Lack of staffing with MS Prison Industries Corporation puts taxpayer money at risk of fraud

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Another state agency is in hot water with the Mississippi State Auditor’s office after the 2018 Single Audit Report found them putting taxpayer money at risk of financial fraud.

This is all revolving around the Mississippi Prison Corporation Industries (MPCI) who appeared in the audit report on seven different occasions for either not meeting federal requirements or not having the right protections to prevent stealing or misspending taxpayer dollars.

From staff shortages, to not enough protection or control on their inventory and technology servers, those issues threw up huge red flags to State Auditors. 

“What we saw there is an entity or non-profit that is short staffed, and has had some turmoil over the last few years,” State Auditor Shad White said. “With things they’ve decided to invest in.”

Part of their 300 page report, Shad White’s office found many issues revolving around Mississippi Prison Industries Corporation not putting enough people in charge of finances. 

“They didn’t have enough controls in place to prevent fraud from happening and we need those controls to be in place,” White continued. “What you ended up with is the prison industries not having enough people looking at all the expenditures going through that office.”

Created by the State Legislature back in 1990, MPIC has been working to give inmates on the job experiences to teach them skills to find opportunities after they’re released. But internally, Auditors found being short staffed also lead to federal violations with inventory control such as “relying on external auditors to calculate their pension and pre-employment benefit liabilities.” Even though external auditors cannot be part of that systems control.

“I don’t want to see fraud happen, I don’t want to see an agency lose money,” White told us. “On top of taxpayers losing money to somebody who wants to trick the system, so we got to put these guard rails in place.”

In their responses, Mississippi Prison Industries Corporation noted that each finding was a first offense and it has made corrective action plans to fix them. It is now enforcing stronger control over expense reporting records and hiring Blakeney data solutions for software protections. 

Other issues leading to short staff and flaws in the report pointed to the non-profits shortfall in cash due to the loss of a contract to build fish tanks in Texas. We reached out to MPIC for further comment who promised to get back to us, but never did. 

To read the full Audit Report on what they found with MPIC on pages 107-11 click here. The non-profits responses can be found on pages 272-273.

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