plenty of money available to introduce cable·in all institutions.
5. It is difficult to understand how the purchase of twenty laptops benefited any

prisoner. What are these Laptops used for and where? The DOC should also investigate
tablets and/or laptops for prisoners. Using tablets would reduce the amount of paper, books,
and magazines retained by prisoners. Tablets are available which have been configured to
meet the security needs in correctional institutions. Such tables have been introduced in other
prisons and jails in the country.
3) Law Ubrary Account (Z176)
a) Balance Sheet {as of 6/30/15)

$579,336.061

Beginning Balance (711114)
+Income

680,784.47

35% Assessments
Interest
GTL

1,418.46
1.066.47

683,269.402

Totallncome

1,262,605.46

Subtotal

279,206.843

-Expenses

$983,398.624

Ending Balance {6/30115)
b) Sources of Funds (711/14- 6/30/15)
35% Assessments from tnstitutions5, 6
Interest
GTL Commission?

$680,784.47

Total

$683,269.40

5

1,418.46

1.066.47

Central Inmate Accounts/Funds for 711114 - 6/30/15

3) Law Library Account (Z176) cont.
c) Uses of Funds (711114- 6/30/15)
Lexis Nexis
Thomas Reuters - West
Verizon
CITRIX 200 Licenses
Transfer of Funds to IBF
Lawyers Weekly
Lawyers Diary
Matthew Bender
BNA

$117,112.06
75,919.82
54,031.71
11,000.00
9,260.00
6,443.00
4,127.00
890.67

Total

$279,206.84

422.58

d) Comments on Central Law Library Account {Z176)

1. Calculated by the author by subtracting Total Expense Transactions on 711/14
{$6,327,739.95) from Total Income Transactions {$6,907,076.01} on the same date as noted in
the data provided by the DOC.
2. Does not include income listed from voided checks.
3. Does not include expenses for which checks had been voided. The income and
expenses for those entries offset.

4. The current -balance in the Law Library Account on 9114115, the date the data was
printed, was $1 ,083,899.38.
5. The Assessments for NCCI for July 2014 ($3, 767.68), entered on 8115/14 (Receipt fl
26341970) and for August 2014 ($3,767.68), entered on 9111114 (Receipt #26513194) were
identical. This is an anomaly which bears investigation. For these both to be accurate, the totalof all income received by the institution for each of those months would have to have been
equal. That is highly unlikely.
6. The Assessments for SMCC for November 2014 {$1,174.95), entered on 1219/14
(Receipt #27071639) and for December 2014 {$1,174.95), entered on 1/20115 (Receipt

#27326526) were identical. This is an anomaly which bears investigation. For these both to be
accurate, the total of alt income received by the institution for each of those months would -have
to have been equal. That is highly unlikely.
7. On 11/26/14 (Transaction #26993111) $1,066.47 was entered as - GTL Oct 2014
BSH. If this was for telephone commissions from GTL, it should have been deposited in the
Central Inmate Benefit Account (CIB). The amount has been included as a Source of Funds in

the Law Library Account for fiscal 2015 as the $1 ,066.47 was not transferred to the CIB.

6

Central Inmate Accounts/Funds for 711114 ~ 6/30/15
4) Central Program Account
a) Balance Sheet {as of 6/30/15)
Beginning Balance (711114)

$366,045.75

+Income

201.227.52

Subtotal

567,273.27

-Expenses

189.182.88
$378,090.391

Ending Balance {6/30115)
b) Sources of Funds (711/14- 6/30115)

711114 -11114/14
11115114- 1/9115
1110115 ~ 6/30/15

$62,722.88
35,078.25
103,426.39

Total Income

$201 ,227;522

c) Uses of Funds (711114 - 6/30/14)
BSH Day Rooms
BSH Comfort &Quiet Rooms
Framingham Restart Chairs
NECC Auto Alignment
NCCI Building Trades
Met-Norfolk Welding
Bay State Smart Boards
MCI-C Restart Chairs
SBCC Barber Chairs
NCCI. Small Engine Uft
BSH Art & Therapy
Indirect
BSH Keyboards

$127,302;00
14,309.84
11,413.75
10,301.28
8,73253
5,713.78
·4,382.29
2,082.75
1,678.00
1,585.00
902.00
625.76
153.90

Total

$189,182.883

d) Comments on Program Account
1. The data provided by the DOC shows an ending balance on 6/30/15 of $378,244.29.
See oomment #3 below for an accounting of the difference of $153.90.
2. The data provided by the DOC did not specify the individual sources of income. 103
DOC 476 requires each institution transfer to the Central Program Account 10% of its total
income for that month. Another source is· Interest earned on account balances.

7

Central Inmate Accounts/Funds for 711114 - 6130/tS
d) Central Program Account Comments cont.
3. The final listing of Total Expenses as of 6/30115 did not include the $153.90 spent for
BSH Keyboards listed on the data provided by the DOC for the Program Account for the period
711114 - 11114/14. As a result, the Total Expenses for the Program Account in this report

exceeds the Total Expenses on 6/30115 as provided by the DOC, by $153.90.
5.) Ave Year Comparison Of Income And Expenses For The Law Library Account <Z176)
2014

2011

2012

2013

Income

673,958.46

718,915.52

833,678.62

736,571.30

683,269.40

Expenses

461.436.43

462.747.50

378.892.25 1 .208.127.061

279.206.84

212,522.03

256,168.02

454,786.37

404,062.56

Net

{471,555.76)

2015

1. includes a transfer of $800,000 to the Central Inmate Benefit Fund {CIB). Expenses for

actual Law Library items, excluding that transfer totaled $408,127.06.
The total income for the five year period was $3,646,393.30. Total expenses for the
period

was $2,790,410.08, leaving a surplus of $855,983.22. The total expense figure cited

above excludes the $800,000.00 transfer to the CIB in October 2013 as noted above. The
average annual expenditures for the five year period from the Law Library Account, excluding
the $800,000.00 transfer was $558,082.02. The average annual income for the five year period
was $729,278.66.
As was noted in the 2014 report on the Law Library Account, the 35% assessment
charged to each institution remains exceedingly high. That fact is emphasized by the continued
transfer of funds from the Law Library Account to the CIB. Note the transfer of $9,260.00 from
the Law Library Account to the CIB in Rscal 2015. (See page 4, Comment #3 of this report.)

The 35% ·assessment needs to be reduced to no more than 20%. This will stilt allow sufficient
funds to cover actual Law Library expenses and, at the same time, leave more funds at the
institutional level to be spent on local needs. If the assessment is to remain at 35%, a decision
to be made by the Commissioner, then the excess funds can be used to pay for cable systems
at the institutions and/or an increase in inmate wages, which have, save Industries, remained

the same for at least three decades, yet commissary, clothing, and appliance costs continue to
rise.

8

Central Inmate Accounts/Funds for 711114-6/30115
6.) Five Year Comparison Of Income And Expenses For The Central Program Account

2011

2014

2015

2012

2013

192,348.13

205,489.57

237,076.64

208,973.32

201,227.52

Expenses 154.071.64

213.790.53

132.634.22

92.438.98

189.182.88

104,442.42

116,534.34

12,044.64

Income

Net

38,276.49

The total income for

tr.e

(8,300.96)

five year period for the Central Program Account was

$1,045,115.18, an average of $209,023.04 each year. The total expenses for the Central
Program Account for the same period was $782,118.25, a yearly average of $156,423.65. The
total surplus in the Central Program Account, not including the beginning balance on Juty 1,

2011, was $262,996.93 or an average of $52,599.39 per year.
The ending balance for the Central Program Account on 6/30/15 {see p. 7 of this report)

was $378,090.39. Tr.e differ-ence- $115,093.46- between the 6/30/15 ending balance and the
total surptus ($262,996.93) for the five year period woutd be the beginning balance in the
Central Program Account on 711/11.
·It is cfifticult to understand the need for the Central Office to simply stockpife nearly
$400,000 in an account earmarked for programs to benefit prisoners. tf the DOC Central Office
does not know vr'here or how such funds can be effectively spent, then the funds should be

returned to the individual institutions in proportion to the amounts each institution contributed.
One· area which cries out for a financial infusion is vocational training. It is clear that
securing an adequately paying job upon release is one major factor in assisting a prisoner who
has returned to society to remain out of prison and be a productive ·citizen. PrisoneiS need
such training. Utitizing the nearly $400,000 left in the Central Program Account on June 30,

2015 for developing and implementing effective vocational trairbng programs at the institutionat

level woutd be an exceHent appfication of such funds. Every institution need not offer every
vocational program. Rather, to eam the best retum on the investments, certain state--of-the·art

vocational prograr'Tls coutd be estabfJShed in specific institutions, e.g., welding in one, auto or
computer repair in ariOther, and so forth. Prisoners who desire to learn a particutar trade or skit!

can then be transferred to the app.'Vpriate institution.

9

Central Inmate Accounts/Funds for 7/1114-6/30115
7.) Two Year Comparison Of Income And Expenses For The Central Inmate Benefit Fund
2014

2015

Total

Income

881 '180.611

101,266.94

982,447.55

Expenses

140.876.08

322.502.12

463.378.20

Net

740,304.53

(221 ,235.18)

519,069.35

1 Includes the

$800,000 transfer from the Law Ubrary Account
in October 2013.

There is only a two-year comparison for the CIB because the author has data for just
Fiscal 2014 and Fiscal 2015. A combined surplus of nearly $520,000 is consistent with the
surpluses in the other Central Office accounts and how the DOC is managing, or failing to
manage, those funds, i.e., stockpiNng funds - a very inefficient use of funds.
8.) Conclusion
In FiscaJ 2015 alone, the combined net amount of funds i.e., Income - Expenses,
excluding the beginning balances in each account, was $204,132.02 (excludes the transfer of
$9,260 from the Law Library Account to the CIB - see page 6.) That underspending cries out for
an explanation.
Even more staggering, however, is that the total amount of the Ending Balances in the
three accounts on June 30, 2015 was $1 ,978,446.54! Nearly $2 mntion - $616,957.53 in the
CIB (31%), $938.398.62 (50%) in the Law Library Account, and $378,090.39 (19%) in the
Central Program Account - was left accumulating a minuscule rate of interest. Assuming that
this mismanagement of funds continues to the present day, then the total amount of unused
funds in the three accounts must now exceed $2,000,000.
On June

30~2014,

assuming the revised beginning balance on July 1, 2013 of

$97,888.18 (see page 3), the total surptus in the three accounts was $1,784,326.13. Thus, in
Fiscal2015, the total surplus of unused funds in the three accounts increased by $194,120.41!
See Table below of the total surpluses for 2014 and 2015.
2014
CIB

2015

Net

838,192.71

616,957.53

(221 ,235.18)

Law Library Account

580,087.67

983,398.62

403,310.95

Program Account

366,045.75

378,090.39

12.044.64

Total

194,120.41
10

Central Inmate Accounts/Funds for 711114-6/30/15

The public-at-large, the legislature, the prisoners who are retumir.g to society iH prepared for the
transition and without the requisite skills to be productive {;ittzens, and the prisoners remaining
in prison seeking rehabilitation aU deserve an answer to one simple question: What good does
the DOC see in taking funds from the hands of those who can use them best - the institutions -

and then simply holding those funds in the DOC's c-entral accounts?

The DOC continues to misuse funds earmarked for benefiting inmates, and,
presumably society as a whole, by failing to adequately prepare prisoners to function as lawabiding citiz"E!ns rather than retur-ning to prison again and again and again. U is difficult to believe,
therefore, that the DOC is serious in fulfilling its mission to protect the public by reducing

recidivism.

tt is not unreasorable to suggest that, if the DOC remains intransigent in its refusal

to use the funds effectively which it has assessed from the institutions, then the Commissioner
needs to revise the assessment rates downvtai-d to allow more funds to be retained at the
institutional level or seek out and find those who are ready and able to introduce the programs

and services which actual~ benefit prisoners and society.
- End of Report -

 

 

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