Departmental

Judiciary and Criminal Justice

Youth and Adult Correctional Agency (0550)

The Youth and Adult Correctional Agency (YACA) is responsible for overseeing and coordinating the activities of the following departments:

• Department of Corrections.

• Department of the Youth Authority.

• Board of Prison Terms.

• Youthful Offender Parole Board.

• Board of Corrections.

• Prison Industry Authority.

• Narcotic Addict Evaluation Authority (paroling authority for the Civil Addict Program).

The agency is responsible for coordinating budget and policy direction for these departments and boards. The Office of Inspector General within the agency provides oversight of internal affairs investigations conducted within the juvenile and adult prison systems. Also within the agency is the Commission on Correctional Peace Officer Standards and Training (CPOST), which was established to develop curriculum and monitor the training of state correctional officers and cadets.

The budget proposed for the agency in 1998-99 is $2.6 million, an increase of $1 million, or 64 percent, over projected current-year expenditures. The budget proposes funding increases to create a permanent staff for CPOST and to increase the number of investigators and support staff allocated to the Office of Inspector General.

Internal Affairs Responsibilities Should Shift to Inspector General

In our 1997-98 Analysis of the Budget Bill (page D-13), we provided an analysis of the California Department of Corrections' (CDC's) fragmented internal affairs operation and offered recommendations for improvement which we believed would reduce the state's vulnerability to litigation and claims for damages in such cases. We proposed, among other changes, that existing CDC internal affairs operations be consolidated under the YACA Inspector General. We further proposed that the mission of the Inspector General be fundamentally changed from one of auditing and monitoring how internal affairs investigations are conducted to becoming the central, independent agency in charge of conducting such inquiries.

Fragmented Resources. In our 1997-98 Analysis, we noted that internal affairs operations had become fragmented primarily because responsibilities and resources were added to the various offices incrementally over many years. Consolidation of all internal affairs operations within the YACA Inspector General, we believe, would eliminate duplicative and low-priority operations and result in the more effective use of state funds for this important function. For example, the YACA Inspector General could cease its involvement in auditing how CDC conducted its internal affairs investigations, and instead use its investigative resources to handle the heavy workload of complaints about alleged misconduct by correctional personnel.

Our proposal was initially approved by the budget conference committee, but was removed from the final version of the 1997-98 Budget Act as a result of negotiations with the administration. The administration preferred a plan by CDC to reorganize internal affairs operations within CDC without any transfer of authority or positions from CDC to the YACA Inspector General. Legislation now pending in the Senate (AB 271, Villaraigosa) would, among other provisions, consolidate internal affairs cases with the YACA Inspector General as we have proposed.

During last year's budget deliberations, the Legislature did approve legislation (SB 386, Peace) to require the new CDC internal affairs office to provide the Legislature with a detailed annual report on its activities and accomplishments. However, the measure was vetoed by the Governor. In his veto message, the Governor objected to the amount of work he believed the SB 386 reporting requirement would generate, but said he was "directing CDC to provide summary data to the Legislature regarding the outcome of internal affairs investigations."

Budget Plan Would Expand Three Internal Affairs Operations. The Governor's 1998-99 budget proposal would almost double, from 52 to 92.4, the collective number of personnel assigned to internal affairs operations by CDC, Youth Authority, and YACA. The full annual operating cost of establishing these additional positions is about $3.4 million. Figure 15 summarizes the budget requests submitted for the three agencies for the 1998-99 fiscal year.

Figure 15
Internal Affairs Funding and Staffing
(Dollars in Millions)
				1998-99
	1997-98			Additional Requested		Total
Department	Positions	Costs		Positions	Costs	Positions	Costs
YACAa	3.0	$0.3		6.4	$0.8	9.4	$1.0
CDCa	46.0	3.2		30.0	1.5b	76.0	4.7
Youth Authority	3.0	0.2		4.0	0.3	7.0	0.5
Totals	52.0	$3.7		40.4	$2.6	92.4	$6.2
aYACA: Youth and Adult Correctional Agency; CDC: California Department of Corrections.
bFull-year cost is $2.3 million.

Based upon our review of the workload computations presented by each of these state agencies, we believe the additional staffing levels are justified. However, we remain concerned that the addition of staffing to three separate entities will be needlessly more costly, and result in a less effective investigatory operation overall, than if their internal affairs activities were consolidated under the YACA Inspector General.

We believe a consolidated internal affairs operation run by the YACA Inspector General, including a system of regional offices such as the CDC internal affairs unit has already established, would reduce travel costs for investigators, reduce other administrative overhead expenditures, and allow for the more effective distribution of investigative assignments. Placing such operations under the control of one central authority would also result in more consistency in investigative procedures and more effective deployment of staff to police a vast statewide system of prisons, juvenile institutions, and parole offices. For example, the expansion of the Youth Authority's internal affairs unit proposed in the 1998-99 budget would leave the department with a total of seven staff to investigate all allegations of misconduct by employees at 11 institutions and 16 parole offices.

More Funding Requests Likely to Follow. The YACA, Youth Authority, and CDC have all indicated that the proposed 1998-99 expansion of internal affairs operations will still collectively leave them with 58 fewer investigators than they contend are justified on a workload basis to carry out their responsibilities. Thus, we anticipate that some or all of the three state agencies will submit budget requests in future years for further additions to their internal affairs funding and staffing. In our view, the creation now of a unified internal affairs operation that is more efficient and well-organized than the present fragmented structure may help the state avoid, or at least reduce, these anticipated further requests for additional investigative staffing and funding.

Meanwhile, the Legislature is not receiving detailed information about the effectiveness of the current, increasingly costly internal affairs operations at CDC because the legislation containing a reporting requirement was vetoed by the Governor. Nor has the Legislature, to our knowledge, received the summary data about the CDC unit mentioned by the Governor in his veto message.

Analyst's Recommendation. For these reasons, we recommend that the YACA Office of Inspector General be made the central, independent agency in charge of conducting internal affairs investigations of personnel employed by CDC, Youth Authority, and other YACA agencies, such as the Board of Prison Terms and the Prison Industry Authority.

In keeping with this reorganization of responsibilities, we recommend that $4.7 million and 76 positions proposed in the 1998-99 budget for CDC internal affairs operations, as well as $479,000 and seven positions provided for such duties at the Youth Authority, be transferred and added to the $1 million and 9.4 positions provided in the budget for the YACA Office of Inspector General. We also propose the enactment of legislation to conform the statutory mission of the Inspector General to this modified role.

Finally, we recommend that the Legislature adopt supplemental report language directing the YACA Office of Inspector General to provide the Legislature with the information it needs to assess the effectiveness and productivity of the internal affairs unit. The report would be due by December 1, 1998. We believe the reporting requirement would not be burdensome and is fiscally prudent, given the significant increases in staffing and funding sought by the administration for this activity.

Accordingly, we recommend adoption of the following language:

The Youth and Adult Correctional Agency Inspector General shall report to the Legislature by December 1, 1998, concerning its conduct of internal affairs investigations during the prior fiscal year including, but not limited to, the following information: the number of requests for investigations received by the Inspector General from each agency within its investigative jurisdiction; the number of investigations initiated by the Inspector General on his or her own authority; the total number of investigations pending; the total number of investigations referred to the California Department of Justice or any other state, federal, or local law enforcement agency; the number of investigations completed by the Inspector General overall, and for each agency within its investigative jurisdiction; and a summary of the results of the investigations it has completed, including the number of investigations resulting in criminal prosecution, the number resulting in disciplinary action against the subject of an investigation, and the number of investigations resulting in neither prosecution nor disciplinary actions.

The department now operates 33 institutions, including a central medical facility, a treatment center for narcotic addicts under civil commitment, and a substance abuse treatment facility for incarcerated felons. The CDC system also includes 11 reception centers to process newly committed prisoners, 12 community correctional facilities, 38 fire and conservation camps, the Richard A. McGee Correctional Training Center, 33 community reentry and restitution programs, 130 parole offices, and 4 outpatient psychiatric services clinics.

Total Expenditures. The budget proposes total expenditures of $4 billion for the CDC in 1998-99. This is $196 million, or 5.1 percent, above the revised estimate for current-year expenditures. The primary cause of this increase is the growth in the inmate population and the expansion of state prison facilities and staff. The Governor's budget proposal for 1998-99 provides for bringing a new state prison in Corcoran to its full capacity; the occupation of 1,200 new dormitory beds at Avenal State Prison; overcrowding of day rooms, gyms, and housing units at various existing prisons; and contracting with public or private vendors for another 5,480 community correctional facility beds. The CDC budget also includes $74 million to reflect the additional full-year cost of staff added during the current year.

General Fund Expenditures. Proposed General Fund expenditures for the budget year total $3.9 billion, an increase of about $262 million, or 7.2 percent, over the revised estimate for current-year General Fund expenditures. Thus, the General Fund contribution to the proposed budget would grow significantly more than the CDC budget overall.

Bond Reimbursements Declining. In prior years, bond funds that were no longer needed for completed prison construction projects comprised most of CDC's reimbursements. The bond funds were used to offset the ongoing payments provided in the budget to pay off lease-payment bonds. For 1998-99, bond reimbursements are budgeted at $71 million, a decline of $65.9 million, or 48 percent, below current-year expenditures. Because the state has nearly exhausted these surplus bond funds, the amount of reimbursements available is shrinking and larger General Fund appropriations to CDC are required to pay off these bonds.

Federal Funds. The Governor's budget assumes that the state will receive $286 million from the federal government during 1998-99 as partial reimbursement of CDC's cost (estimated to be $571 million in the budget year) of incarcerating and supervising felons on parole who are illegally in the United States and have committed crimes in California. The funds are not included in CDC's budget display, but instead are scheduled as "offsets" to total state General Fund expenditures.

Overview of the Inmate Population

Who Is in Prison?

• About 58 percent of inmates are incarcerated for nonviolent offenses (Figure 16).

• About 65 percent of all inmates were committed to prison from Southern California, with about 35 percent from Los Angeles County alone and 8 percent from San Diego County. The San Francisco Bay Area is the source of about 14 percent of prison commitments (Figure 17).

• More than 57 percent of all inmates are between 20 and 34 years of age, with the number of inmates falling dramatically starting by the early 40s (Figure 18).

• The prison population is divided relatively evenly among whites, blacks, and Hispanics (Figure 19).

• About 59 percent of the inmates are new admissions from the courts, 24 percent are offenders returned by the courts for a new offense while on parole status, and 16 percent are parolees returned to prison by administrative actions for violation of their conditions of parole (Figure 20).

Inmate and Parole Population Management Issues

Inmate Population Growth Continues

As of June 30, 1997, the CDC housed 152,506 inmates in prisons, fire and conservation camps, and community correctional facilities. Based on the fall 1997 population forecast prepared by the CDC, the Governor's budget assumes that the inmate count will reach 161,912 by June 30, 1998, and increase further to 171,610 by June 30, 1999. These figures represent an annual population increase of 6.2 percent in the current year and 6 percent in the budget year. As can be seen in Figure 21, this continues an upward trend in the prison population that has been evident since the early 1980s.

The budget also assumes that the population will increase further over the following four years, reaching 213,420 inmates by June 30, 2003. This represents an average annual population increase of about 5.8 percent over the six-year period from 1996-97 through 2002-03.

Change From Prior Projection. The fall 1997 projection has increased significantly from the prior CDC forecast (spring 1997) that was the basis for the 1997-98 Budget Act. The new fall 1997 forecast for June 30, 1998 is about 3,000 inmates higher than the spring forecast.

The differences between the spring 1997 and fall 1997 projections are somewhat larger in the long run. Under the earlier forecast, the inmate population would exceed 242,000 by June 2006. The fall 1997 projection is that the state prison system will have more than 247,000 inmates as of that same date. This upward revision amounts to enough additional inmates to fill an entire prison. We would note, however, that some changes in CDC forecasts are inevitable and the latest round of revisions are relatively small--about a 2 percent increase over a nine-year period.

We discuss the specific reasons for the changes in CDC's inmate population projections later in this analysis.

Parole Population Growth. As of June 30, 1997, the CDC supervised 100,828 persons on parole. The Governor's budget assumes that the parole population will be 106,503 as of June 30, 1998, and will increase to 111,426 by June 30, 1999. These figures assume a parole population increase of 5.6 percent in the current year and 4.6 percent in the budget year.

The budget also assumes that the population will increase further over the following four years, reaching a total of 127,912 parolees by June 30, 2003. This represents an average annual population increase of about 4 percent.

Why the Forecast Has Changed. According to the CDC, two main trends explain the higher projections in prison population.

• First, parole violators are being returned to state prison through an administrative process for violation of their conditions of parole more frequently than had previously been the case.
• Second, parolees who are being sent back to prison by the courts for new violations of law are serving somewhat longer sentences than anticipated.

The first trend is more significant than the second in terms of its effect on the number of offenders in the prison population. It is closely associated with several policy changes recently instituted by CDC and the Board of Prison Terms (BPT), which has the authority to suspend or revoke parole.

Specifically, the CDC significantly reduced parolee services such as substance-abuse counseling and short-term residential shelters so that it could spend more money to hire additional parole agents. The reductions in services meant that the BPT is more likely to send parole violators back to prison, in part because no alternative program placements are available.

Meanwhile, BPT established and began the enforcement of new regulations requiring CDC parole agents to report parolees with a serious crime on their record who failed testing for substance abuse. Reporting this specific group of offenders to the BPT previously was discretionary for parole officers, but now is mandatory. The end result is that a larger number of parolees were reported to BPT for these parole violations. The BPT then returned a large proportion of the parolees reported to them to prison.

We discuss these parole system issues in more detail in the Crosscutting Issues section earlier in this chapter.

Potential Risks to Accuracy of Projections. As we have indicated in past years, the accuracy of the department's projections depends on a number of significant factors. Among the factors that could cause population figures to vary from the projections are:

• Changes in sentencing laws and the criminal justice system adopted by the Legislature and the Governor or through the initiative process. Specifically, the latest CDC forecast does not take into account the longer prison terms that will be imposed on criminals convicted under the state's newly enacted "10-20-Life" sentencing law (Chapter 503, Statutes of 1997 [AB 4, Bordonaro]) because the measure was not enacted until September 1997. The CDC has estimated that the new law--which requires progressively longer prison terms in cases in which a felon was armed with a gun, discharged the gun in the commission of a crime, or harmed a victim with a gun--will add more than 5,000 inmates to the prison system within a decade of its passage.
• Changes in the operation of inmate education and work programsand prison rules affecting the credits inmates can earn to reduce their time in prison. For example, a measure pending on the June 1998 ballot would eliminate work credits for second degree murderers, potentially lengthening their prison stays.
• Changes in the local criminal justice system can affect the number of persons arrested, charged, tried, convicted, and ultimately admitted to prison. A continued trend of lower crime rates, especially for violent crimes, could cause growth in the inmate population to fall below the latest CDC projections.
• Changes in CDC and BPT policies and practices affecting the number of parolees returned to prison for parole violations. For example, the BPT is enacting regulations which would result in harsher punishment for parolees who violate their conditions of parole by associating with criminal street gangs, potentially increasing the number of violators returned to prison.

Significant further changes in any of these areas could easily result in a prison growth rate higher or lower than contained in CDC's projections.

Inmate Count Running Below Projections. At the time this analysis was prepared, the actual CDC inmate count had already varied significantly from CDC's fall 1997 projections. The CDC had overestimated the number of inmates who would be incarcerated as of late December 1997 (the mid-point of the 1997-98 fiscal year) by almost 1,700. Halfway through the fiscal year, the CDC also had underestimated the number of parolees being supervised on parole by about 370. We discuss the fiscal ramifications of these population trends later in this analysis.

Long-Term Impact on CDC Expenditures. We have estimated how the CDC budget is likely to grow between now and 2006-07 if, as under the current practice, both prison and parole caseloads were fully funded and no other significant policy changes were made in CDC programs. The result is that the CDC operations budget (excluding capital outlay and debt service costs) would reach almost $6.6 billion by the end of that period. Thus, the CDC budget (currently 7 percent of the General Fund budget) would grow at an average annual rate of about 8.7 percent, compared with an annual 5 percent to 6 percent growth in revenues that would occur for the state General Fund under a moderate economic growth outlook during that same ten-year period. In addition to these additional costs for the support of the prison system, accommodating these inmates in new state prisons would require one-time capital outlay costs of more than $3.2 billion for 13 prisons.

Projections to Be Updated by May

Using CDC's fall 1997 projections, the budget requests an increase of $116 million above the funding level provided in the 1997-98 Budget Actto accommodate the growth in the inmate and parole populations.

Projections Will Be Updated. As we indicated earlier, recent trends indicate that CDC's fall population projections have somewhat overestimated the number of inmates who are being incarcerated. As of late December 1997, the total CDC inmate population count was running about 1,700 below projections.

If the current trend holds, there would be a significant reduction in the amount requested to accommodate inmate population growth and a smaller, but still significant, increase to accommodate larger parole caseloads. Because it is more costly to house an inmate than to supervise a parolee, the net effect of these caseload changes is likely to be a significant reduction in CDC's funding request for the current and budget years. In this event, we would expect the reduction to be in the low tens of millions of dollars.

Analyst's Recommendation. For these reasons, we withhold recommendation on the request for $116 million above the funding level provided in the 1997-98 Budget Act to support the inmate and parole population pending receipt and review in May of CDC's revised estimates.

Inmate Housing Plan Calls for Contracts For Leased Facilities and More Overcrowding

Inmate Housing Plan for 1998-99. The Governor's budget includes an inmate housing plan to accommodate an additional 9,770 inmates, slightly more than the 9,698 additional inmates CDC expects to receive during 1998-99. The housing plan includes the following proposals:

• Fill New Prison. The CDC would complete the occupation of a new state prison and Substance Abuse Treatment Facility that is located adjacent to the existing facility located at Corcoran in Kings County. The facility, opened in August 1997, is expected to house 5,295 inmates by June 30, 1998. During 1998-99, the new prison would accept about 1,410 more inmates, bringing the total inmate population to 6,705 and making the new facility the largest in the entire state prison system.
• Activate Avenal Prison Dormitories. During 1998-99, CDC would activate 1,200 dormitory beds constructed for Level II (medium-security) inmates that were originally scheduled to open during the current year. Activation of the beds was postponed in response to an unallocated cut to the CDC budget.
• Private Community Correctional Facilities. The housing plan assumes that 480 additional inmates will be accommodated at 2,000 new community correctional facility beds operated by private vendors that opened in January 1998, and that a net gain of 25 beds will result from contracting with vendors for correctional reentry center beds.
• Overcrowding of Existing Prison Space. The housing plan assumes that an additional 6,655 inmates would be placed in gymnasiums, day rooms, and other locations at CDC institutions that are intended to be temporary.

Contract Beds Omitted From Housing Plan. The housing plan submitted by the CDC does not reflect an additional 2,000 beds for housing inmates that are funded in the 1998-99 budget proposal and are scheduled to be activated during the budget year.

The CDC plans to contract for 15,000 community correctional facility beds at publicly or privately built and operated prisons over several years for Level I (low-security) and Level II (medium-security) offenders. The budget proposal assumes that the first 2,000 of these new beds would be activated in June 1999.

Funding Should Be Adjusted. We anticipate that CDC will adjust its housing plan at the time of the May Revision to account for these 2,000 beds and to reflect any changes in inmate population trends.

Nonetheless, we believe the CDC budget should be reduced by $9 million to reflect the likelihood, as well as the desirability, that activation of the first 2,000 community correctional facility beds be delayed until 1999-00. This would result in no more than a one-month delay in the schedule for activation of these beds. We believe the funding reduction is justified for several reasons:

• The present CDC schedule for bringing additional community correctional facility beds on line appears ambitious, given that the most recent community correctional facility expansion faced repeated delays and took almost a year longer than initially planned.
• A delay of funding until 1999-00 will provide an opportunity to base the funding for new contract beds upon the actual per-diem rates bid by vendors rather than upon estimates. The CDC budget request assumes that vendors will be paid a basic rate of $44 per day per inmate, yet CDC recently acquired 2,000 beds at a rate of about $40 per day. Achieving the lower rate could eventually save the state $8 million per year. To ensure that these projects are not over-budgeted, and to avoid encouraging private vendors to increase their contract rates, it is in the state's interest to hold off on any allocation of funding for the contracts during 1998-99.
• Finally, assuming CDC's inmate population projections are correct, the 2,000 contract beds proposed to come on line in June 1999 will not be needed until sometime during 1999-00. As we noted previously, the CDC housing plan that was recently submitted to the Legislature does not include the contract beds, yet accommodates the projected prison population. The CDC plan accommodates the projected inmate population growth in June 1999 through over-

crowding of existing prison facilities. Thus, no shortage of housing will result if the beds are delayed for one month.

If the Legislature chooses to proceed with additional contract beds, authorization language proposed in the Budget Bill should be sufficient to allow CDC to do so.

Double-Budgeting of Beds for Women Inmates. The budget also includes $1.1 million to activate a new facility in Santa Fe Springs in Los Angeles County in December 1998 for pregnant and parenting women. The first of four such facilities authorized under Chapter 63, Statutes of 1994 (SB 519, Presley), it would provide substance abuse treatment and other services for 45 women offenders and also house as many as 30 of their children. However, as with the contract beds discussed above, these new beds are not included within the CDC's housing plan.

We believe the CDC budget can be further reduced to reflect double-budgeting for pregnant and parenting women. Specifically, the administration proposes to activate the new 45-bed facility for such women, but has not adjusted the budget downward to reflect the fact that these offenders would no longer be housed in regular prison beds. This adjustment would reduce the CDC budget by about $300,000.

Analyst's Recommendation. Because the inmate population is running below the fall 1997 projections of CDC, it is likely that the housing plan will change by the May Revision. Thus, we withhold recommendation on the plan at this time pending receipt of CDC's revised prison inmate population projections and the updated housing plan provided in the May Revision. We also recommend a $9.3 million reduction in the CDC budget to reflect a delay in activation of the proposed contract beds and duplicate budgeting for some women inmates.

Population Forecast Has Implications for the Long Term

Population Will Soon Exceed Available Prison Space. The administration's housing plan would accommodate the number of additional offenders projected to be sent to state prison during 1998-99. However, CDC projections indicate that the prison system will run out of space to house additional inmates early in the year 2000 if additional prison space is not made available by then. At that point, based on CDC projections, the inmate population would reach the capacity of the state prison system (two inmates per cell and double-bunking in dormitories and gymnasiums).

The Governor has proposed to address the shortage of inmate space by (1) building four additional state prisons housing 20,237 inmates, (2) building 1,900 high security administrative segregation beds on the grounds of existing prisons, and (3) contracting with public or private vendors for 15,000 beds in community correctional facilities.

As we discussed in our May 1997 report, Addressing the State's Long-Term Inmate Population Growth, we believe there is merit in adding to the capacity of the prison system through the construction and leasing of beds, but also recommend that the expansion of prison capacity be balanced with policy changes that reduce the inmate population growth rate. Options for slowing the growth rate include requiring certain nonviolent offenders to be punished at the local level, expanding certain programs aimed at reducing recidivism, and changing the time certain prisoners spend in prison. We discuss this issue in greater detail in the Capital Outlay chapter later in this Analysis (see Chapter H).

Court Intervention Could Make Housing Plan Obsolete. If new prison beds are not built or the shortage of prison space relieved in some other fashion by the time the state runs out of beds in the year 2000, CDC officials and others have predicted that the federal courts may intervene to cap the prison population at an unknown level, much the same way they have imposed population caps on many of California's county jail systems. If the federal courts were to intervene in this fashion, CDC's housing plan would immediately become obsolete because it is likely that the activation of overcrowding beds would not occur.

Substance Abuse Treatment Issues

Legislation Needed to Encourage Expansion of Civil Addict Program

Program Operating Since 1961. The Civil Addict Program provides substance abuse rehabilitation for persons who are identified by the court as narcotic addicts and who meet detailed criteria established in state law. In most cases, commitment to the program is in lieu of prosecution for a criminal offense. The program, which was established by the Legislature in 1961, accepts both male and female offenders.

As of early January 1998, CDC held about 2,700 civil addicts. About 1,600 male addicts and 500 female addicts are housed at the California Rehabilitation Center (CRC) at Norco, another 400 are at a community correctional facility at Adelanto, and the remainder (about 130) are scattered in small numbers among other state prisons. The CRC facility is not used exclusively for the Civil Addict Program: another 2,900 adult felons, primarily male offenders, are also housed there. The population of the Civil Addict Program has declined significantly since 1994, when CDC housed nearly 4,000 civil addicts.

As we discussed in last year's analysis of the CDC budget, the decline was largely related to the enactment of the "Three Strikes and You're Out" sentencing law, which precluded offenders with a serious offense on their record, such as residential burglary, from commitment to the Civil Addict Program.

Major Impact on State Costs. The decline in the program resulting from the Three Strikes law is significantly adding to state prison costs. That is because an offender sentenced under the Three Strikes law would typically stay in prison almost five times as long as an offender sent to prison as a civil addict. We estimate that longer prison time served by offenders who would otherwise be eligible for the Civil Addict Program will add tens of millions of dollars annually to state prison operation costs within five years. It would also eventually generate one-time capital outlay costs in the low hundreds of millions of dollars.

Legislative Actions. Last year, based upon information indicating that recent reforms in the Civil Addict Program had made it cost-effective, the Legislature took two steps intended to address the decline in the program caseload.

First, the Legislature adopted budget bill language directing the Judicial Council to inform all trial judges of the statutory provisions that call for the placement of eligible drug- and alcohol-addicted offenders in the program. The Judicial Council was to report on this effort to the Legisla- ture by December 1, 1997. At the time this analysis was prepared, the required report had not been received by the Legislature.

Second, the Legislature adopted supplemental report language directing CDC to report on the feasibility and cost of providing substance abuse treatment programming for all offenders housed at CRC, not just those assigned to the Civil Addict Program. That report was due February 1, 1998, and thus was pending as this analysis was prepared.

Further Improvements Possible. Other steps could be taken by the Legislature to bolster the number of offenders participating in the program.

The pool of program participants could be enlarged by restoring the system of credits that civil addicts used to be able to earn to reduce the time they must spend in confinement. An August 1995 California Supreme Court ruling struck down these credits, holding that a 1980 statute allowing them was overridden by a 1983 statute revising the credit system for all state prison inmates. In some cases, the absence of credits appears to be a deterrent to participation in the program: an offender might be faced with the possibility that, without the credits, he or she could spend longer in confinement under the Civil Addict Program than by serving a regular prison sentence. The budget committees of both houses of the Legislature voted last year to restore the credits, but the measure affecting the credits was not included in the final legislative package to enact the budget.

We have also concluded that judges would more frequently assign offenders to the Civil Addict Program if county probation officers advised them that an offender was eligible for such a commitment. Existing law and California court rules specify that probation officers shall provide sentencing reports to judges that examine, among other matters, the "habit of temperance" of offenders as well as their "record of substance abuse." Probation officers are already required to summarize the defendant's prior criminal record, which contains all the information needed to determine whether an offender with a substance abuse problem meets the legal criteria for the Civil Addict Program. However, probation officers are under no obligation to report on the eligibility of offenders for a Civil Addict Program commitment.

Analyst's Recommendation. For the reasons discussed above, and consistent with our recommendation from last year, we recommend the adoption of a statute restoring credits to civil addicts. To the extent that such a legal change prompts some offenders to agree to participate in the Civil Addict Program instead of accepting a regular prison sentence, the state could save on correctional costs. We also believe it is reasonable that civil addicts and felons incarcerated together at the CRC be treated alike in the allowance of credits.

We also recommend the enactment of legislation to require that county probation officer sentencing reports determine whether an offender is eligible for commitment to the program. This would impose a mandate upon local government that would be reimbursable by state government. We do not believe the mandate would be costly, however, because probation officers are already mandated by law to gather the information necessary for such determinations. We believe any costs would be outweighed by the state savings on incarceration that would result from commitment of offenders to the Civil Addict Program instead of longer prison terms. Placing more offenders in the program is also likely to reduce the incidence of crime committed by addicts upon their release from prison. Left untreated, these offenders would be more likely to continue to abuse illegal drugs and alcohol and return to a life of crime.

Redirect Drug Interdiction Funds To Expansion of Drug Treatment

Two Pilot Projects. The CDC budget includes $1.1 million and 15 positions to implement an experimental program to deter the infiltration of illegal drugs into state prisons. The budget proposes the creation of an internal Drug Reduction Task Force charged with overseeing pilot projects at two prisons, each of two years' duration, aimed at deterring the flow of illegal drugs into prison facilities. Canine units and electronic scanning equipment capable of detecting the presence of drugs would be established at the prisons. Inmates would be subjected to random drug testing, and prison visitors would be monitored with closed-circuit cameras in visiting rooms in an attempt to halt drug trafficking.

We agree that drug trafficking is prevalent at a number of correctional institutions. But we believe the proposal is flawed in several respects:

• Both canine units and electronic scanning devices have been tested for drug interdiction for several years at the CRC at Norco. Rather than conduct additional tests, CDC should evaluate the impact of

the test it has already conducted at CRC and report on its effectiveness in deterring drug trafficking at that facility.

• Although the proposal would subject inmates and prison visitors to tighter screening for illegal drugs, the proposal apparently does not subject prison staff to such screening. Prison officials acknowledge that contraband illegal drugs smuggled by some staff members is contributing significantly to the prison drug problem. Such screening and random drug testing of staff at the two selected prisons may not be possible without the agreement of employee groups, and is not included in the CDC drug interdiction proposal we have reviewed.
• Rather than experiment with other approaches, CDC has a scientifically validated in-prison treatment program at the prison in San Diego which significantly reduced the addiction of inmates as well as the rate of inmate recidivism. In our view, further expansion of such programs would be a more cost-effective strategy in curbing the prevalence of illegal drugs in prison and reducing inmate recidivism than an interdiction strategy.

Analyst's Recommendation. For these reasons, we recommend thedenial of a request for $1.1 million and 15 positions requested for the experimental projects, and the redirection of the funds to initiate the further expansion of in-prison substance abuse treatment programs using the proven substance abuse treatment approach.

We believe CDC already has adequate administrative resources to create an internal Drug Reduction Task Force that could evaluate the effectiveness of the ongoing efforts at CRC to interdict illegal drugs and recommend any necessary CDC policy changes to reduce drug trafficking on prison grounds.

Correctional Program Issues

Study of Inmate Academic and Work Programs Should Be Broadened

be funded entirely using surplus cash held by the Prison Industry Authority and not from the General Fund. (Reduce Item 5240-001-0001 by $500,000 and establish a new Item 5240-011-0678 in the same amount.)

Examination of Programs Sought. Of the 148,000 inmates held by CDC as of May 1997, about 82,000 participated in (1) academic and vocational education programs and (2) work programs including Prison Industry Authority (PIA), Joint Venture, and various work assignments within the prisons. However, with the exception of a study of the Joint Venture program commissioned by the Legislature, CDC has not examined what impact these programs have had on providing inmates with marketable job skills or reducing inmate recidivism rates. Since an average of 70 percent of inmates paroling from state prison return within a year of release with either a parole violation or a new court conviction, the effectiveness of CDC's programs has been unclear.

The CDC has requested $500,000 from the General Fund to begin a three-year statewide study to evaluate the effectiveness of CDC's academic education, vocational education, PIA, and Joint Venture programs. The study, to be conducted by an outside consultant, would interview parole agents, inmates, employers, and state agencies providing educational and job placement assistance.

LAO Concerns About the Study. Given the high recidivism rate of CDC parolees, we believe the proposed study is warranted but too limited in scope. In addition to conducting the interviews, we believe that the study should include a statistical analysis based upon a review of a random sample of inmate files that would examine whether participation by inmates in the current academic education, vocational education, and PIA programs has any impact on recidivism. A sample of files for similar inmates who did not participate in work or education programs would also be examined. We believe this information would complement the information collected through consultant interviews.

Broadening the scope of the study may add to its cost, but that evaluation would be a worthwhile state investment given that more than $180 million is proposed in the 1998-99 CDC budget for academic education, vocational education, and inmate employment. The proposed evaluation could provide CDC and the Legislature with the information needed to determine how particular education and work programs within the 33 state prisons could be reformed or, if warranted, abandoned.

The study also should be accomplished without additional General Fund resources. As of June 31, 1997, the PIA had $23.3 million in cash--an increase in cash of $12.5 million over the prior year--and long-term debt of about $1 million. In our view, using a small part of that cash reserve to fund the three-year study would have no impact on PIA operations. Using PIA funds would also be appropriate because the study would directly involve a review of PIA operations and also lead to improvements in academic and vocational education programs that often help prepare inmates for subsequent PIA assignments.

Analyst's Recommendation. For these reasons, we recommend that the scope of the study be expanded as we have proposed, and that the review of inmate programs be funded not from the General Fund but through the establishment of a new budget item transferring the necessary funds from the PIA. This recommendation would result in General Fund savings of $500,000. We recommend that CDC report at budget hearings on the likely cost of a more comprehensive examination of correctional academic and work programs. The budget item providing funding from the PIA surplus should be established initially at $500,000 and modified later to reflect the full cost of the broader study we recommend.

Correctional Administration Issues

Funding Sought for Administration and Other Operations. The proposed 1998-99 CDC budget includes funding relating to leased jail beds, local assistance, personnel supervision and training, auditing and accounting functions, information technology, and other administrative operations and issues.

Analyst's Recommendation. We withhold recommendation on various budget requests for which we have not yet received sufficient justification from CDC. We further recommend a reduction in other budget items requested by CDC, the adoption of specified budget bill language and statutory changes, and reports to the Legislature at budget hearings on specific topics as proposed below:

• Leased Jail Beds. We withhold recommendation on $26.7 million to continue to lease 1,400 beds primarily for parole violators at the Peter Pitchess Detention Center in Los Angeles County, pending a review of the first year's implementation of the contract. At the time this analysis was prepared, we had not received sufficient information from the CDC to support this expenditure request.
• Local Assistance. We withhold recommendation on $18.2 million requested to reimburse county governments for the cost of holding parolees who have been arrested or held in local jails for violation of their conditions of parole. At the time this analysis was prepared, we had not received sufficient information from the CDC to support this expenditure request. We also recommend that state law (Penal Code Section 4016.5) be amended to prohibit the practice by which Los Angeles County has billed the state as much as $755 per day to treat state inmates held in county jails in so-called "pill wards" in which parolees receive services such as medications or wheelchairs but no hospital or medical treatment. An audit by the State Controller provides evidence that the state is being billed millions of dollars annually for "pill ward" stays by parole violators.
• Academy Staffing. We withhold recommendation on the $15.4 million requested for academy operations because the number of cadets trained each year is closely related to growth in the inmate population. We recommend that the budget be appropriately adjusted at the time of the May Revision when CDC's spring 1998 projections of inmate population growth will be available and the number of cadets to be trained can be determined.
• Correctional Management Information System (CMIS) Project. We withhold recommendation regarding the $13.4 million sought to continue CMIS, a critical information technology project that commenced in 1992 to provide the department a computer-based system to maintain comprehensive information about offenders and to support related departmental activities. At the time this analysis was prepared, we had not received sufficient information from the CDC to support this expenditure request. Because of ongoing delays in the project and the cancellation of a contract last year with the project vendor, we recommend CDC report at budget hearings regarding the status of the litigation and any settlement talks, provide the Legislature with an updated timetable for advancement of the project, and account for how it is using the funds budgeted for the project during the current year.
• Proposed Labor Agreement. We recommend deletion of the $10.9 million to implement a proposed memorandum of understanding (MOU) between the state and the labor organization representing correctional officers and parole agents. For the provisions of the MOU to take legal effect, the proposed agreement must be approved in a bill passed by the Legislature and signed by the Governor. At the time this analysis was prepared, the proposed MOU had not been enacted into law. Without prejudice to the merits of the proposed MOU, we recommend the deletion of the funds from the budget. We believe the funding necessary to carry out the agreement could, and in this case should, be included in the legislation to ratify the MOU.
• Expansion of CDC Audits. The 1998-99 budget proposal includes a net increase of $301,000 and four positions to consolidate audits of CDC institutions within the Department of Finance (DOF). The budget also provides an additional $1.5 million and 23 positions, primarily for two units within CDC--one within the Administrative Services Division and the other within the CDC Office of Inspector General (OIG)--to conduct audits of the department's programs and vendors. We recommend approval of the DOF request. We recommend approval of the $1.5 million sought by CDC for additional auditing work, but also recommend that an $800,000 reduction be made to eliminate the OIG. This recommendation is contingent upon the adoption of budget bill language requiring a consolidation of CDC auditing operations within the Administrative Services Division and abolishing OIG. We recommend that OIG's existing functions be transferred to other CDC units and to the Youth and Adult Correctional Agency (YACA) Inspector General. We see no justification for CDC to continue operating two auditing units. Specifically, we recommend the following budget bill language:

The California Department of Corrections (CDC) shall reorganize its auditing activities into one consolidated auditing unit within the Administrative Services Division by January 1, 1999, and by that date shall also abolish the CDC Office of Inspector General and transfer its responsibilities to other CDC units or the Youth and Adult Correctional Agency Office of Inspector General by means to be determined by the Director of Corrections.

• Classification Unit Staffing. We withhold recommendation on the $1.2 million and 17 positions sought to expand the Classification Services Unit pending the completion by CDC of a report due May 1, 1998, on the development of a new model classification and reclassification system. We believe a decision on this funding request should be tied to continued progress by CDC in developing, testing, and implementing a new classification system that could

potentially result in significant state savings on prison operations and construction.

• Inmate Bus Costs Rising. The CDC budget requests two buses for the transportation of inmates costing $450,000 each. In 1995-96, the same buses were priced at about $300,000. At the time this analysis was prepared, we had not received sufficient information from the CDC to support this expenditure request. Thus, we withhold recommendation on the $900,000 request pending justification of the 50 percent cost increase.

Interim Steps Recommended to Reform State Parole System

In the Crosscutting Issues section of this chapter, we provide an analysis of the present parole system operated by CDC and BPT. We also recommend changes in the system of supervision, control, and sanction of parolees that we believe will lead to improved public safety, less prison overcrowding, and significant state savings.

In that analysis, we specifically recommend a series of changes to the CDC parole division budget, including:

• An augmentation of the CDC budget by $2.8 million to initiate the expansion of the Preventing Parolee Failure program or other parole services, and modification of formulas to incorporate additional funding for the program in future budget requests for increased parole caseloads.

• Deletion of $1.3 million requested for additional parole staff to process the paperwork for a growing workload of parole revocation cases.

• Establishment of separate items within the parole division budget for case supervision, casework services, Preventing Parolee Failure, Psychiatric Outpatient Clinics, and other specialized parole programs.

A detailed explanation of our proposals is provided in the Crosscutting Issues section of the Analysis.

CDC Required to Submit Reports on Major Correctional Policy Issues

Several Studies in Progress. The 1997-98 Budget Act and accompanying Supplemental Report of the 1997 Budget Act directed the CDC to submit several reports to the Legislature by specified dates. These reports may be relevant to the Legislature's review of the 1998-99 CDC budget. The required reports and their specified due dates are as follows:

• Prison Weights. The CDC was to report by December 1, 1997, on the inventory of exercise weights at each institution, and the weights removed from each institution since January 1, 1995. The CDC also is to report the reason that any weights remain in an institution, the department policy regarding the use of weights by inmates, and the purpose for the continuing presence of weights in the institutional setting.
• Civil Addict Program. The CDC is to report by February 1, 1998, regarding the feasibility of providing drug treatment programming to all civil addicts and felons incarcerated at the California Rehabilitation Center at Norco and, if this is deemed feasible, the staffing, funding, and timetable necessary to accomplish this change. We discuss this issue in more detail in our analysis of the Civil Addict Program (earlier in this analysis).
• Inmate Pay Telephones. The CDC is to report to the Legislature by February 1, 1998 regarding the cost-benefit and impact on prison security of expanding the access of inmates to pay telephones located at its institutions.
• Inmate Classification. The CDC is to report to the Legislature by May 1, 1998 regarding its progress in preparing to modify its inmate classification system. The CDC is to draft new model classification procedures, estimate how the new model would affect the distribution of inmates within the prison system, and develop a proposal to test how the new system would affect state costs and prison security.
• Standard Cost Items. The CDC is required to submit a preliminary report by January 1, 1998, and a final report by July 1, 1998, regarding its budgeting methods for standard cost items, including employee salary and benefit expenses, equipment, and other operating expenses. (The CDC anticipates that any revisions in its standard costing methods will be incorporated into its budget request for 1999-00.)
• Parole Staffing. The CDC is to report by March 1, 1998 on the appropriate level of staffing for its parole program, taking into account public safety needs, requirements specified in statute or regulation, and any collective bargaining agreements. We have been advised by CDC that the study was placed on hold because of unspecified budget reductions and will not be submitted to the Legislature until March 15, 2000.

We will review these reports upon their receipt from CDC and advise the Legislature at the time of budget hearings if the information provided in them warrants any further legislative action.

Medical Issues

Contract Medical Adjustment Not Needed

The budget requests $64 million from the General Fund for contract medical services for inmates in the budget year, which is an increase of $809,000, or about 1.3 percent, over the current-year amount. The additional funds would become part of the department's baseline budget.

These expenditures are for a variety of medical services provided by contractors, such as hospitals, medical specialists, and laboratories. The proposal would increase the per inmate cost for new inmates coming to prison in 1998-99. Specifically, the new inmate population would be budgeted at $524 per inmate for contract medical services, while the base inmate population would remain at the current $422 per inmate.

Savings Offset Costs. The Health Care Services Division (HCSD) uses contract clinical staff when it cannot fill authorized positions. For example, HCSD has almost 100 authorized psychiatrist positions for its institutions. However, on average, only 75 percent of these positions are filled. Thus, in order to meet the need for psychiatrists, HCSD uses contract psychiatrists. Under these circumstances, the division's contract medical expenditures increase, while it has savings due to vacancies in its authorized psychiatrist positions. In addition, HCSD has implemented a series of other cost-reducing programs, such as utilization review positions that save money by ensuring the lowest cost or only needed services are provided. The HCSD has reported savings from vacancies, and from its other initiatives in the current and recent years. We believe that these savings will continue and will be sufficient to cover increased contract medical expenditures.

For these reasons, we do not believe the request is justified and recommend that it be rejected. (Reduce Item 5240-001-0001 by $809,000.)

Mentally Ill Population Higher Than Expected

The department's HCSD budget request includes $3.3 million for changes in staffing in its mental health services delivery system. The bulk of the request is the addition of new staff to provide services to seriously mentally ill inmates. The department has found that more inmates are seriously mentally ill than originally assumed and has based its request on these new figures.

Prevalence of Mental Illness Among Inmates. The CDC has implemented systems at its reception centers to determine whether an inmate is mentally ill and whether that illness requires treatment. The department began its reception center program based on the assumption that 7.9 percent of new inmates would require mental health services as a consequence of screening. Based on actual data, the prevalence rate of serious mental illness in new admissions has averaged about 9 percent. The higher prevalence rate translates into an increase of approximately 14 percent over earlier projections when the system was implemented. As of June 1997, the CDC had 13,340 inmates who were diagnosed as seriously mentally ill.

The department provides mental health treatment through case management services to the majority of the inmates determined to be seriously mentally ill. Inmates in case management receive regular psychotropic and other medications and are under the supervision of psychiatric staff, yet remain in the regular inmate population, housed in living units with inmates who do not need mental health services. In June 1997, 10,149 inmates were receiving case management services.

Enhanced Outpatient Program Needs Double. The department provides mental health services to inmates with greater treatment needs, or who need a protective environment, through the Enhanced Outpatient Programs (EOPs). The EOPs generally are established as separate living units where inmates needing this level of care can be supervised, receive therapy and treatment, and remain segregated from the general population. These living units are not overcrowded at the same rate as the general population living units; the EOPs are 150 percent of capacity instead of 190 percent for the general prison population.

Data show that more inmates need EOPs than had originally been projected. The development of the EOPs was based on estimates of approximately 8 percent of seriously mentally ill inmate population needing these services. However, actual experience has shown that over 15 percent of the mentally ill population needs to be housed in EOPs, almost double the original CDC projections. In June 1997, there were 2,068 inmates housed in EOPs.

Conclusion. The HCSD's request for additional mental health staff is justified based on the actual prevalence of mental illness in the CDC inmate population and we recommend approval. Based on actual experience, more inmates are seriously mentally ill than had been originally projected, over 9 percent of the state's entire prison population.