LAO 2005-06 Budget Analysis: General Government

Analysis of the 2005-06 Budget Bill

Legislative Analyst's Office
February 2005

Department of Corrections (5240)

The California Department of Corrections (CDC) is responsible for the incarceration, training, education, and care of adult felons and nonfelon narcotic addicts. It also supervises and treats parolees released to the community.

The department operates 32 institutions, including a central medical facility, a treatment center for narcotic addicts under civil commitment, and a substance abuse treatment facility for incarcerated felons. A new maximum-security institution is scheduled to open in spring 2005 at Delano ( Kern County ). The CDC system also operates 11 reception centers to process newly committed prisoners; 12 Community Correctional Facilities; 40 fire and conservation camps; the Richard A. McGee Correctional Training Center; 17 community reentry programs; 2 restitution centers; and 187 parole offices.

Budget Overview

Budget Proposal

The budget proposes total expenditures of $6.5 billion for CDC in 2005-06. This is $247 million, or about 4 percent, above the revised estimate for current-year expenditures. The primary causes of this increase are the activation of a new prison ( Delano ), salary increases, and inmate medical care.

General Fund Expenditures. Proposed General Fund expenditures for the budget year total $6.4 billion, an increase of $250 million, or 4.1 percent, above the revised current-year estimate.

Federal Fund Expenditures. The Governor's budget assumes that the state will receive about $78.5 million from the federal government during 2005-06 as partial reimbursement of CDC's costs (estimated to be more than $700 million in the budget year) for incarcerating inmates in prison who are illegally in the United States and have committed crimes in California. The federal funds are not included in CDC's budget display, but instead are scheduled as "offsets" to its total state General Fund expenditures.

Inmate and Parole Population Management Issues

Inmate Population Projected to Increase Slightly

The California Department of Corrections (CDC) is projecting the inmate population to increase slightly in the current and budget years. The CDC projects substantial declines in the parole population over this period. The ability to achieve these reductions is largely dependent on whether the department will be able to implement recent policy reforms or if it will continue to experience implementation delays.

Background. The budget acts adopted in both 2003 and 2004 included a series of program and policy reforms designed to reduce the inmate and parole populations, primarily through reduced parole revocations and increased discharges from parole. Each of these budgets assumed that the resulting population reductions would achieve hundreds of millions of dollars in savings for the state. However, ongoing delays implementing these reforms have resulted in populations higher than projected and savings much lower than budgeted. These delays have occurred for several reasons, including the slow development of new policies and procedures, difficulty contracting for treatment beds, and prolonged negotiations with state employee unions. For example, the department has not implemented new policies and procedures regarding the discharge of parolees who have served 12 consecutive months on parole without revocation. Therefore, the current population projections include revised estimates to reflect the reduced impact of these reforms on the inmate and parole populations in the current and budget years.

Inmate Population Increase. As of June 30, 2004, the CDC housed 163,500 inmates in prisons, fire and conservation camps, and community correctional facilities. The CDC projects the inmate population to increase to 164,080 by June 30, 2006, an increase of 580 inmates, or less than 1 percent compared to the beginning of the current year. The projected increase in the inmate population is primarily the result of a recent trend of moderately increasing admissions to prison from county courts, partially offset by recent policy reforms designed to reduce the number of parolees who return to prison. In the absence of these reforms, CDC projects that the inmate population would have increased by about 2,300 inmates by the end of the budget year. Figure 1 shows the year-end inmate and parole populations for the period 1994 through 2006.

Parole Population Decrease. As of June 30, 2004, the CDC supervised 112,685 persons on parole. As shown in Figure 1, the CDC projects the parolee population to decrease to 94,897 by the end of the budget year, a decrease of 17,788, or 16 percent. This decrease is primarily a result of the policy reforms designed to increase the number of parolees discharged from parole supervision. In the absence of these reforms, the CDC projects that the parole population would have decreased by roughly 2,700 by June 30, 2006.

Implications of Population Changes. The CDC projects that recent policy reforms will reduce the inmate and parole populations compared to what would have happened in the absence of these reforms. However, these declines are significantly less than was assumed in the 2004-05 Budget Act. As a result, the Governor's proposed budget projects a current-year deficiency of $208 million, of which $201 million is for the higher than projected inmate and parole populations. In addition, the inability of the department to achieve the projected population reductions means that institutions will continue to experience significant prison overcrowding, even with the opening of a new prison in Kern County.

Potential Risks to Accuracy of Projections. As we have indicated in past years, the accuracy of the department's latest projections remains dependent upon a number of factors, changes to any of which could result in significantly higher or lower populations. These factors include sentencing law, crime rates, and local criminal justice practices. In particular, the ability of the department to implement recent policy reforms in a timely manner will determine whether any significant population reductions, as well as the resultant budget savings, will be achieved.

Caseload May Require Further Adjustment

We withhold recommendation on the 2005-06 budget request for caseload funding. Ongoing delays in implementing policy reforms included in the 2004-05 Budget Act raise concerns about the ability of the department to achieve projected reductions. We will continue to monitor the caseload and recommend further changes, if necessary, following review of the May Revision.

Due to delays in implementing current-year policy reforms designed to reduce the inmate and parole populations, the department may not achieve the full current- and budget-year population reductions assumed in the Governor's budget. The CDC will issue updated population projections in spring 2005 that form the basis of its May Revision proposal. At that time, we will review whether adjustments to CDC's funding for inmate and parole caseloads are warranted.

Analyst's Recommendation. We withhold recommendation on the 2005-06 caseload funding request. We will continue to monitor CDC population, and make recommendations as appropriate at the time of the May Revision.

Disciplinary Confinement Practices At CDC Need Improvement

The California Department of Corrections has established several disciplinary confinement options for inmates who commit violent and other serious offenses while in prison. We make several recommendations to improve the department's current inmate disciplinary practices which, if adopted, would result in General Fund savings without jeopardizing staff or inmate safety.


Inmate Violence and Other Serious Offenses

The state's 165,000 prison inmates commit thousands of rule violations every year. Some of those violations include more serious and violent offenses, which CDC refers to as inmate incidents. These incidents include a variety of offenses, such as assault, possession of a weapon, and drug offenses. According to CDC, the total number and rate of inmate incidents rose significantly between 1993 and 2003. Offenses reported by department staff doubled during that period, to over 12,000 in 2003. Part of this increase reflects changes the department made to its reporting requirements in 1997. However, even after implementing the reporting change, the number of offenses increased an additional 23 percent between 1997 and 2003. Further, the rate of inmate offenses has shown a similar upward trend since 1993 and has risen by about 18 percent since 1997. Figure 2 shows the increase in both the total number and the rate of incidents from 1993 through 2003.

Not only have overall inmate offenses risen in recent years, there is evidence that the amount of violent offenses in California prisons exceeds that in other states. According to the most recent data available, prisons in California have nearly twice the number of assaults as in Texas and almost three times the number as in federal prisons—both systems which have roughly the same number of inmates as California. Some of the difference in the amount of reported assaults among the three prison systems may be attributable to varying definitions of what inmate actions constitute an assault. Figure 3 shows the prison population of the five largest prison systems in the United States in 2003 and the number and rate of assaults in each state in 2000 (the most recent data available).

Figure 3

Assaults in California Surpass Other Large
Correctional Systems


Prison Population (2003)

Inmate Assaults


Per 100 Inmates

















New York




   Sources: Bureau of Justice Statistics and Criminal Justice Institute, Inc.

Why Prison Violence Matters

Safety and Security. One of CDC's primary missions is to provide for the safe and secure housing of inmates. While not all violence can be avoided or prevented, the prevalence of violence in California prisons raises questions about the safety of the working environment for state employees and the safety of the living environment for those inmates who are victims of violence.

Fiscal Effects. The level of prison violence in state institutions raises not only safety concerns, but also has significant fiscal consequences. When violence occurs, participants and victims often require expensive medical attention. The CDC reports that approximately 1,700 staff health and workers' compensation claims were filed for injuries resulting from inmate violence over the past three fiscal years. These claims have cost the department about $8.5 million over the period. In addition, while CDC does not track the number of injuries to inmates resulting from prison violence, treating these injuries likely costs the state several millions of dollars each year.

Violence can also lead to lawsuits against the department for failure to adequately protect inmates. In fact, CDC reports that approximately 350 such lawsuits have been filed by inmates since July 2000. The department has paid inmate claimants approximately $4 million for 24 of those cases that have so far reached resolution. Finally, as described below, participation in violent and serious incidents results in the placement of some inmates in high-security housing which costs more than $400 million annually.

Types of Disciplinary Confinement in CDC

The CDC has various responses it uses for inmates who commit disciplinary offenses. While some of these responses include nonconfinement penalties (for example, a loss of work credits), we focus on the department's use of disciplinary confinement. Disciplinary confinement includes different types of specialized inmate housing designed to remove offenders from the general inmate population and limit their ability to commit further offenses. We focus on disciplinary confinement because its use requires significantly more resources than general population beds. In particular, these high-security housing options are expensive because they frequently require higher custody staffing levels, overtime, single-celling of inmates, and administrative workload. We estimate that CDC spends more than $400 million each year on disciplinary confinement. Each of these disciplinary confinement alternatives is described below.

Disciplinary Confinement Practice Shortcomings

The California Department of Corrections is spending significant resources for disciplinary confinement, yet the department is unable to provide evidence that its current policies and procedures are effective at reducing prison violence and result in the most efficient use of General Fund dollars.

No Evidence that CDC's Methods Reduce Prison Violence

The CDC is unable to provide evidence that its current use of disciplinary confinement is effective at reducing prison violence. The department correctly points out that removing dangerous offenders from the general population limits the ability of those offenders to commit further offenses, including violent offenses. However, the limited data available suggests that CDC continues to have significant difficulty controlling violence in prisons. As we noted above, serious inmate incidents have increased significantly in recent years, and inmate violence appears to be far more prevalent in California than in other large penal systems. The level of violence in the prison system may be explained, in part, by the department's disciplinary confinement policies and practices, as discussed below.

CDC Does Not Utilize Risk Assessment for Inmates

The department classifies inmates by security level to determine, for example, whether an inmate should be placed in maximum or medium security housing. However, CDC does not do a risk assessment of inmates to identify which inmates within each institution are most likely to engage in in-prison violence based on factors associated with such behavior. These factors could include, for example, the pattern of past incidents in prison and personality characteristics, such as aggression. Other penal systems—such as Missouri , Washington, and some federal prisons—use formal risk assessment tools (also referred to as internal classification) to make population management decisions. For example, these tools allow prison staff to separate aggressive inmates from those most likely to be victimized.

Though evaluation research is limited, there is promising data that this approach is associated with reduced inmate misconduct, including fewer assaults on staff and other inmates. Because the department does not use risk assessment, it has no systematic way to target its supervision and program resources to those inmates most likely to pose behavioral problems. As a result, the department does not prevent some predictable violence from occurring. This, in turn, drives a higher need for disciplinary confinement than otherwise would be necessary.

Disciplinary Confinement Policies Do Not Target Most Dangerous Inmates

Disciplinary confinement is certainly necessary for some inmate offenders. However, because housing inmates in ASUs, SHUs, and lockdowns is more expensive than placing them in general population beds, it is important that CDC be selective in choosing which inmates to place in disciplinary confinement. In other words, it is important to be sure that the inmates in disciplinary confinement who are driving state costs are really the ones who most require the additional security and staffing that disciplinary confinement provides. Yet, in many cases CDC policies do not prioritize which inmates it places in disciplinary confinement, namely those who are chronic or violent offenders, resulting in the inefficient use of state resources. We identify several examples of the inefficient use of disciplinary confinement below:

CDC Provides Few Transition Programs

The CDC offers few programs for inmates designed to address the issues that led to their placement in disciplinary confinement and prepare them for reintegration into the general population. Instead, almost all inmates in ASUs, SHUs, and lockdowns are released from disciplinary confinement based on the decision of prison administrators or at the conclusion of a determinate SHU term.

As discussed later in this chapter, there is evidence that transition programs—focusing on such issues as life skills, anger management, substance abuse, or gang participation—reduce the likelihood that inmate participants will commit subsequent incidents in prisons and return to disciplinary confinement. Because CDC provides few such programs, some problem inmates are likely to reoffend when back in the general population because the underlying issues that led to their placement in disciplinary confinement have not been addressed. This increased likelihood of re-offending, therefore, results in some of these inmates returning to disciplinary confinement. It is also worth noting that some inmates are released from disciplinary confinement directly to parole. The fact that these new parolees also have not taken part in any transition programs could mean that some are at an increased risk to reoffend in the community.

One program that CDC does offer is the Transitional Housing Unit (THU) program. This is a 14-week transition program for gang dropouts in SHU to prepare them for reintegration into the general population. Program outcomes for the THU demonstrate some success, with only 2 percent of program completers returning to SHU. However, this program is limited in its use to Pelican Bay State Prison, and only 20 of the 1,400 prison gang members in SHUs can participate at one time.


In order to improve the disciplinary confinement process, we recommend that the California Department of Corrections (CDC) use its security expertise to develop uniform disciplinary confinement policies designed to target the most violent and chronic inmate offenders, adopt alternative and less expensive approaches to disciplinary confinement, and pilot test inmate risk assessment and transition programs. We believe these recommendations will allow CDC to be more systematic in its approach to prison violence and disciplinary confinement. Implementation of these recommendations would result in savings to the state through reduced and/or more efficient use of expensive disciplinary confinement beds, as well as a reduction in prison violence and other serious incidents, thereby improving staff and inmate safety.

Develop Standard Policies Designed to Target Worst Inmates

We recommend the adoption of trailer bill language requiring CDC to develop uniform prison policies designating the circumstances and procedures for placing inmates in and removing them from disciplinary confinement. These policies and procedures should be designed to reduce violence and serious incidents in prison by targeting violent and chronic inmate offenders for removal from the general population. The trailer bill should require CDC to:

By changing its placement policies and procedures, the department will be better able to prioritize which inmates it places in disciplinary confinement. In so doing, CDC will ensure that it is the most dangerous inmates who are removed from the general population and placed in more restrictive and more expensive states of confinement. As a result, the department should experience lower prison operating costs through reduced use of expensive disciplinary confinement, as well as medical, workers' compensation, and other costs associated with inmate offenses and violence.

Assess Options to Achieve Budget Year Savings

The prior recommendation addressed longer term approaches to CDC's confinement policies which would result in savings but not for a couple of years in the future. However, we believe that some steps can be taken to realize savings in the budget year. Accordingly, we recommend that the Legislature require CDC to submit a report prior to budget hearings regarding the feasibility of implementing specified options designed to reduce the population of inmates held in disciplinary confinement, thereby achieving budget-year savings. In particular, the department should report on the feasibility of each of the following options as well as the amount of savings likely to be achieved. We estimate that the options discussed below would result in budget-year savings of approximately $10 million annually depending on the number of inmates who are moved from disciplinary confinement to the general population.

Confined to Quarters. Prison administrators have the option of confining inmates who have committed rule violations to their cells, known as Confined to Quarters (CTQ). Prison administrators rarely utilize this option, instead relying more heavily on ASUs which is generally considered a more secure placement than CTQ. However, given the much lesser cost of keeping inmates in their own cell as compared to ASUs, the department should determine if there are certain cases—for example, nonviolent offenders—where CTQ would be a more cost-effective housing option than ASU while still providing a reasonable level of security.

Establish More Sensitive Needs Yards (SNYs). Currently, some California prisons have housing units called SNYs for inmates who might be targeted or victimized by other inmates—such as notorious inmates, sex offenders, and those who owe debts to other inmates. Often, the department houses these inmates in ASUs until there is an SNY bed available. According to department officials, this placement can take months because of the limited number of SNY beds available. The department should determine how many SNY-eligible inmates it has in its population to decide whether it has a sufficient number of SNY beds. To the extent that there is a deficiency in the number of SNY beds given the eligible population, the department should consider converting some general population housing units to SNYs. State savings would then be generated by transferring certain inmates from ASUs to SNYs because the department staffs SNYs like general population facilities—a lower staffing level than ASUs.

Expand and Modify THU Program. The department currently operates the THU program for gang dropouts at Pelican Bay State Prison. Based on CDC statistics, inmates who complete this program are typically successful in their transition out of SHU, usually to SNYs. This success, as well as the small size of the current program, suggests that there may be an opportunity to expand this program either at Pelican Bay or at the three other prisons with SHUs, thereby allowing the department to safely reduce its SHU population. However, the feasibility of expansion may rest largely on two factors. First, the department must ensure that there are sufficient SNY beds available to accept an increase in demand from inmates transitioned out of the THU program.

Second, the department should reevaluate its current requirements for verifying gang dropouts. Currently, the department requires all validated gang members who are dropping out to provide information to the department regarding the names and activities of other gang members in order to leave SHU. While this information is valuable to gang investigators and helps to ensure that gang dropouts are sincere in their desires, a fear of reprisal limits the number of inmates who are willing to go through this process. Prison officials in some other states that offer gang transition programs report that they do not have this same requirement. Instead, they closely monitor inmate behavior while in the program and after release to the general population. These officials report that this approach has increased inmate willingness to participate in the program, allowed these inmates to be released to the general population rather than SNYs, and still resulted in a reduced reoffense rate by inmate participants.

Expansion of the THU program would require some costs to increase program staffing. However, these costs would be more than offset by reduced correctional staffing compared to SHU.

Reduce the Number of Inmates in ASU Awaiting Criminal Proceedings. Some institutions house inmates accused of criminal offenses in ASUs until all investigative and court proceedings are concluded, a process that can take months and, in some cases, more than a year. Anecdotal evidence suggests that this practice may be common and used regardless of the severity of the incident. Prison administrators cite the need to keep inmate suspects from tampering with evidence as the reason for this practice. However, neither department regulations nor the district attorneys with whom we spoke require that inmates be kept in ASUs during the criminal court process.

The department should identify opportunities to reduce the number of inmates held in ASUs while awaiting criminal proceedings. Options for the department to consider include expediting the investigations and case referral processes, as well as establishing criteria to better prioritize which inmates accused of crimes need to be confined to ASUs versus alternative placements such as CTQ or even retention in the general population.

Develop Programs Designed to Reduce Serious Inmate Offenses

We recommend that the Legislature consider using a share of any savings achieved by implementing the changes identified above to create two pilot programs designed to reduce inmate violence. If implemented in California prisons, these programs could make prisons safer and more secure, as well as generate significant long-term savings through lower costs associated with violence and a reduced reliance on disciplinary confinement. Ultimately, should these programs prove to be successful as pilots, the Legislature could consider expanding them to additional facilities at some future date. Each of these recommended programs is described below.

Implement Pilot Risk Assessment Program. The department currently does not identify which inmates are most likely to be violent in prison. This deficiency limits the ability of the department to manage its population in such a way as to prevent violent incidents, thereby resulting in increased reliance on disciplinary confinement. Other states that have used risk assessment tools in prison have experienced reductions in the number of inmate assaults and other incidents, and increased staff and inmate safety. Based on these promising results, we recommend that the Legislature adopt budget bill language requiring CDC to implement on a pilot basis a risk assessment tool in a few of its institutions, and to use this information to better manage its population to prevent violent incidents. The costs to implement this program in a few prisons would likely not exceed $1 million in order to cover the program's staffing, as well as administrative and evaluation costs.

Develop Pilot Transition Program. As we indicated earlier, almost all inmates (with the exception of a small number of gang dropouts served by the THU program) are released from SHUs without having been provided transition services that address their reasons for being placed in disciplinary confinement or prepare them for reintegration into the general population. Several states, including Florida , Colorado , and Connecticut have developed such transition programs. These programs are for those states' most violent and chronic offenders housed in supermax settings. Evaluations of these programs demonstrate that inmate participants spend shorter periods in disciplinary confinement, and are less likely than non-participants to commit new prison offenses and return to disciplinary confinement.

An effective transition program modeled on these states would be divided into phases, each having its own specified security level and program privileges and restrictions. In addition, inmates would participate in a curriculum designed to address the causes of chronic disciplinary problems and prepare them for successful transition back to the general population, including such services as individual and group therapy and sessions on anger management, communication, and decision making. Inmates would progress from one phase to the next based on program participation and their ability to stay disciplinary free.

While implementation and staffing costs for a pilot program targeting 100 inmates serving determinate SHU terms could be as much as a couple million dollars, long-term savings would be generated in three ways and could be enough to fully offset program costs. First, the program should result in shorter SHU stays, particularly if focused on those currently committed to SHU sentences of a year or more. Second, an effective transition program would also result in a reduction in re-offenses committed by participants and, hence, fewer recommitments to ASUs and SHUs, as well as fewer staff and inmate injuries requiring medical attention. Third, advanced phases in the transition program should use double-celling of inmates, thereby more efficiently utilizing SHU capacity.


We found that CDC is spending significant resources for disciplinary confinement, yet there is evidence that the department's current practices are not well targeted towards the goals of reducing prison violence and the efficient use of General Fund dollars. In order to improve the use of disciplinary confinement, we recommend several approaches which would result in savings to the state through reduced and more efficient use of expensive disciplinary confinement beds, as well as a reduction in prison violence and other serious incidents.

Correctional Administration

Various Proposals Need Modification

We recommend a reduction of $44 million requested in the Department of Corrections' budget for various costs that have not been justified. We also recommend that the department report to the Legislature regarding the unbudgeted activation of a community facility and camps. (Reduce Item 5240-001-0001 by $44 million.)

The proposed 2005-06 CDC budget includes funding related to salary savings adjustments, price increases, employee discipline, post relief (filling vacancies when staff take leave), the establishment of inmate beds at a state mental health facility, and population adjustments. Based on our review, we recommend reductions for these proposals that we have found are not justified, and offer other recommendations as outlined below.

CDC Overutilizes Custody Employees in Headquarters

The California Department of Corrections (CDC) utilizes custody employees in headquarters positions that do not require peace officer status or involve custodial duties. In order to more efficiently staff CDC headquarters, we recommend that the Legislature reduce CDC's budget by $1.3 million through a reduction in the number of headquarters positions filled with custody employees. These custody employees should be redirected to field positions. In addition, we recommend adoption of supplemental report language requiring the department to report on its progress implementing this recommendation. (Reduce Item 5240-001-0001 by $1.3 million.)

The CDC has approximately 3,200 positions assigned to its headquarters in Sacramento and regional administrative offices throughout the state. These positions are filled by a combination of staff with peace officer classifications—including, correctional officers, higher-ranking custody staff, and parole agents—as well as non-peace officer employees.

Based on discussions with the department, most headquarters positions are involved in the oversight, planning, or coordination of activities in CDC prisons and parole units. The duties of these positions are primarily administrative and analytical—not custodial—and involve tasks such as generating and reviewing reports, developing policies, coordinating activities in the field, and managing the department's budget.

According to information from the State Controller's Office, 880 of the total headquarters and regional office positions are filled with peace officer personnel, as shown in Figure 4. Of these, a couple hundred are actually field assignments that report to headquarters for administrative reasons, such as correctional officers who transport inmates among institutions. Based on information provided by the department, we estimate that approximately 600, about 20 percent, of actual headquarters positions are filled with custody employees performing administrative duties. By comparison, some other states with large penal systems report much lower usage of peace officers in their headquarters. For example, officials from Florida and Texas report that less than 5 percent of their headquarters is staffed with peace officers.

Figure 4

Peace Officer Positions in CDC Headquarters
And Regional Offices

As of January 2005


Total Positions

Peace Officer Positions

Percent Peace Officer Positions





Regional offices








   Source: State Controller's Office.

The administration has proposed the reorganization of the Youth and Adult Correctional Agency (YACA) and is already moving forward with a consolidation of the administrative offices of YACA departments, the largest of which is CDC. As part of this reorganization, the agency has stated its intent to improve efficiency. In light of these proposed changes, we suggest that now would be an appropriate time for the department to reconsider which staff are assigned to administrative positions at headquarters and regional offices.

Current Practice Is Inefficient

Mismatch of Custodial Skills and Administrative Duties. The department has chosen to fill about 600 headquarters administrative positions with custody personnel, a decision that results in inefficiencies in headquarters, as well as in the field. The department has pointed out that using custody personnel in headquarters can be beneficial because these staff have field experience that can be useful when developing policies or reviewing field activities. We agree that field expertise is beneficial for some headquarters positions. However, based on our review of duty statements, field experience is not the primary skill necessary for many of the positions currently filled with peace officer employees. Some examples of custody employees doing primarily administrative or analytical work include parole agents working as administrative assistants, correctional captains conducting audits, lieutenants reviewing budget proposals, and correctional counselors doing policy and legal analysis.

Custody staff in CDC are specifically trained to supervise inmates and parolees. Accordingly, relying on peace officers in headquarters does not allow the department to use its peace officers to their fullest capacity in the field where their training and skills can be most utilized. We note that the state has a number of noncustody classifications with education and training requirements better suited to headquarters duties and responsibilities. These classifications include auditors and program analysts, for example.

Current Practices Drive Excess Costs. The state compensates employees with peace officer classifications at higher levels than non-peace officers because of their specialized training and the inherent danger of their work. As a result, peace officers are typically more expensive personnel to use than the administrative or analytical classifications widely used in other state departments to perform similar duties. For example, the annual state cost for a correctional sergeant is about $95,000, while the cost for an associate government program analyst is $75,000. Therefore, in many cases, the state spends tens of thousands of dollars more for each CDC position that is filled with a custody employee instead of a classification with administrative or analytical training and skills.

Moreover, using custody employees in headquarters contributes to a persistent vacancy problem in CDC institutions, thereby resulting in costly overtime expenditures. Many peace officer positions in the field are required to be filled at all times, yet the department has difficulty filling many of these positions which results in vacancies. When these vacancies occur, the department must pay overtime to cover those posts. For example, the 500 correctional sergeant and lieutenant positions vacant in institutions contributed to $45 million in overtime costs for those classifications in 2004. We recognize that the number of peace officer positions at headquarters is small compared to the number of peace officers in the field. Nonetheless, if there were fewer peace officers at headquarters, this would likely reduce the number of vacant positions in the field as well as the associated costs.

LAO Recommendations

Reduce CDC Funding to Achieve Savings. Based on our review of CDC's administrative positions, we believe that the department could reasonably reduce its percentage of peace officer positions in headquarters and regional offices by at least 3 percent. This level of reduction would be achieved through the reclassification of 100 peace officer positions to noncustody positions. Moreover, the reclassification of 100 positions would result in about $1.3 million in savings in the budget year if implemented by January 1, 2006. Partial-year savings are assumed to allow the department sufficient time to identify the appropriate positions and negotiate with the affected employee unions. These savings would grow to approximately $2.5 million on an annual basis beginning in 2006-07. The department could also achieve these savings by eliminating some positions, or through a combination of reclassification and elimination of positions.

Further, we have purposefully recommended a target reduction amount for the department rather than identifying specific positions to be reclassified or eliminated. We have taken this approach because we believe the department is in the best position to determine in which administrative units it most needs field expertise versus administrative or analytical skills. Whatever approach is chosen by the department, CDC should transfer the affected correctional personnel to field positions in the institutions and parole offices. This would enable the department to make better use of the skills of these employees, as well as fill critical vacancies in the field to reduce overtime costs. The department may incur some relocation costs to transfer these employees. However, we believe these costs, if any, would be minor and absorbable because of the small number of employees involved and the close proximity of several prisons to CDC headquarters.

Fill Future Vacated Positions With Noncustody Personnel. In addition, the department should develop a policy that as headquarters positions become vacant in the future, the department will use noncustody staff in those positions and only use custody staff when the majority of work duties clearly require peace officer status or field experience. We recommend that the Legislature adopt supplemental report language requiring the department to report by January 1, 2006 regarding both the position changes made to achieve savings of $1.3 million in 2005-06, as well as the steps taken to ensure that positions that are vacated in the future are filled with noncustody classifications whenever possible. The following language is consistent with this recommendation:

Item 5240-001-0001—California Department of Corrections. The California Department of Corrections shall submit a report to the Legislature on or before January 1, 2006 on the conversion of peace officer positions in headquarters and regional offices to non-peace officer positions, consistent with the recommendations of the Legislative Analyst's Office and the Analysis of the 2005-06 Budget Bill. The report shall include the following: (1) a list of the positions in headquarters and regional offices that were reclassified or eliminated; (2) an estimate of the budget impact of these reclassifications and eliminations; and (3) the department's plan for ensuring that future position vacancies are filled with non-peace officer classifications whenever possible.

Our recommendations would improve the overall effectiveness of CDC headquarters by more closely matching employee skills and training with the primary duties or functions of headquarters. In addition, these steps will result in cost savings by using less expensive classifications in headquarters and relying less on overtime in the prisons.

Correctional Medical Care

Inmate Medical Proposal Consistent With Court Order

The Governor's budget requests funds to comply with a September 2004 court order stemming from the Plata v. Davis settlement agreement reached in 2001. In this piece, we (1) provide background information on the Plata v. Davis lawsuit and settlement agreement, as well as the recent court order, (2) discuss our assessment of the budget request, as well as issues for legislative oversight, and (3) recommend specific reductions totaling approximately $3 million. (Reduce Item 5240-001-0001 by $3 million.)


Plata v. Davis Settlement Agreement. In April 2001, Plata v. Davis was filed in federal court contending that CDC was in violation of the Eighth and Fourteenth amendments of the United States Constitution by providing inadequate medical care to prison inmates. Some specific examples of key issues raised in the case include (1) the lack of nationally recognized medical guidelines for managing inmates with chronic illnesses, (2) inappropriate and inconsistent medical follow-up visits, (3) inadequate number of registered nurses, and (4) poor coordination between medical and custody staff.

In January 2002, the state entered into a settlement agreement, committing to significant changes in the delivery of health care services to inmates. Generally, the settlement agreement focuses on improving inmate access to health care, as well as the quality of health care services provided in the prisons. Under the agreement, independent court-appointed medical experts monitor the implementation of the agreement, and periodically report to the court on the state's progress in complying with the agreement.

Previous Legislative Action. In response to the Plata settlement agreement, the Legislature—as part of the 2002-03 Budget Act—approved a multi-year plan authorizing nearly 1,400 health related positions to be phased in over a six-year period at a cost of approximately $90 million annually when fully implemented. Under the proposal, policy changes and health staff were to be phased in at five to eight prisons per year beginning in 2002-03 and ending in 2007-08. Figure 5 shows the funding and positions.

Figure 5

Plata Positions and Funding

2002-03 Through 2007-08
(Dollars in Thousands)




Fiscal Year
































  Total Cost for Six Years



Generally, the resources provided in the 2002-03 Budget Act are being used to achieve two objectives. The first objective is to establish a management structure at headquarters to oversee the inmate health care delivery system and implement the Plata requirements. In order to do this, teams of health care professionals—called Quality Medical Assistance Teams (QMATs)—are deployed from headquarters to each institution in order to implement new clinical policies and procedures, and train prison staff on those changes. The second objective is to increase inmate access to health care by providing more staff to work in prison clinics and hospitals (medical technical assistants, nurses, and records technicians), and more security staff to manage medical escorts (associate wardens, facility captains, and correctional officers).

How the State Reaches Full Compliance. Under the Plata settlement agreement, all 33 prisons must be in "substantial compliance" before the state is released from the settlement agreement. A prison is determined to be in substantial compliance when it meets a number of conditions, the primary one being a score of 85 percent on two separate audits using an audit instrument developed by CDC, the independent court medical experts, and plaintiff's counsel. When CDC determines that an institution is in substantial compliance, it notifies the court medical experts who conduct an audit within 60 days to determine compliance. If the experts determine the prison is in substantial compliance, they return a year later for a second audit to determine if the prison has maintained substantial compliance.

Where Are We Today? To date, 17 prisons have begun to implement the changes required by Plata. According to CDC, no institution has fully implemented all of the policies and procedures, and each is at varying degrees of compliance. The department has conducted audits of the 2003-rollout institutions to establish a baseline. Some prisons scored 50 percent on these baseline audits. The CDC expects to have its first official audits by the court-appointed medical experts at several prisons in 2006-07.

Recent Court Order Requires Further Improvements Under Plata. In September 2004, the federal court issued a second order requiring further improvements to inmate medical care. This second court order was based on the observations and recommendations of the court medical experts, and the plaintiff's attorneys. In particular, after visiting several prisons, the court-appointed medical experts concluded in a report to the federal court that many CDC doctors were not trained to provide the treatment they were administering to inmates. The report also indicated that there is a lack of departmental oversight of the delivery of inmate health care, and that individual prisons operate with a high degree of autonomy.

In response to these findings, the new court order requires the state to take specific actions in the current and budget years related to (1) physician evaluation and training, (2) treatment of patients with chronic and high-risk medical conditions, (3) physician and nursing classification and supervision, and (4) QMATs.

The Budget Proposal. The Governor's budget requests $30.1 million (General Fund) and 109 full-time positions to address the specific requirements of the September 2004 court order. Below we provide a brief summary of the major requirements of the court order, and how the Governor's budget request proposes to address each.

The budget requests $14.7 million for two interagency agreements with the University of California (UC): one with UC San Diego for physician assessment and training, medical credentialing and peer review, the other with UC San Francisco for on-site physician consultations.

The budget requests $2.9 million (eight positions) to hire medical directors and to contract for outside personnel to supervise and train prison health care professionals in prisons that lack a medical director. (The majority of these funds is for contract staff.)

The budget requests $2.2 million (19 positions) to hire a statewide Director of Nursing and clinical staff at the regional level (in each of the three regions) to oversee clinical and nursing operations in the prisons. It also requests $67,000 for recruitment and retention bonuses for the Physician and Surgeon classification.

The budget requests $7.1 million (53 positions) to establish nine additional QMATs. It also requests $2.4 million (29 positions) to implement the IMSATS, and $738,000 for an evaluation and management analysis ($300,000) and printing ($438,000).

In addition to the $30.1 million budget request described here, the budget provides $15 million—as a "base adjustment"—to continue to rollout Plata reforms at five more institutions pursuant to the 2002-03 proposal already approved by the Legislature.

Issues for Legislative Consideration

Overall, our analysis indicates that the administration's budget request is consistent with the requirements of the new court order in terms of its content. It appears to address the court order's major provisions. Based on our review and discussions with department staff, we identify a number of issues and recommendations for legislative consideration.

Future Costs of Plata Settlement Likely. Based on our discussions with the department, we think there is likely to be future increased costs for the inmate health care delivery system. In particular, future requests for funding would likely include spending to (1) develop and implement a health information system, (2) attract quality health care professionals, and (3) address space requirements to accommodate added staff and equipment. At the time of our analysis, the department did not have an estimate of the potential cost to address these issues.

No Savings Estimates. At this time, we believe the department's estimates potentially overstate the costs of its medical proposal. This is because the department's health care budget does not reflect any anticipated savings from the implementation of the Plata reforms. For example, according to the state's independent medical expert, currently many expensive community hospital visits occur because some CDC health professionals do not have the proper training to diagnose and/or treat some medical conditions confronting them. By providing funds to evaluate and, if needed, train CDC health care professionals in clinical practice, the proposal before the Legislature will likely reduce the department's need to rely on contract medical services provided by outside hospitals. This, in turn, would also reduce the attendant medical guarding costs. Given that much of the request would be implemented in the current year, there should be some level of efficiency savings in the budget year. At the time this analysis was prepared, the department did not have an estimate of the potential savings.

Vacancy Rate Remains High for Health Care Positions. One of the key challenges facing the department is the requirement to hire certain health care professionals, in particular registered nurses and doctors, to work in the prison system. To some extent, the state's ability to reach compliance with the Plata agreement depends on the resolution of this longstanding problem. In order to address this issue, the Legislature has approved over the years several recruitment and retention (R&R) bonuses for health care positions. In 2002-03, for example, as part of the initial Plata request, the Legislature approved R&R bonuses for all classifications of registered nurse positions. However, vacancy information provided by the department shows that vacancy rates in key health care positions remain high. As Figure 6 shows, between 2001 and 2004 the vacancy rate for all but one position classification has increased.

Figure 6

High Vacancy Rates Persist in Key Health Care Positions


Vacancy Rate

Classification Title

January 2001

November 2004

Physician and Surgeon



Pharmacists a



Registered Nurse b



Medical Technical Assistants



a  Includes Pharmacist I and II positions.

b  Includes supervising and surgical RN positions.

   Source: California Department of Corrections.

In response to the September 2004 court order, the Governor's budget proposes another round of R&R bonuses, this time for the physician and surgeon classification. Additionally, it is our understanding based on discussions with CDC that the Department of Personnel Administration (DPA) and a number of other departments are working together to develop a new salary structure for registered nurse classifications by the end of March 2005.

We recommend that CDC and DPA report at the time of budget hearings on (1) how the proposed R&R bonuses will improve recruitment given the state's experience to date with such bonuses, and (2) the outcome of its multiagency project to develop a new salary structure for nurse classifications, in particular its estimated cost and whether and to what extent the new salary structure would make the state competitive in recruiting nurses

Lack of Health Information System Continues to Be a Problem. Inmates regularly transfer from one prison facility to another. In addition, many inmates leave the prison system only to return shortly thereafter. This constant movement, combined with the large scale of California 's prisons, makes tracking medical records, administering medication, and scheduling clinic visits a significant challenge. Currently, inmate medical records are paper based. This makes keeping track of inmate health care cumbersome and extremely time consuming.

Although the department currently uses its Distributed Data Processing System to collect and track some health-related information, such as inmate Tuberculosis test results, this system is very limited because it is outdated, and it is a "stand alone" system which means that information cannot be easily shared with other facilities. Moreover, the prison health facilities generally lack connectivity either through a local area network or a wide area network, further limiting information sharing. Consequently, regional staff, who are responsible for oversight of the health care delivery system, have limited access to information that is required to effectively monitor the delivery of services. As a result, these staff will not be able to examine or analyze by computer such variables as treatment outcomes, referral patterns, procedures performed, and tests ordered. Instead, they will be required to manually review paper reports submitted by each of the prisons, a process that is inefficient, and certainly less effective than computer-based analysis at identifying potential problem areas in prison health care delivery.

In its YACA Strategic Plan, the administration proposes to develop and implement an integrated and automated inmate health information system by 2010. As we mentioned earlier in this analysis, the budget includes $2.4 million and 26 positions to implement IMSATS. Although implementation of IMSATS is required by the September 2004 court order, we note that the system appears to be an "interim" information technology solution rather than a long-term solution for inmate scheduling and tracking. This is because it simply builds upon the existing outdated system.

We recommend that the Legislature direct the department to report at budget hearings on its plan for implementing a comprehensive health information system, and how the proposed IMSATS fits within that plan. Specifically, the department should report on any progress it has made to date regarding the development of an automated health information system, whether the system would include electronic medical records, and the estimated cost of development and implementation.

More CDC Accountability Needed. The department has indicated that it is likely there will be future requests for additional funding to enable the prisons to reach substantial compliance with the court order. Given the potential magnitude of the state's investment in the prison health care system under the Plata court order, the Legislature should require CDC to report periodically on a number of key indicators of its progress. This would allow the Legislature to assess the extent to which the investment of public resources is making a difference in the quality of the health care delivery system in the prisons, thereby moving the state toward full compliance with the court order.

Some key indicators of progress include, for example, the number of inmate appeals related to health care, and the number of in-patient days inmates spend in contract hospitals. If inmate access to health care improves, one would expect the number of inmate health-related appeals to decline. To the extent that CDC medical staff are better trained in primary care clinical practices, one could reasonably expect the number of bed days in outside contract hospitals to decline. Health care information, such as health facility census data, is currently collected through the Health Care Cost and Utilization Program. The department should be reviewing such data on a regular basis to monitor its progress. Therefore, providing prison health care information to the Legislature should not result in significant additional workload.

Accordingly, we recommend that the Legislature adopt supplemental report language (SRL) that directs CDC to annually provide the Legislature information on the inmate health care delivery system, including health facility census data and information on medical related inmate appeals, so that the Legislature may track the department's progress in improving the inmate health care program. The following supplemental report language is consistent with this recommendation.

On or before December 1, the California Department of Corrections shall annually provide a report to the chairs of the fiscal committees in both houses on the status of the implementation of the Plata settlement agreement. The report to the Legislature shall identify specific outcomes relating to the settlement agreement and its goal of providing increased access and higher quality health care services. The report shall include information on medical related inmate appeals, medical staff vacancies, and census data (bed usage) for each prison and community hospital facility.

UC and CDC Partnership Has Merit, but the Proposal Is Not Fully Developed. One of the many recommendations of the California Independent Review Panel was that CDC form partnerships with outside health care entities and seek opportunities to shift the delivery of health care services to these entities. Although the proposed interagency agreements between CDC and UC do not go as far as shifting the delivery of care to UC, the proposal provides the state—particularly CDC and UC—a valuable opportunity to assess the potential for further collaboration. Other states, including Florida and Texas , report substantial benefits to correctional providers and university medical programs from forming such partnerships. Some of the potential benefits include (1) continued learning for prison health care staff; (2) opportunities for clinical research in a unique health care environment; and (3) more cost-effective health care delivery.

At the time this analysis was prepared, the specifics of the proposed interagency agreements had not been finalized. As a result, the proposed budget amounts requested do not reflect a specific proposal that has been agreed to by CDC and UC. Therefore, we withhold recommendation of this component of the department's budget request, pending additional information on the specific agreements between CDC and UC. We recommend that the department report at the time of budget hearings regarding the status of this proposal.

Several Budget Adjustments Needed. In reviewing the proposal, we identified a number of positions and other expenses that are not justified, as well as some technical adjustments that should be made to correct calculations and minor inconsistencies. Based upon our review of the court order, and our discussions with the department, we think that our recommended adjustments, resulting in savings of approximately $3 million, can be adopted without violating the court order.

Additionally, we note that the 2002-03 Budget Act already established many positions to implement operational changes related to medical escort. These consist of 33 Associate Warden for Health Care positions (one for each prison), six Facility Captain positions—two for each of the regional health offices, and more than 280 correctional officer positions. Finally, escorting inmates back and forth safely and securely is a function that many correctional officers perform on a regular basis under the supervision of sergeants and lieutenants. These sergeants and lieutenants should be able to train their staff on any Plata-related policy and procedure changes related to medical escorts. For these reasons, we recommend not approving the new request for an additional 12 Facility Captain positions, and reducing the budget by $1.6 million.

While we agree that the department should have its attorneys tour the prison medical facilities with the plaintiff's attorneys, we believe the department can manage the workload with only two new Staff Counsel positions. With the two new Staff Counsel positions we are recommending, and the one existing Staff Counsel, the department can assign one Staff Counsel position to each of the three institution regions.

We recognize that there could be increased legal workload in the future, as the state will likely be under the existing court order for several years. However, should the legal analysis workload temporarily increase, the department has the option of redirecting legal staff from other activities, or obtaining legal services on a temporary basis from the state Department of Justice. For these reasons, we recommend not approving two of the four Staff Counsel positions requested by the department for savings of approximately $323,000.

The Bottom Line

Overall, we find CDC's budget request to be consistent with the September 2004 court order, and therefore recommend adoption of the request—albeit with a few modifications. We recommend the Legislature direct CDC and DPA to report on recent efforts to design a new salary structure for nurse classifications. We recommend the adoption of SRL requiring CDC to annually provide information that would allow the Legislature to assess the department's progress toward attaining the goals of the Plata settlement agreement. Finally, we recommend that the department report on its plan to develop and implement an automated inmate health information system by 2010.

Accessing Federal Funds for Prenatal Services

Federal Option Opens the Door to State Savings For Incarcerated Women

We recommend that the Legislature approve the administration's proposal to draw down federal funds to offset state costs for prenatal services provided under state health programs. We also examine the feasibility of expanding this option to include an offset of state costs for prenatal services provided to pregnant incarcerated women.

We discuss our proposal to access federal funds for prenatal services provided to pregnant incarcerated women in the Crosscutting Issues section of the "Health and Social Services" chapter.

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