YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2006-46

August 2006

The following findings were included in our audit of the Department of Corrections, Jefferson City Correctional Center.

The Jefferson City Correctional Center (JCCC) first opened in 1836 as the Missouri State Penitentiary (MSP), a maximum security facility.  In September 2004, the new JCCC facility was completed and all offenders were transferred.  The facility houses 2,000 male offenders in eight housing units.

Procedures to account for and dispose of  assets remaining at the MSP after the move to the JCCC was completed were not adequate.  The department�s Central Office (CO) did not physically verify assets picked up by and transferred to other facilities, and performed a mass disposition of any assets eventually remaining at the vacant MSP  from the fixed asset records without conducting a physical verification of the assets or proper review of the inventory records.  In addition, the JCCC staff transferred some assets from the MSP to the JCCC without completing the necessary transfer paperwork.  These conditions resulted in discrepancies in the state's fixed asset system and less accountability over assets. 

Several assets with a total cost of over $155,600 were purchased with restricted bond funds designated for construction and start-up costs for the JCCC facility, but were placed in service at correctional facilities other than the JCCC.  For example, a bus costing $110,000 was transferred to another facility in June 2005, and 21 ice machines costing a total of $35,112 were transferred to the CO and 5 other facilities.  In addition, the JCCC purchased several assets with state and bond funding which do not appear to be prudent expenditures, including a Stradivarius trumpet costing $1,600 and nineteen pieces of exercise equipment for use by employees and costing nearly $50,000.

Perpetual records are not maintained for inventory in the offender clothing distribution office or on the canteen floor unless the canteen items are high risk or high value items.  In addition, the results of monthly inventory counts are not compared to any records.  Reviews of soda inventory balances identified, that, on average, the canteen was short  294 cans of soda each month for thirteen months between March 2005 and March 2006. 

Furthermore, economic order quantities or reorder points are not calculated or utilized for clothing or canteen inventories. 

The JCCC maintains two bulk storage tanks which contain gasoline and diesel fuel for use in DOC vehicles and equipment.  Actual fuel usage data was not recorded on the monthly inventory reports from July 2003 through September 2004.  Instead the usage amounts appear to have been calculated to allow the report to indicate a zero variance.  In addition, monthly inventory reports did not contain ending tank readings for the nine months from October 2004 through June 2005.  Finally, monthly inventory reports for the diesel tank were not prepared at all until July 2005.

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