Office of the Federal Detention Trustee's (OFDT) Cost Estimation Methods Reflect Features of Best Practices, but Processes Could be Enhanced
Gao ID: GAO-10-1037R September 30, 2010This letter formally transmits a summary of an oral briefing we gave to Congress on August 30, 2010 and subsequent agency comments. We gave this briefing in response to the Conference Report accompanying the Consolidated Appropriations Act, 2010 (H.R. Rep. No. 111-366, at 662 (2009) (Conf. Rep.)), which directed us to evaluate the methods the Office of the Federal Detention Trustee (OFDT) uses to project the federal detainee population and the per diem rates OFDT pays for detention services, as well as other factors that are translated into OFDT's annual budget request. In conducting this work, we analyzed OFDT's documentation of its detainee population and cost estimation model, compared OFDT's projections in the President's budget submission with actual values of detainee population and costs, and interviewed OFDT and Department of Justice (DOJ) officials to (1) assess how OFDT develops its detainee population and cost estimates; (2) determine the extent to which OFDT follows best practices for developing high-quality cost estimates; and (3) determine the reasons why OFDT required funds in addition to its annual appropriation in fiscal years 2005, 2008, and 2009.
In summary, OFDT develops its annual budget request for DOJ using three general steps: (1) estimating cost increases needed to maintain current service levels, (2) projecting the changes in the detainee population, and (3) estimating the costs associated with detainee population and other program changes. OFDT's process for estimating the federal detainee population and costs reflects some of the features of GAO's best practices for cost estimation, but OFDT has not adopted enough of the practices to meet the four characteristics that we associate with high-quality cost estimates. Specifically, we determined that OFDT's cost estimation processes substantially met the features that characterize accurate and comprehensive cost estimates and partially met the features that characterize welldocumented and credible cost estimates. OFDT documents the purpose, formulas, and data sources behind its cost estimates, but many of the technical aspects of OFDT's cost estimation model are fully understood only by the individual who runs the model. Further, the President's annual budget request to Congress for OFDT has begun to include estimates of how an increase in the number of individuals charged with drug, weapons, or immigration offenses may affect program costs, but, as a best practice, OFDT also could perform analyses that account for the risks and uncertainties in the model's assumptions and estimates. OFDT and DOJ officials attributed OFDT's need for additional funding to several factors, including unanticipated increases in the detainee population, higher per diem rates resulting from limited available detention bed space, and limited financial reserves at the beginning of the fiscal year. More specifically, law enforcement initiatives related to immigration have significantly increased the total detainee population. OFDT officials stated that it is difficult to incorporate such initiatives into its detainee population model because OFDT, as part of the federal budget process, must submit its projections for a fiscal year 18-24 months before that fiscal year and the law enforcement initiative begin. In addition, since OFDT has limited flexibility in how it spends its funds and its annual costs exceed $1 billion, even a small difference between projected and actual costs could result in OFDT facing costs that exceed its appropriated funds by tens of millions of dollars. As a result of our findings, we are recommending that OFDT improve its documentation of the calculations it uses in its detention population and cost estimation model. We are also recommending that OFDT quantify the extent to which costs could vary due to the inherent risks in key assumptions, data inputs, and other factors.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: David C. Maurer Team: Government Accountability Office: Homeland Security and Justice Phone: (202) 512-9627GAO-10-1037R, Office of the Federal Detention Trustee's (OFDT) Cost Estimation Methods Reflect Features of Best Practices, but Processes Could be Enhanced
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GAO-10-1037R:
United States Government Accountability Office:
Washington, DC 20548:
September 30, 2010:
The Honorable Barbara Mikulski:
Chairwoman:
The Honorable Richard Shelby:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
U.S. Senate:
The Honorable Alan Mollohan:
Chairman:
The Honorable Frank R. Wolf:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
House of Representatives:
Subject: Office of the Federal Detention Trustee's (OFDT) Cost
Estimation Methods Reflect Features of Best Practices, but Processes
Could be Enhanced:
This letter formally transmits a summary of an oral briefing we gave
on August 30, 2010 and subsequent agency comments (see enclosure). We
gave this briefing in response to the Conference Report accompanying
the Consolidated Appropriations Act, 2010 (H.R. Rep. No. 111-366, at
662 (2009) (Conf. Rep.)), which directed us to evaluate the methods
the Office of the Federal Detention Trustee (OFDT) uses to project the
federal detainee population and the per diem rates OFDT pays for
detention services, as well as other factors that are translated into
OFDT's annual budget request. In conducting this work, we analyzed
OFDT's documentation of its detainee population and cost estimation
model, compared OFDT's projections in the President's budget
submission with actual values of detainee population and costs, and
interviewed OFDT and Department of Justice (DOJ) officials to (1)
assess how OFDT develops its detainee population and cost estimates;
(2) determine the extent to which OFDT follows best practices for
developing high-quality cost estimates; and (3) determine the reasons
why OFDT required funds in addition to its annual appropriation in
fiscal years 2005, 2008, and 2009.
In summary, OFDT develops its annual budget request for DOJ using
three general steps: (1) estimating cost increases needed to maintain
current service levels, (2) projecting the changes in the detainee
population, and (3) estimating the costs associated with detainee
population and other program changes.
OFDT's process for estimating the federal detainee population and
costs reflects some of the features of GAO's best practices for cost
estimation, but OFDT has not adopted enough of the practices to meet
the four characteristics that we associate with high-quality cost
estimates. Specifically, we determined that OFDT's cost estimation
processes substantially met the features that characterize accurate
and comprehensive cost estimates and partially met the features that
characterize well-documented and credible cost estimates. OFDT
documents the purpose, formulas, and data sources behind its cost
estimates, but many of the technical aspects of OFDT's cost estimation
model are fully understood only by the individual who runs the model.
Further, the President's annual budget request to Congress for OFDT
has begun to include estimates of how an increase in the number of
individuals charged with drug, weapons, or immigration offenses may
affect program costs, but, as a best practice, OFDT also could perform
analyses that account for the risks and uncertainties in the model's
assumptions and estimates.
OFDT and DOJ officials attributed OFDT's need for additional funding
to several factors, including unanticipated increases in the detainee
population, higher per diem rates resulting from limited available
detention bed space, and limited financial reserves at the beginning
of the fiscal year. More specifically, law enforcement initiatives
related to immigration have significantly increased the total detainee
population. OFDT officials stated that it is difficult to incorporate
such initiatives into its detainee population model because OFDT, as
part of the federal budget process, must submit its projections for a
fiscal year 18-24 months before that fiscal year and the law
enforcement initiative begin. In addition, since OFDT has limited
flexibility in how it spends its funds and its annual costs exceed $1
billion, even a small difference between projected and actual costs
could result in OFDT facing costs that exceed its appropriated funds
by tens of millions of dollars. For additional information on the
results of our work, see slides 12 through 15 in the enclosure.
As a result of our findings, we are recommending that OFDT improve its
documentation of the calculations it uses in its detention population
and cost estimation model. We are also recommending that OFDT quantify
the extent to which costs could vary due to the inherent risks in key
assumptions, data inputs, and other factors.
In commenting on a draft of this briefing, the Department of Justice
concurred with our recommendations and provided technical comments
that we incorporated where appropriate.
We are sending copies of this report to the appropriate congressional
committees. We are also sending copies to the Attorney General of the
United States, as well as the Federal Detention Trustee. This report
will be available at no charge on our Web site at [hyperlink,
http://www.gao.gov]. Should you or your staff have questions
concerning this report, please contact me at (202) 512-8777 or
MaurerD@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. Key contributors to this report were Joy Gambino, Assistant
Director; Karen Richey, Assistant Director; Daren Sweeney, Senior
Analyst; Edith Sohna, Senior Analyst; Pedro Almoguera, Senior
Economist; and Janet Temko, Senior Attorney. Michele Fejfar, Adam
Vogt, and Melissa Wolf provided additional technical assistance.
Signed by:
David C. Maurer:
Director, Homeland Security and Justice:
Enclosure:
[End of section]
Enclosure:
Briefing on the Office of Federal Detention Trustee's Methods for
Estimating Costs:
Prepared for the Senate and House Appropriations Committees:
Subcommittees on Commerce, Justice, Science, and Related Agencies:
Briefing Overview:
* Introduction;
* Objectives, Scope, and Methodology;
* Results in Brief;
* Background;
* Findings;
* Conclusions;
* Recommendations for Executive Action;
* Agency Comments;
* Appendix I.
Introduction:
The Office of the Federal Detention Trustee (OFDT) was
established within the Department of Justice (DM) in fiscal year
2001.[Footnote 1] OFDT's mission is to centrally manage the funds to
detain individuals charged with federal crimes as they await
adjudication.
Previously, DOJ's United States Marshals Service (USMS) managed
federal detention resources, but with the creation of OFDT, the two
components now work in tandem”OFDT has
responsibility for the budgeting and USMS maintains the day-to-day
responsibility for housing its detainees and transporting them to
court proceedings.
From 2001 through 2009, the number of detainees under USMS custody
increased from 37,124 to 58,746 per day. About 45 percent of this
increase occurred because of a rise in immigration-related arrests
along the Southwest border of the United States, and one-third of the
remaining increase resulted from a rise in drug-related charges.
Reflecting the increase in the number of USMS detainees, OFDT's budget
for detention services has increased from $775 million in fiscal year
2003 (the first year OFDT assumed responsibility for managing program
resources from the USMS) to $1.44 billion in fiscal year 2010.
Approximately 90 percent of OFDT's program costs result from expenses
related to USMS detainee housing and subsistence. The majority of
remaining expenditures support detainee services, such as health care,
medical guards, and prisoner transportation.
In certain recent years, OFDT has needed funding in excess of its
annual appropriation. For example:
* Fiscal year 2005: OFDT received $184 million in supplemental funding
from the Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Tsunami Relief, 2005.[Footnote 2]
* Fiscal year 2008: OFDT received $20 million through a transfer from
DOJ's Assets Forfeiture Fund.[Footnote 3]
* Fiscal year 2009: OFDT received $60 million in supplemental funding
through the Supplemental Appropriations Act, 2009.[Footnote 4]
[End of section]
Objectives, Scope, and Methodology:
Objectives:
The Conference Report accompanying the Consolidated Appropriations
Act, 2010, directed us to review OFDT's methods for determining
resource requirements.[Footnote 5] In response to this mandate, this
report addresses the following three questions:
1. How does OFDT develop its detainee population and cost estimates
when developing its annual budget requests?
2. To what extent do OFDT's methods for estimating costs and its
detainee population follow established best practices?
3. What factors contributed to OFDT's need for funds in excess of its
appropriation in recent years and what actions, if any, has OFDT taken
to better account for these factors in its annual budget estimations?
Scope and Methodology: Objective 1:
To determine how OFDT estimates its detainee population and its costs
when developing its annual budget request to DOJ, we:
* analyzed OFDT documentation, including its detainee population model
and budget development guidelines to understand the steps OFDT uses to
estimate detainee population and costs;
* interviewed cognizant program officials from DOJ's central budget
office and OFDT's and USMS' budget development offices, to learn about
OFDT's methods for estimating costs. We also interviewed OFDT's
Statistician to obtain information on OFDT's methods for estimating
detainee population increases; and;
* reviewed the Office of Management and Budget's (OMB) and DOJ's
budget development guidance, including OMB's Circular A-11, to obtain
information on federal budget formulation standards and the
requirements OFDT must follow in preparing its annual budget request
to DOJ.[Footnote 6]
Scope and Methodology: Objective 2:
To determine the extent to which OFDT's methods for estimating costs
and its detainee population model follow established best practices,
we:
* analyzed the cost estimates contained in the President's annual budget
submission to Congress for OFDT for fiscal years 2005 through 2009;
* interviewed OFDT budget officials, including the Assistant Trustee
for Budget, Finance and Forecasting, to understand how OFDT developed
its detainee and budget cost estimates; and;
* compared the description OFDT provided for how it develops its
detainee projections and cost estimates against the criteria for best
practices we identified in our Cost Estimating and Assessment Guide:
Best Practices for Developing and Managing Capital Program Costs.
[Footnote 7]
Scope and Methodology: Objective 3:
To determine the factors that contributed to OFDT's need for funds in
excess of its annual appropriations in 2005, 2008, and 2009, and what
actions, if any, OFDT has taken to better account for these factors in
its annual budget estimations, we:
* reviewed OFDT documentation, including reported costs for
maintaining key operations, and compared these costs to requests for
funding included in the President s annual budget submission to
Congress for OFDT for fiscal years 2005 through 2009;
* interviewed OFDT and DOJ budget development officials to obtain
their perspectives on the factors contributing to why OFDT's costs in
recent years have exceeded the funding levels in OFDT's enacted
appropriation. We also asked these officials to discuss what, if any,
actions OFDT has taken to account for these factors.
To assess the reliability and consistency of the information we
obtained about OFDT's methods for estimating costs for its annual
budget submission, we compared the summary figures contained in the
President's annual budget submission to Congress for OFDT for fiscal
years 2005 through 2009 against the more detailed information
contained in the budget appendices.
We also interviewed USMS and OFDT officials knowledgeable about
controls in place to maintain the integrity of data on (1) USMS
detainees, which OFDT uses in its detainee projection model; and (2)
annual costs OFDT reported between 2003 and 2009. As a result, we
determined that the data were sufficiently reliable for the purposes
of this report.
To ensure the technical accuracy of the briefing, we provided a draft
of this briefing to DOJ and OFDT and met with those officials to
obtain technical comments which we incorporated as appropriate.
We conducted this performance audit from February 2010 through August
2010 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the work
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our objectives. We
believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our objectives.[Footnote 8]
[End of section]
Results in Brief:
OFDT develops its annual budget request to DOJ using three general
steps: (1) estimating cost increases needed to maintain current
service levels, (2) projecting detainee population changes, and (3)
estimating the costs associated with detainee population.
Although OFDT cost estimation methods reflect features of best
practices, the methods do not employ enough of these practices to meet
the four characteristics of a high-quality cost estimate. Using GAO's
guide for developing high-quality cost estimates, we found that OFDT
has substantially met the features that characterize accurate and
comprehensive cost estimates, and partially met the features that
characterize well-documented and credible cost estimates. OFDT could
improve by:
* Documenting key assumptions. OFDT acknowledges that its cost
estimation model is not fully documented and is known only by its
Statistician. Documenting all steps for developing its cost estimate,
including which elements are included in each of its major cost
categories, would better position OFDT to recreate its estimates in
the event of attrition within its budget office among those who have
developed initial cost estimates.
* Providing cost ranges to reflect best and worst cases. OFDT does not
formally conduct risk analyses, nor does it assess the likelihood of
costs varying due to outside events. While not required by DOJ, such
an analysis would provide a more comprehensive picture of risks
associated with these cost estimates.
OFDT and DOJ officials attributed the need for additional funds in
recent years to unanticipated increases in the detainee population in
2005, limited financial reserves in 2008, and increases in average
detainee housing and subsistence rates in 2009. Since the detainee
population is the most significant driver of OFDT's costs, OFDT states
that it continually adjusts its detainee projection model to better
predict growth. However, since OFDT has limited flexibility in how it
spends its funds and its annual costs exceed $1 billion, even a small
difference between projected and actual costs could result in OFDT
facing costs that exceed its appropriated funds by tens of millions of
dollars.
To improve OFDT's cost estimation process, we are recommending that
the Attorney General instruct the Federal Detention Trustee to take
the following two actions:
1. Improve documentation of calculations used to (a) project the
number of USMS detainees and (b) estimate program costs.
2. Quantify the extent to which its costs could vary due to changes in
key cost assumptions”and submit a risk--adjusted cost estimate, along
with an associated confidence level and corresponding budget
documentation”-to DOJ to facilitate decision making.
[End of section]
Background - OFDT's mission:
OFDT's mission is to manage and regulate the federal detention program
and the Justice Prisoner & Alien Transportation System (JPATS), which
transports USMS detainees to DOJ's Bureau of Prisons (BOP) facilities
after they have been convicted and sentenced.[Footnote 9]
* OFDT is responsible for managing the funds associated with federal
detention and overseeing federal detention activities, whereas USMS is
responsible for the custody and movement of USMS detainees.
* OFDT began developing projections and budget estimates for federal
detention activities in fiscal year 2003 in preparation for the
President's Budget submission to Congress for fiscal year 2005. OFDT
assumed responsibility for JPATS operations from USMS in fiscal year
2007.
Background - A detainee's path through the federal detention system:
Entrance: An individual who is arrested for a federal crime must be
brought before a court for an initial hearing. After the hearing, the
individual is either released or remanded to the custody of USMS until
the case is adjudicated. USMS takes custody and transports him/her to
a facility for detention, as figure 1 illustrates.
Detention: USMS houses the majority of its detainees in facilities
operated by state or local governments and private entities. In fiscal
year 2009, only about 20 percent of USMS detainees were housed in BOP
facilities.
Exit: Once a USMS detainee's case is adjudicated, the individual exits
detention. If convicted, USMS takes the individual from the detention
facility to a BOP facility to serve his/her sentence.
Figure 1: A detainee's path through the federal detention system:
[Refer to PDF for image: illustration]
Arrest (e.g. USMS, and ICE):
Charged with a federal crime;
Goes to a detention facility (if not released).
State or local facility:
Initial court appearance;
Arraignment;
Status/Motion hearing;
Trial/Open plea;
Sentencing;
Convicted: BOP facility; or:
Acquitted. Out of system.
Private facility:
Initial court appearance;
Arraignment;
Status/Motion hearing;
Trial/Open plea;
Sentencing;
Convicted: BOP facility; or:
Acquitted. Out of system.
BOP facility:
Initial court appearance;
Arraignment;
Status/Motion hearing;
Trial/Open plea;
Sentencing;
Convicted: BOP facility; or:
Acquitted. Out of system.
Source: GAO analysis of ODFT data; Art Explosion (clipart).
Note: Pursuant to the Bail Reform Act of 1984, a person charged with a
federal crime must appear before a judicial officer who is required to
issue an order either releasing or detaining that person pending
trial. 18 U.S.C. § 3141. The person may be released on personal
recognizance or subject to other conditions. 18 U.S.C. § 3142.
[End of figure]
Background - OFDT's payments for use of detention facilities, by
facility type:
BOP facilities: OFDT does not pay BOP for use of its detention
facilities, as BOP recovers any USMS detention-related costs for USMS
detainees through its annual appropriation.
State and local government facilities: OFDT pays state and local
governments for housing and subsistence based on per diem rates”the
rate for housing one detainee for 1 day in detention”that are
negotiated between the facility and USMS, with OFDT's final approval.
The rates are established through an Intergovernmental Agreement (IGA)
and cover housing, subsistence, and a few other costs, such as those
for medical care provided at the facility.
Private detention facilities: OFDT negotiates with each private
facility for housing and subsistence, paying a set amount for a
guaranteed number of beds.
Background - Federal budget formulation process:
Through the multiphase federal budget formulation process, OFDT is
required to identify resource requirements and estimate costs for a
fiscal year 18-24 months before the fiscal year involved begins.
OMB guides this process, assisting the President in the submission of
the Budget of the United States Government”or "the President's Budget"”
to the Congress.
Key steps follow:
* OMB issues Circular A-11 to federal agencies, providing detailed
instructions for submitting budget data and materials, as well as
criteria for developing budget submissions;
* DOJ issues to all components, such as OFDT, its annual budget
development guidelines;
* OFDT submits its budget request to DOJ's budget staff about a year
and a half prior to the budget year in question;
* the Attorney General analyzes all DOJ components' budget requests in
light of department wide priorities and submits the DOJ annual budget
submission to OMB; and;
* OMB assists the President in making final decisions on all agencies'
budgets and submitting the President's Budget to Congress, which
aggregates submissions for all of DOJ's components, including OFDT.
Figure 2 provides a high-level overview of this process.
Figure 2: Background OFDT's budget formulation process:
[Refer to PDF for image: illustration]
1. February-May: Office of the Federal Detention Trustee (OFDT) begins
the process of planning and formulating its budget request, using OMB
and OOJ budget development guidelines. The budget will be in effect in
2 years.
2. June-August: DOJ budget staff analyzes OFDT's budget request and
makes recommendations; OFTD appeals DOJ recommendations, if necessary.
DOJ finalizes recommendations and consolidates DOJ component's budget
requests for the Attorney General's review.
3. August: The Attorney General reviews the consolidated request and
makes a final decision, which is forwarded to OFDT and DOJ components
to prepare for OMB submission.
4. September: DOJ submits budget to OMB.
5. September-November: OMB reviews spending request, spending caps,
and administration priorities.
6. Late November: OMB gives cabinet agencies, including DOJ, their
spending levels and program guidance for the budget--or "passback."
7. DOJ appeals to OMB for more funding, if necessary, and enters into
negotiations; final budget request decisions are made.
8. First week of February: Results in the President's Request to
Congress.
Background - OFDT's budget composition:
OFDT's appropriated budget is comprised of one account: Detention
Services. This account funds:
* Housing and Subsistence (which comprises about 90 percent of the
account);
* Health Care;
* Medical Security Guards;[Footnote 10]
* Ground Transportation;
* JPATS, representing costs associated with the transport of USMS
detainees to BOP facilities after they have been convicted and
sentenced; and;
* "Other"”-including administrative costs and meals for prisoners, as
necessary, during transportation to medical facilities or courts.
OFDT's enacted fiscal year 2010 appropriation was about $1.4 billion.
[Footnote 11]
Background - OFDT's funds in excess of appropriations:
OFDT assumed responsibility from the USMS for projecting the detainee
population and estimating program costs in fiscal year 2003 in
preparation for the fiscal year 2005 budget cycle. Including FY 2005,
there have been 3 fiscal years in which OFDT has been provided with
additional funds in excess of its annual appropriation, as shown in
Table 1.
Background - OFDT Supplemental Appropriations and Transfers:
Table 1: OFDT Supplemental Appropriations and Transfers (dollars in
thousands):
Fiscal year: 2005;
President's budget submission: $938,810;
Enacted appropriation: $885,994;
Additional funds above enacted appropriation: $184,000;
Additional funds above enacted appropriation as percentage of OFDT
enacted budget: 21%.
Fiscal year: 2006;
President's budget submission: $1,222,000;
Enacted appropriation: $1,177,000;
Additional funds above enacted appropriation: $0;
Additional funds above enacted appropriation as percentage of OFDT
enacted budget: n/a.
Fiscal year: 2007;
President's budget submission: $1,332,326;
Enacted appropriation: $1,225,816;
Additional funds above enacted appropriation: $0;
Additional funds above enacted appropriation as percentage of OFDT
enacted budget: n/a.
Fiscal year: 2008;
President's budget submission: $1,294,226;
Enacted appropriation: $1,225,920;
Additional funds above enacted appropriation: $20,000;
Additional funds above enacted appropriation as percentage of OFDT
enacted budget: 2%.
Fiscal year: 2009;
President's budget submission: $1,295,319;
Enacted appropriation: $1,295,319;
Additional funds above enacted appropriation: $60,000;
Additional funds above enacted appropriation as percentage of OFDT
enacted budget: 5%.
Sources:
FY 2005 – Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Tsunami Relief, 2005, Pub. L. No. 109-13,
119 Stat. 231, 270.
FY 2008 – Transfer from another DOJ account”the Assets Forfeiture Fund.
FY 2009 – Supplemental Appropriations Act, 2009, Pub. L. No. 111-32,
123 Stat. 1859, 1860 (2009).
[End of table]
Background - OFDT challenges:
According to OFDT officials, there are several factors that complicate
the management of resources for USMS detention activities:
OFDT serves all USMS detainees: USMS must accept, house, and transport
detainees and OFDT is responsible for paying for USMS detainee housing
and transportation costs. OFDT fulfills this responsibility through
indefinite-term contracts.[Footnote 12] Thus, USMS is limited in how
it can reduce services in order to reduce detention costs. According
to OFDT and USMS officials, while USMS attempts to place detainees in
lower-cost facilities when possible, it must also satisfy the requests
of courts to keep detainees within close proximity to the courthouse
where they will be tried.
OFDT's costs are subject to several factors beyond OFDT's control:
* New federal law enforcement initiatives, policy decisions by the
U.S. Attorneys' Offices on what types of offenses to target, and
rulings by individual courts affect the number of USMS detainees and
the length of time they remain in the federal detention system.
* Availability of space at detention facilities also can significantly
affect the housing and subsistence rates that OFDT must pay. For
example, state and local jails are increasingly reserving space for
their own inmates. As a result, USMS has recently placed a larger
number of federal detainees in private facilities, which”on average”
have higher rates than state and local facilities.
Objective 1- How does OFDT estimate its costs and detainee population
when developing its annual budget submission?
OFDT estimates costs using three general steps:
Step 1: OFDT estimates the costs necessary to provide services for the
current USMS detainee population in the next fiscal year.
Step 2: OFDT projects USMS detainee population changes for the budget
year.
Step 3: OFDT estimates costs to accommodate projected USMS detainee
population changes for the budget year.
Objective 1- Estimating costs to maintain current services (Step 1):
First, OFDT estimates how much more it will cost to provide services
to the current number of detainees in the next fiscal year. Per
guidance from DOJ, OFDT begins by using the prior year's enacted
budget as a baseline, then makes adjustments to this base by
estimating likely cost increases.
* To estimate changes in detention services costs, OFDT has developed
a set of internal cost indices. These indices employ standard
econometric techniques and reflect methodologies used by the Bureau of
Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA). OFDT
also applies the Consumer Price Index, the Employment Cost Index for
State and Local Government Workers, and the Medical Care Service Index
to make adjustments to the costs of detention-related services, such
as health care, prisoner transportation, and medical guard services.
Whenever possible, OFDT will also adjust costs to reflect rate changes
in specific contracts for detention services.
* To estimate average annual operating cost increases, OFDT analyzes
obligations from the prior year, as well as growth in the average
daily population (ADP) and the number of detainees received by type of
offense over the past 5 years.
Objective 1- Projecting population changes (Step 2):
Second, OFDT uses a statistical model to project increases in the ADP
in state, local, and private detention facilities.
* The model uses time series data to predict the primary factors that
influence ADP: the number of persons arrested for federal offenses and
booked by the USMS, and the length of time detainees are held in
detention.
* In addition, the model uses statistical techniques to track the
length of time USMS detainees remain in detention and in which
specific detention facilities they will be placed. OFDT's model
projects ADP by estimating the number of individuals charged across
nine different types of offenses in six different geographical
regions.[Footnote 13]
* Because the model is based on historical data, it assumes that the
future will reflect changes of the past. OFDT officials state that
they attempt to anticipate changes that may not reflect historical
trends, but they emphasize that many of these changes, such as law
enforcement initiatives that focus on a certain type of offense, are
largely beyond OFDT's control and difficult to project.
* OFDT's model relies primarily on data systems from USMS: the Justice
Detainee Information System and the Prisoner Tracking System.
Objective 1- Estimating costs of expected detainee population changes
(step 3):
Third, OFDT estimates costs to accommodate projected detainee
population changes for the budget year.
* Once the model has projected the ADP by region and detention
facility, OFDT estimates total costs using the following formula:
Total Detention Costs = ADP * 365 days in the year * the housing and
subsistence rate at each facility.
* OFDT adjusts the costs of detention-related services, such as health
care and prisoner transportation, to reflect changes in the size of
the detention population.
Objective 2 - To what extent do OFDT's methods for estimating its
costs follow established best practices?
Using the 12 best practices outlined in our Cost Estimating and
Assessment Guide (Guide), we found that OFDT has substantially met the
features that characterize accurate and comprehensive cost estimates,
and partially met the features that characterize well-documented and
credible cost estimates.
* The Guide has identified 12 best practices that are the basis for
effective cost estimation.[Footnote 14] We associate these practices
with 4 characteristics: accurate, comprehensive, well-documented, and
credible. OMB endorsed this guidance as being sufficient for meeting
most cost estimating requirements, including for budget formulation.
* If followed correctly, these best practices should result in
reliable and valid cost estimates that (a) can be easily and clearly
traced, replicated, and updated; and (b) enable managers to make
informed decisions.
Objective 2 - Extent to which OFDT's cost estimation methods reflect
GAO's cost estimation best practices:
As table 2 illustrates, although OFDT's cost estimation methods
reflect features of best practices, the methods do not employ enough
of these features to meet the four characteristics of a high-quality
cost estimate. The following provides the definitions we used in
assessing OFDT's methods for estimating its costs in its annual budget
submission to DOJ:
Met ” OFDT provided evidence that its methods encompass all of the
characteristic's features;
Substantially Met ” OFDT provided evidence that its methods encompass
a large portion of the characteristic's features;
Partially Met ” OFDT provided evidence that its methods encompass
about half of the characteristic's features;
Minimally Met ” OFDT provided evidence that its methods encompass a
small portion of the characteristic's features;
Not Met - OFDT provided no evidence that its methods encompass any of
the characteristic's features.
DOJ officials reported being satisfied with OFDT's cost estimation
methods, noting that they could not identify any area needing
improvement.
Table 2: OFDT's Performance in Meeting the Features of Key Cost
Estimation Characteristics:
Characteristic: Accurate;
Feature: The cost estimates should provide for results that are
unbiased and should not be overly conservative or optimistic. In
addition, the estimates should be updated regularly to reflect
material changes in the program, and steps should be taken to minimize
mathematical mistakes and their significance. Among other things, the
estimate should be grounded in a historical record of cost estimating
and actual experiences on comparable programs;
OFDT performance: Substantially met.
Characteristic: Comprehensive;
Feature: The cost estimates should include both government and
contractor costs over the program's full life cycle, from the
inception of the program through design, development, deployment, and
operation and maintenance to retirement. They should also provide an
appropriate level of detail to ensure that cost elements are neither
omitted nor double counted and include documentation of all cost-
influencing ground rules and assumptions;
OFDT performance: Substantially met.
Characteristic: Well-documented;
Feature: The cost estimates should have clearly defined purposes and
be supported by documented descriptions of key program or system
characteristics. Additionally, they should capture in writing such
things as the source data used and their significance, the
calculations performed and their results, and the rationale for
choosing a particular estimating method. Moreover, this information
should be captured in such a way that the data used to derive the
estimate can be traced back to, and verified against, their sources.
The final cost estimate should be reviewed and accepted by management;
OFDT performance: Partially met.
Characteristic: Credible;
Feature: The cost estimates should discuss any limitations in the
analysis performed due to uncertainty surrounding data or assumptions.
Further, the estimates' derivation should provide for varying any
major assumptions and recalculating outcomes based on sensitivity
analyses, and their associated risks/uncertainty should be disclosed.
Also, the estimates should be verified based on cross-checks using
other estimating methods and by comparing the results with independent
cost estimates;
OFDT performance: Partially met
Source: GAO analysis.
[End of table]
Objective 2 - OFDT's cost estimating methods substantially met
characteristics for accuracy:
Consistent with best practices, OFDT frequently updates its cost
estimate with actual costs and accounts for program changes in its
detainee projection model and its cost estimating methods
substantially met characteristics for accuracy.
* For example, OFDT updates data on the average detainee population,
average housing and subsistence rate, and the number of individuals
charged with specific offenses on a monthly basis. It determines
differences between budget targets and actual expenditures on almost a
real-time basis. OFDT also continually adjusts its cost estimation
methodology to improve the precision and reliability of its estimates.
* As shown in table 3, OFDT's projections as reflected in the
President's budget for fiscal years 2005 through 2009 for average
housing and subsistence rates at facilities operated by private
companies or state and local governments have been within 3 percent of
actual average rates each fiscal year.
* As shown in table 4, OFDT's projections as reflected in the
President's budget for fiscal years 2008 through 2009 for ADP at
facilities operated by private companies or state and local
governments have been within 4 percent of the actual value”an
improvement in accuracy from prior fiscal years.
Objective 2 - OFDT's average housing and subsistence rate projections
have been accurate within 3 percent each year:
Table 3: Average Projected and Actual Housing and Subsistence Rates
for USMS Detainees in Facilities Operated by Private Companies or
State and Local Governments (dollars in millions):
Fiscal year: 2005;
Projected In President's Budget: $62.9;
Actual: $61.9;
Percentage difference: 1.61%.
Fiscal year: 2006;
Projected In President's Budget: $63.4;
Actual: $62.7;
Percentage difference: 0.97%.
Fiscal year: 2007;
Projected In President's Budget: $64.7;
Actual: $64.4;
Percentage difference: 0.53%.
Fiscal year: 2008;
Projected In President's Budget: $69.4;
Actual: $67.5;
Percentage difference: 2.85%.
Fiscal year: 2009;
Projected In President's Budget: $67.4;
Actual: $69.0;
Percentage difference: -2.33%.
Source: GAO analysis of OFDT data and President's Budget.
[End of table]
Objective 2 - OFDT's detainee population projections since 2006 have
been accurate:
Table 4: Average Projected and Actual USMS Detainee Population in
Facilities Operated by Private Companies or State and Local
Governments:
Fiscal year:
Projected In President's Budget Actual Percentage difference
Fiscal year: 2005;
Projected In President's Budget: 37,197;
Actual: 41,780;
Percentage difference: -11%.
Fiscal year: 2006;
Projected In President's Budget: 48,558;
Actual: 44,515;
Percentage difference: 9.08%.
Fiscal year: 2007;
Projected In President's Budget: 49,870;
Actual: 43,813;
Percentage difference: 13.8%.
Fiscal year: 2008;
Projected In President's Budget: 46,050;
Actual: 44,254;
Percentage difference: 4.06%.
Fiscal year: 2009;
Projected In President's Budget: 46,337;
Actual: 46,373;
Percentage difference: -0.08%.
Source: GAO analysis of OFDT data and President's Budget.
[End of table]
Objective 2 - OFDT's cost estimating methods substantially met
characteristics for accuracy:
OFDT's cost estimates are based on a methodology that generally
follows the 12-step best practices for cost estimation; however, high-
quality cost estimates usually fall within a range of possible costs,
illustrating variance across best and worst case scenarios.
OFDT does not formally conduct risk-based analyses of how its
estimates may be affected by the uncertainty of external factors. Such
factors include:
* changes in the number of persons arrested and charged by specific
offense category,
* evolving law enforcement policies or prosecutorial priorities of
U.S. Attorneys,
* the time it takes to process court cases, and,
* BOP's capacity to accept detainees once they have been sentenced to
federal facilities.
Objective 2 - OFDT's cost estimating methods substantially met
characteristics for accuracy:
An analysis that considers these uncertainties would indicate the
chances that actual costs could differ from the cost estimate. It
would also provide a range of how high or low costs could be,
depending on events.
Since an uncertainty analysis provides a range of costs that span best
and worst case spreads, best practice suggests that it is better for
decision makers to know the range of potential costs that surround an
estimate and the reasons that drive the range rather than just having
a point estimate from which to make their decision.
While not required by DOJ, such a risk-based analysis would provide a
more comprehensive picture of likely costs and the confidence levels
associated with any estimate.
Objective 2 - OFDT's cost estimating methods substantially met
characteristics for being comprehensive:
OFDT relies on current and prior years' actual costs to ensure that
each year's cost estimate neither double-counts nor omits costs. OFDT
investigates any anomalies between its budget requests to DOJ and
actual expenditures to identify estimation problems that can be
corrected in the current year's budget formulation, and its cost
estimating methods substantially met characteristics for being
comprehensive.
* However, OFDT does not provide a standardized dictionary that
defines each of the cost elements that comprise its major cost
categories. Defining each cost element would allow OFDT to track
specific cost elements and better identify when major cost categories
may run higher than anticipated.
* OFDT's cost estimation model contains many assumptions. For
instance, the model assumes that historical trends are good predictors
of future events. The model also makes assumptions about increases in
housing and subsistence rates and how inflation will affect cost items
such as health and transportation services. However, OFDT does not
assess the risks associated with each of these assumptions. Such an
assessment of these risks would provide a level of confidence
associated with its cost estimates.
Objective 2 - OFDT's cost estimating methods partially met
characteristics for being well-documented:
Consistent with best practices, OFDT clearly defined the purpose of
its cost estimates, and its calculations and results partially met
characteristics for being well-documented.
* We reviewed the President's Budget for OFDT, as well as the
associated detainee population model, and found that OFDT officials
had documented the formulas they used to calculate cost elements in
the model. OFDT has also well-documented the data sources used in its
model and the rationale for the type of estimation method used.
* However, OFDT officials also acknowledged that some of the more
technical aspects of OFDT's detainee projection model were fully
understood only by the individual who ran the model. For example, OFDT
made changes to its model to reflect the greater emphasis being placed
on arresting and prosecuting individuals charged with immigration
offenses. However, OFDT could not provide us with a document that
explained in detail what these changes were. Best practices include
providing enough detail so that the documentation serves as an audit
trail to allow for clear tracking of cost estimates over time.
* Documenting all steps for developing its cost estimate would better
position OFDT to recreate its estimates in the event of attrition
within its budget office among those who have developed initial cost
estimates.
Objective 2 - OFDT's cost estimating methods partially met
characteristics for credibility:
OFDT monitors key changes in detention population and average housing
and subsistence rates and documents these changes for OFDT leadership,
and its cost estimating methods partially met characteristics for
credibility.
* Consistent with best practices, OFDT has performed sensitivity
analyses that show how changes in the number of persons charged with
drug, weapons, or immigration offenses will affect the length of
detention and thus the average daily population of detainees. OFDT
presented this analysis for the first time in its fiscal year 2011
President's Budget.
* However, OFDT does not perform sensitivity analyses on other
important cost drivers such as average housing and subsistence rates
or assumptions that affect the size of the detainee population, such
as changes in laws or policies.
* OFDT states that it performs cross-checks and validates its cost
estimates by using actual costs as benchmarks. However, OFDT did not
provide us with any specific documents to indicate that it performs
these actions.
Objective 3 - What factors contributed to OFDT's need for funds in
excess of its appropriation in recent years and what actions, if any,
has OFDT taken to better account for these factors in its annual
budget estimations?
In each of the years in which OFDT needed funds in excess of its
appropriation, OFDT and DOJ officials attributed the primary cause to
the following:
In 2005: Unanticipated increases in the detainee population.
In 2008: Lack of sufficient financial reserves, which resulted from a
$145 million rescission of unobligated balances at the end of fiscal
year 2007.[Footnote 15]
In 2009: Increases in average detainee housing and subsistence rates
because more detainees were housed in private detention facilities,
which”on average”tend to have higher rates than state and local
facilities.
However, OFDT officials also explained that the following factors
consistently complicate their modeling in any fiscal year:
* unpredictable increases in law enforcement activity, particularly
immigration-related enforcement and arrests by the Department of
Homeland Security (DHS) at the Southwest Border;
* the lack of financial reserves at the end of the fiscal year to
cover any unexpected increases in costs in a subsequent year; and;
* difficulty quantifying the effect of any single factor, such as
length of detention, increases in arrests for certain offenses, or
housing and subsistence cost changes, because the various factors that
affect costs often occur concurrently.
Given that the detainee population is the most significant driver of
OFDT's costs, OFDT states that it has begun to adjust its detainee
projection model to reflect the greater number of individuals charged
with immigration offenses. However, because OFDT's costs exceed $1
billion, even a small difference between projected and actual cost
drivers, such as the detainee population, could result in OFDT's need
for funding in excess of its appropriation by tens of millions of
dollars.
Objective 3 - Factors contributing to OFDT's need for funds in excess
of its appropriation:
Unpredictable Increases in Law Enforcement Activity:
For example, OFDT states that in fiscal year 2009, a DHS initiative to
increase immigration enforcement in Southwest Border states, known as
Operation Streamline, significantly increased the number of
individuals arrested and charged with immigration offenses above what
OFDT projected.
* Between fiscal year 2008 and 2009, 161,720 individuals were charged
with immigration offenses.[Footnote 16] This total is almost 60
percent greater than between fiscal year 2006 and fiscal year 2007.
* In fiscal year 2009, the number of individuals charged with
immigration offenses accounted for 40 percent of all USMS detainees”
compared to 32 percent in fiscal year 2007.
Lack of Financial Reserves:
Both OFDT and DOJ officials stated that, to avoid the need for funding
in excess of its appropriation, it would benefit OFDT to carry a
balance at the end of each fiscal year. Officials agreed that a
carryover balance between $20 million and $30 million would provide
sufficient cushion to cover unexpected or increased costs in federal
detention activities for up to 10 days. As shown in Table 5, in each
year since fiscal year 2005 that OFDT has needed funds in excess of
its appropriation, its financial balance at the beginning of the
fiscal year was less than $5 million. For example:
* OFDT began fiscal year 2008 with a carryover balance from fiscal
year 2007 of $137.7 million; however, Congress eliminated this
balance, plus additional money, through a rescission of $145 million.
[Footnote 17]
* Additionally, the amount enacted in OFDT's fiscal year 2008
appropriation was about $69 million less than what the President
Budget's requested for OFDT. Congress later provided $20 million in
supplemental funds for fiscal year 2008.
* OFDT ended fiscal year 2008 with $3.4 million in carryover funds, an
amount that OFDT officials said was too low to account for the
increased costs in federal detention activities in fiscal year 2009.
Table 5: OFDT Expenditures, Financial Reserves at the Start of the
Fiscal Year, and Funding in Excess of Appropriations (dollars in
thousands):
Fiscal year: 2005;
OFDT expenditures: $1,042,636;
Financial reserve from prior fiscal year carryover: $4,662;
Funding received In excess of appropriation: $184,000.
Fiscal year: 2006;
OFDT expenditures: $1,126,567;
Financial reserve from prior fiscal year carryover: $30,207;
Funding received In excess of appropriation: 0.
Fiscal year: 2007;
OFDT expenditures: $1,181,290;
Financial reserve from prior fiscal year carryover: $85,576;
Funding received In excess of appropriation: 0.
Fiscal year: 2008;
OFDT expenditures: $1,256,753;
Financial reserve from prior fiscal year carryover: O[A];
Funding received In excess of appropriation: $20,000.
Fiscal year: 2009;
OFDT expenditures: $1,353,682;
Financial reserve from prior fiscal year carryover: $3,431;
Funding received In excess of appropriation: $60,000.
Source: GAO analysis of OFDT data.
[A] The actual carryover amount was $137.7 million, but this amount
was eliminated via a $145 million rescission included in OFDT's fiscal
year 2008 appropriation.
[End of table]
Difficulty Quantifying the Effect of Any Single Factor:
OFDT and DOJ officials both stated that it is difficult to quantify
the effect of a specific event or initiative, such as Operation
Streamline, on OFDT's costs. For instance,
* A law enforcement official stationed in a location participating in
Operation Streamline may actually operate in another location and make
an immigration arrest that is unaffiliated with Operation Streamline.
* Some individuals arrested and charged under Operation Streamline may
have been previously charged with other offenses, such as gun or drug-
related crimes. According to an OFDT official, these individuals
probably would be prosecuted on these charges, rather than for
immigration offenses.
Further, detention costs are also affected by the judicial system. For
instance, a backlog at a court may increase detention time, or a judge
may request that a detainee be placed at a higher-cost detention
facility that is closer to the court.
The Detainee Population Is the Most Significant Cost Driver:
Most of the increases in OFDT's costs have occurred in its Detainee
Housing and Subsistence cost category, although other cost categories
have also experienced significant cost increases within a given year.
* Detainee housing and subsistence accounted for $82 million of the
total $97 million increase in OFDT's total program costs in fiscal
year 2009, and about two-thirds of that rise is directly attributable
to an increase in the number of detainees that year. About half of the
remaining increase in total program costs came from prisoner
transportation, which in fiscal year 2009 rose 35 percent over the
previous year.
* Detainee housing and subsistence accounted for $65.6 million of the
total $75.4 million increase in OFDT's total program costs in fiscal
year 2008. Over half of the remaining increase in total program costs
came from the cost category "Other," which included services such as
meals while prisoners are traveling to judicial proceedings.
OFDT Is Adjusting Its Model to Better Predict Costs by:
* Increasing projections for the number of detainees charged with
immigration offenses. However, because detainees charged with
immigration offenses tend to be detained on average for half the time
of detainees who are charged with federal weapons or drug offenses, an
increase in the number of individuals charged with immigration
offenses would not necessarily increase the total average daily
population. The effect on average daily population would depend on
other factors such as the size of the increase in the number of those
charged with immigration offenses and the proportion of detainees
charged with other types of offenses.
* Using leading indicators. OFDT is now employing variables, such as
increases in the number of law enforcement personnel or assistant U.S.
attorneys in a judicial district, as leading indicators of where the
arrests will be and where detainees will need to be housed in the
future; however, as noted, law enforcement officials may not always
operate where they were hired.
* Monitoring space at state and local facilities. OFDT is now closely
monitoring the available bed space at state and local detention
facilities. An increase in the number of state and local inmates has
diminished the space available for federal detainees at these
facilities. As a result, OFDT and USMS have begun to use more private
facilities to house federal detainees. Private facilities tend on
average to have higher housing and subsistence rates than state and
local facilities.
Small Differences between Projections and Actual Figures Can
Significantly Affect Costs:
OFDT's budget is approximately $1.4 billion. As a result, even when
the projections for OFDT in the President's Budget are close to the
program's actual costs within a few percentage points, the differences
in dollars are significant:
* In fiscal year 2009, as shown in table 6, although OFDT's estimates
in the President's Budget of detainee population and average housing
and subsistence rate were both within 2.5 percent of the actual
values, its costs for housing and subsistence were $46.4 million
higher than appropriated funding.
* In fiscal year 2008, as shown in table 7, although OFDT's estimates
in the President's Budget of detainee population and average housing
and subsistence rate were both within 4 percent of the actual values,
its costs for housing and subsistence were $35.5 million lower than
appropriated funding.[Footnote 18]
Objective 3 - Small percentage differences in estimates result in
large dollar differences in costs:
Table 6: Comparison of Projected and Actual Costs, Fiscal Year 2009
(dollars in thousands):
Statistic or cost category: Average daily detainee population at
facilities operated by private companies or state and local
governments;
Difference between values projected in President's Budget submission
and actual values: -0.08%[A].
Statistic or cost category: Average housing and subsistence rate at
facilities operated by private companies or state and local
governments;
Difference between values projected in President's Budget submission
and actual values: -2.33%.
Statistic or cost category: Housing and subsistence costs;
Difference between values projected in President's Budget submission
and actual values: -$46.4 million.
Source: GAO analysis of OFDT data and President's Budget.
[A] Negative values denote that OFDT's projection in the President's
Budget underestimated the actual value.
[End of table]
Table 7: Comparison of Projected and Actual Costs, Fiscal Year 2008
(dollars in thousands):
Statistic or cost category: Average daily detainee population at
facilities operated by private companies or state and local
governments;
Difference between values projected in President's Budget submission
and actual values: 4%.
Statistic or cost category: Average housing and subsistence rate at
facilities operated by private companies or state and local
governments;
Difference between values projected in President's Budget submission
and actual values: 2.85%.
Statistic or cost category: Housing and subsistence costs;
Difference between values projected in President's Budget submission
and actual values: $35.5 million.
Source: GAO analysis of OFDT data and President's Budget.
Note: Positive values denote that OFDTs projection in the President's
Budget overestimated the actual value.
[End of table]
[End of section]
Conclusions:
OFDT's methods for estimating costs follow many of GAO's best
practices and substantially meet the characteristics of accurate and
comprehensive cost estimates. However, even if OFDT underestimates
costs by a small percentage, this could mean program costs exceed
OFDT's appropriations by tens of millions of dollars. OFDT has limited
ability to cut services, reduce costs, or draw on other accounts in
response to such unforeseen increases in detention housing and
subsistence costs because:
* it is required to cover costs associated with housing and
transporting all USMS detainees, and;
* housing and subsistence expenses comprise approximately 90 percent
of OFDT's costs.
As a result, OFDT is susceptible to needing more funding to pay for
unanticipated cost increases.
To further improve its cost estimation practices, OFDT could:
* More fully document the assumptions and calculations that it employs
in its USMS detainee projection model. By improving documentation of
all steps for developing its cost estimate, OFDT would be better
positioned to recreate its estimates in the event of attrition within
its budget office among those who have developed initial cost
estimates.
* Conduct an uncertainty analysis to quantify how likely various
scenarios are to occur. If OFDT provided this information to DOJ, DOJ
could more fully understand the range of potential costs”and the
potential need for more funding”if estimating assumptions for key cost
drivers, such as detainee population growth, do not hold true.
[End of section]
Recommendations for Executive Action:
To improve OFDT's cost estimation process, we are recommending that
the Attorney General instruct the Federal Detention Trustee to take
the following two actions:
1. Improve documentation of calculations used to (a) project the
number of USMS detainees and (b) estimate program costs.
2. Quantify the extent to which its costs could vary due to changes in
key cost assumptions-”and submit a risk-adjusted cost estimate, along
with an associated confidence level and corresponding budget
documentation-”to DOJ to facilitate decision making.
[End of section]
Agency Comments:
We provided a draft of these briefing slides to the Department of
Justice (DOJ), OFDT, and USMS for review and comment. In an e-mail
received on September 24, 2010, DOJ concurred with the recommendations
in our report and did not provide written comments to include in this
report. DOJ also provided technical comments which we incorporated as
appropriate.
[End of section]
Appendix I: GAO's Twelve Step Cost Estimating Practices:
Initiation and research:
Your audience, what you are estimating, and why you are estimating it
are of the utmost importance:
Define the estimate's purpose;
Develop the estimating plan.
Assessment:
Cost assessment steps are iterative and can be accomplished in varying
order or concurrently:
Define the program;
Obtain the data;
Determine the estimating structure;
Identify ground rules and assumptions;
Develop the point estimate and compare it to an independent cost
estimate.
Analysis:
The confidence in the point or range of the estimate is crucial to the
decision maker:
Conduct sensitivity analysis;
Conduct a risk and uncertainty analysis;
Document the estimate.
Presentation:
Documentation and presentation make or break a cost estimating
decision outcome:
Present estimate to management for approval;
Update the estimate to reflect actual costs/changes.
Analysis, presentation, and updating the estimate steps can lead to
repeating previous assessment steps.
Source: GAO.
[End of section]
Footnotes:
[1] Pub. L. No. 106-553, 114 Stat. 2762, 2762A-52 (2000)
(appropriating funds to establish a Federal Detention Trustee).
[2] Pub. L. No. 109-13, 119 Stat. 231, 270 (2005).
[3] A transfer shifts all or part of the budget authority in one fund
account to another. DOJ's Assets Forfeiture Fund is an account that
receives proceeds from assets forfeited and can be used, for example,
to pay for property seizure and detention costs.
[4] Pub. L. No. 111-32, 123 Stat. 1859, 1860 (2009).
[5] H.R. Rep. No. 111-366, at 662 (2009) (Conf. Rep.).
[6] Office of Management and Budget, Preparation, Submission, and
Execution of the Budget, Circular No. A-11 (Washington, D.C.:
Executive Office of the President, June 2008).
[7] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for
Developing and Managing Capital Program Costs, [hyperlink,
http://www.gao.gov/products/GA0-09-3SP] (Washington, D.C.: March 2009).
[8] For more information on our scope and methodology, see slides 32-
35 and 42.
[9] JPATS transports sentenced prisoners who are in BOP's custody, as
well as criminal/administrative aliens in the custody of the
Department of Homeland Security's (DHS) Immigration and Customs
Enforcement (ICE), to hearings, court appearances, and detention
facilities.
[10] Accounts for costs of guarding detainees who obtain medical care
outside a detention facility.
[11] Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, 123
Stat. 3034, 3123 (2009).
[12] Once a state or local jail receives an OFDT rate review, the jail
may not request another review for at least 3 years.
[13] The nine offense categories are: violent crime, property crime,
drug offenses, weapons offenses, immigration offenses, other new
offenses, supervision violations, material witness violations, and not
reported offenses.
[14] See appendix I for a description of these cost estimating
practices.
[15] A rescission is legislation enacted by Congress that cancels the
availability of budgetary authority previously enacted before the
authority would otherwise expire. See GAO, A Glossary of Terms Used in
the Federal Budget Process, GA0-05-7345P (Washington, D.C.: September
2005).
[16] A portion of those charged with immigration offenses in fiscal
year 2008 were detained during fiscal year 2009.
[17] Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, 121
Stat. 1844,1936 (2007).
[18] Even though the President's Budget request for OFDT overestimated
costs in fiscal year 2008, OFDT still experienced the need for
additional funding to sustain its operations because $145 million was
rescinded by the fiscal year 2008 appropriations act.
[End of section]
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