State officials still don’t do a good job providing oversight of for-profit, mainland prisons that hold about one-third of Hawaii’s inmate population, according to a recent report from the Auditor’s Office.

The news comes at a time when state lawmakers have set aside money to reopen the Kulani Correctional Facility on the the Big Island as a part of Gov. Neil Abercrombie’s push to bring Hawaii’s inmates home.

A number of lawsuits have been lodged against the state and its private prison contractor in Arizona alleging poor conditions, abuse and even mismanagement resulting in the death of inmates.

The new auditor’s report is a follow-up to a 2010 audit that blasted the Hawaii Department of Public Safety for circumventing procurement law to give a non-competitive contract to Corrections Corporation of America while at the same time providing “misleading” numbers to state lawmakers about the cost-effectiveness of keeping Hawaii’s inmates in Arizona.

About 2,000 Hawaii inmates are held at CCA facilities in Arizona.

While DPS has corrected some issues, the Auditor’s Office found there are still several areas where the agency falls short, leaving open the possibility of future problems.

The report, which was released Wednesday, also looked at other recommendations the Auditor’s Office made to state agencies in 2010, including those related to ethical concerns at the Department of Business Economic Development & Tourism and investment decisions at the Department of Budget and Finance.

Of the 72 recommendations made in 2010, less than half were implemented and about 30 percent were still “in progress.”

In 2010, the Auditor’s Office took DPS to task for its failure to provide accurate financial data to the policymakers and the public, which was a “key component in solving the State’s chronic prison overcrowding problem.”

The auditor also criticized the agency for failing to follow procurement procedures when it entered into a contract with CCA as well as for its attempts to stonewall the state’s investigation into DPS and the prison firm.

Since then, the Auditor’s Office has found that DPS has tried to follow better procurement practices, even entering into a new, legally procured contract with CCA.

There’s also better methodology for estimating the cost of inmate incarceration, the auditor found, although it still doesn’t account for the price of litigation that “if included, would have the biggest impact on per capita costs for housing inmates in out-of-state facilities, since the biggest lawsuits involve these facilities.”

State lawmakers, however, don’t receive any of the updated financial figures, the auditor found, meaning there’s no way for them to compare the in-state and out-of-state costs.

And auditors also found little measurable improvement in DPS contracting and procurement procedures. Employees haven’t received the proper training and there’s no formal process for reviewing and processing invoices to make sure they’re accurate.

Even though DPS Interim Director Ted Sakai told auditors that following state procurement rules was a “top priority” for his agency, he too has yet to participate in any procurement training.

“These significant deficiencies call into question the current director’s commitment to proper compliance and introduce the risk that the violations cited in our previous report can and will occur again,” the report says.

“Finally, since our audit report was issued in December 2010, new leadership has taken over management of (DPS). During our initial audit, we were repeatedly denied full access to requested information. However, in our follow-up review, we found both management and staff to be responsive and helpful.”

DPS has 30 days to issue a report as to why it hasn’t complied with all of the auditor’s recommendations.

“We take the state auditors report seriously,” DPS spokeswoman Toni Schwartz said in an email late Wednesday. “As the current report states, we have achieved compliance in a number of areas mentioned in the 2010 report. We are making strides towards full compliance in the other areas mentioned.”

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