Tuesday, April 9, 1996

GOMEZ RESPONDS TO PIA AUDIT

Corrections Director James H. Gomez today took issue with findings of a Prison Industry Authority (PIA) audit by the Bureau of State Audits (BSA).

"While the audit offered some helpful recommendations to improve PIA's fiscal management, it uses the wrong yardstick to measure PIA's mission and accomplishments," said Gomez, who is also chairman of the 11-member Prison Industry Board (PIB) that oversees PIA.

"PIA is a unique blend of public and private interests. The true measure of its success is against similar prison industry programs across the nation. In this arena, PIA compares very favorably."

"Instead, the State Auditor made up its own rules to define self sufficiency-- attributing to PIA interest cost it does not incur," said Gomez. "Unfortunately, these rules aren't based on legislative intent, on practices of comparable prison programs, or on generally accepted accounting principles."

"The Bureau of State Audits succumbs to the very inconsistency it attributes to PIA," said Gomez. "First it declares that PIA is a state program; then it compares PIA's performance against private industry standards."

"PIA is doing an excellent job of fulfilling its primary mission--productively employing state prison inmates in a self-sufficient program," Gomez continued. "PIA's inmate employment has grown 117 percent in the last ten years. Furthermore, it has made significant strides in resolving some of the deficiencies pointed out in the audit."

Gomez pointed to numerous PIA accomplishments and innovations:

Increased efficiency. The number of PIA free staff has declined while profits and sales have increased steadily.

Debt reduction. Long-term debt dropped from $13 million to $3.6 million in the last five years.

Automation. Successfully implemented a sophisticated information and accounting system, as noted in the audit.

Improved quality. Using Total Quality Management business process, concentrated on setting quality goals and meeting product standards.

Customer satisfaction. Now guarantees delivery of the most popular furniture items anywhere in the state within 20 days--an accomplishment documented in the audit.

Innovative programs. PIA's highly successful recycling/waste management program has reduced the City of Folsom's waste stream by 55 percent.

Innovative products. Obtained four patents for its Century 2000 modular office system.

Gomez also criticized the audit's findings relating to the Prison Industry Board, charging that it "levels sweeping criticism at PIB" without interviewing the Chairman or interested parties, reviewing pertinent documents, or even attending a PIB meeting.

"Despite the audit's major flaws," said Gomez, "many of its specific recommendations are in line with PIA goals for improvement. I will be working with PIA and the Prison Industry Board to ensure that the progress made to date continues into the next century."