State Auditor Archives

Missouri could soon catch up on its jail reimbursement debt

February 18, 2021 By Alisa Nelson

Gov. Mike Parson’s FY2022 state budget proposal requests $58 million in hopes of getting Missouri completely out of debt in county jail reimbursements. For years, the state has not designated enough funding to pay counties and the city of St. Louis for part of a defendant’s entire local jail stay if the individual ends up going to state prison. Over the past couple years, the Missouri Legislature has been working to dig the state out of this hole.

Missouri Capitol (Photo courtesy of Alisa Nelson, Missourinet)

Missouri is the only known U.S. state that pays its counties and the city of St. Louis for pre-sentencing jail costs.

During a House Budget Committee hearing Wednesday, Trevor Foley, with the Missouri Department of Corrections, says the governor’s budget request would help the program catch up on overdue jail bills.

“That projection is based on looking at FY20 and the first two quarters of FY21 and then factoring in a COVID bounce back basically for the requests for reimbursement to go back up a little bit. And hopefully by the end of FY22, we will have the arrearage gone,” says Foley. “I will point out that this is a very volatile program. In FY21, we received $52 million in total requests. In FY20, we received $39 million in total requests. It is very difficult to project what we are going to receive in requests from a year-to-year basis.”

The state currently pays county jails about $22.58 per day, but the county’s overall daily cost to house a defendant is much higher. Karen Pojmann, spokeswoman for the Missouri Department of Corrections, tells Missourinet the Missouri Sheriff’s Association conducted a survey a year ago and reported to the State Auditor that the actual cost ranged from $25.45 to $110 per day, with an average of $49 per day.

Rep. Peggy McGaugh, R-Carrollton, says she wants the state to pick up more of the local tab.

“The actual cost to house a prisoner is an average of $60 a day,” she says. “So, they go in the hole, every prisoner, every day, all year long. I would like to see that change.”

The governor’s request would also cover certain costs to transfer those offenders.

Previous stories:

Is Missouri sending the right people to prison? https://www.missourinet.com/2017/08/03/is-missouri-sending-the-right-people-to-prison/

(VIDEO) State owes counties $19 million in jail payments; Missouri sheriff feels the pain: https://www.missourinet.com/2017/09/25/video-state-owes-counties-19-million-in-jail-payments-missouri-sheriff-feels-the-pain/

Missouri falls six months behind in paying county jail bills: https://www.missourinet.com/2017/10/02/missouri-falls-six-months-behind-in-paying-county-jail-bills/

Legislator thinks Missouri should overhaul county jail payment system: https://www.missourinet.com/2017/10/09/legislator-thinks-missouri-should-overhaul-county-jail-payment-system/

Audit will probe Corrections Department execution procedures, drug procurement (AUDIO)

January 13, 2014 By Mike Lear

Death penalty opponents and attorneys representing condemned men say the Missouri Department of Corrections is keeping too many secrets and could be breaking state law in the way it’s obtaining drugs to carry out lethal injections. The State Auditor’s Office will explore some of those issues in the course of the audit of Corrections announced last week.

The State Auditor’s Office could look at the executions of Joseph Paul Franklin (left) and Allen Nicklasson during the course of the audit it is conducting of the Department of Corrections.

Media reports say the Department acquired the pentobarbital used in the execution of Joseph Paul Franklin in November from a compounding pharmacy in Oklahoma that is not licensed in Missouri. This has some officials asking whether that violates state law or falls into some sort of “gray area.”

Deputy State Auditor Harry Otto says the audit can include any executions that fall in its timeframe, the two fiscal years that will end June 30. That would include the execution of Franklin and the execution of Allan Nicklasson December 11, as well as any executions that happen through June 30. The only other execution for which a date has been set is that of Herbert Smulls, scheduled to happen January 29.

“There is a fair amount of public interest in this subject,” Otto says, “so we’ll look to see whether the Department has followed its own policies and procedures with respect to the execution protocol. The changes that they made … did they make them pursuant to their own policies and procedures? And we’ll try to evaluate whether or not there was any violation of state law.”

How deeply auditors will explore execution procedures depends on what they learn as the investigation is conducted.

“An auditor keeps probing until he feels he’s gotten the full story,” says Otto. “If we ask questions and they lead to further questions which leads to another angle or pursuing that to the ultimate answer … we keep going until we get the answer. If we picked one … and there are some unanswered questions, it’s likely we would pick the next one and see if that was repeated or if that was isolated.”

State law provides that some components of execution procedures be kept confidential, such as the identities of members of the execution team. Otto says his office has the authority to find out things that members of the public or the media could not because of those protections. That doesn’t mean that information would become public, however.

“There’s still confidentiality with respect to what you tell the auditor. That doesn’t always get published,” Otto tells Missourinet. “When we learn of things that are otherwise protected and they become part of our work papers, they remain protected. In other words, simply because we got the identities of certain parties, that doesn’t mean we’re going to publish those identities in our report, nor can our work papers be [obtained in a Sunshine Law request].”

Otto says if any violations of law are made public, the Auditor’s Office would refer them to the proper law enforcement agency. An audit report could be ready by this fall.

Listen to the interview with Harry Otto, 11:16

House lawmakers consider fate of Second Injury Fund

January 18, 2013 By Mike Lear

Momentum is growing in the state House for the elimination of Missouri’s Second Injury Fund.

The Fund was created in 1943 to encourage employers to hire World War II veterans who were injured but could still work. It would later pay compensation in cases of workers returning to a job after an injury making claims when they are injured again.

Money in the fund comes from a surcharge on businesses’ workers’ compensation insurance that was capped at 3 percent in 2005. Since then lawmakers say it has become insolvent.

Attorney General Chris Koster stopped settling Second Injury Fund cases in 2009, leaving them all up to the courts, and quit paying new awards in 2011. There are now more than 28,000 pending cases.

State Auditor Tom Schweich released a report last week saying the Fund has only $3.2 million and owes $28.1 million in unpaid obligations.

House Speaker Tim Jones (R-Eureka) said in his opening day address that if the fund can not be saved without raising taxes on employers, the state should begin winding down the fund. In light of Schweich’s report, he now says, “I think the direction we will likely have to go is with a winding down of the Fund as 23 other states have done and take care of that backlog of claims.”

Koster said last year he also would prefer to eliminate the Fund.

Jones says he doesn’t yet know who will lead on the issue in his chamber, but Representative Chris Kelly (D-Columbia) is working on a bill to do away with the Fund.

As for whether lawmakers have any idea where money might come from to cover unpaid liabilities, House Budget Committee Chairman Rick Stream (R-Kirkwood) says, “Not yet.”

Election bill advances from House Committee

January 16, 2013 By Mike Lear

The House Elections Committee has approved House House Speaker Pro Tem Jason Smith’s (R-Salem) proposal that would require openings for lieutenant governor, secretary of state, attorney general, state auditor, state treasurer and U.S. Senator be filled at the next general election after they become vacant. It also would block a temporary office holder appointed by the Governor from running to fill the seat he or she is appointed to fill.

House Speaker Pro Tem Jason Smith (R-Salem) (photo courtesy, Tim Bommel, Missouri House Communications)

Smith told the Committee, “It’s just the purpose that a lot of people brought forward in the past that they felt like an individual being appointed would have an unfair advantage over someone who is running for the position.”

Critics say Smith’s bill is politically motivated, aimed at keeping a Democrat Governor, Jay Nixon, from naming the replacement for a Republican Lieutenant Governor, Peter Kinder, who is pursuing the 8th District Congressional Seat being vacated by Jo Ann Emerson. Smith says, not so.

See the proposal, HB 110.

“It’s legal reasons, not political reasons, because the law’s not clear. The law provides in section 105.030 that upon a vacancy of a statewide office, for example Lieutenant Governor, it’s filled by special election, but then the governor of the state is saying that no, he gets to appoint it.”

Representative Stacey Newman (D-St. Louis County) is skeptical.

Representative Stacey Newman (D-St. Louis County)

“I think the public is suspect, too. We talk about transparency and we hear all the time about smaller government. This bill has some elements that are more government.”

Newman was the only “no” vote in the Committee. She believes this bill wouldn’t have been filed if there was not a Democrat in the Governor’s Office.

“I think this issue has arisen because of potential vacancies in the Lieutenant Governor’s office now. That potential has been there for some time and I think if that wasn’t part of the discussion we wouldn’t be pushing this so fast.”

This is Smith’s fifth year to file the bill. He says it’s been changed to address the concerns of Governor Nixon, who vetoed it two years ago.

The bill is scheduled to be heard by the House Rules Committee today. Smith hopes it will be debated on the floor next week.

State auditor slams management of Missouri Quality Jobs program (AUDIO)

July 3, 2012 By Mike Lear

The State Auditor says the economic development department is mismanaging the Quality Jobs tax incentive program and overplaying its results.

Deputy State Auditor Harry Otto

Quality Jobs tax incentives are available for employers who create or retain full-time jobs, pay at least half the health insurance premium for them and pay at least the average wage in the county. Employers can receive tax credits or hold onto income tax withheld from the employees it keeps or hires.

Deputy Auditor Harry Otto says when an employer applies to the program it offers an estimate of the number of jobs it expects to create or retain. “Later the employers have to report the actual numbers of jobs retained, jobs created, dollars spent. What we’re saying is when you look at the actual numbers after the fact they are less than the projected numbers.”

The audit says those are the figures used to measure the economic impact of the program and calls them “significantly overstated.”

Since the program was launched in 2005 DED has approved projects touted to create 45,646 jobs. According to the annual report on the program that estimate has been reduced by 18,960. So far, just over 7,000 jobs have actually been created.

It also says DED is not providing enough oversight into whether companies getting the credits are eligible for them. Otto explains, “We, I think, pointed out one where there’s still a disagreement as to whether or not the jobs were rolled I think from a parent to a subsidiary or from a subsidiary to a parent, that we don’t think that really the jobs were created. They were moved from one company shell to another.”

The auditor’s office also didn’t like how the employers DED authorizes to retain the income taxes they withhold account for it. Otto says, “The employer then reports to Department of Revenue … they’re the ones that are the tax collectors of the state. We think there should be more communication between DED and DOR to determine that the proper amount of withholding occurred and that the employer who created and/or retained jobs has retained the proper amount.”

See the “Citizen’s Summary” of the Auditor’s report here.

The auditor’s office gave the program’s administration a “poor” rating, making it the first state program to recieve that rating. Otto empasized that isn’t an assessment of the program, but how it’s been run. “That they could do a better job by acting responsibly with respect to a quicker turnaround or reporting of the information and then giving the General Assembly updated information all the time and not just relying on the initial estimates that were projected by the employers who said they would create or retain jobs.”

Otto says the findings were not well received by the Department. “We were told by DED in some cases the entire program hasn’t unfolded yet, so you can’t really look back and tell the entire thing is over but we say they should update their numbers … the numbers that they give to the General Assembly, because the General Assembly’s making decision based on these projections and if the projections turn out fo be inflated or too high, the General Assembly ought to know that.”

The auditor’s office also says data should be reported in a more timely manner. Otto says, “(DED) has established a November date for receiving information from employers and we think that’s too much time … we think that they could improve reporting by establishing an earlier date to have that information submitted to them.”

Missourinet’s call to the Department of Economic Development has not been returned. View its response to the audit along with the rest of the report from the Auditor’s Office here.

AUDIO: Mike Lear interviews Deputy State Auditor Harry Otto, 10:09