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Report to Congressional Committees: 

United States Government Accountability Office: 
GAO: 

November 2009: 

Bureau Of Prisons: 

Methods for Cost Estimation Largely Reflect Best Practices, but 
Quantifying Risks Would Enhance Decision Making: 

GAO-10-94: 

GAO Highlights: 

Highlights of GAO-10-94, a report to congressional committees. 

Why GAO Did This Study: 

The Department of Justiceís (DOJ) Federal Bureau of Prisons (BOP) is 
responsible for the custody and care of about 209,000 federal inmatesóa 
population which has grown by 44 percent over the last decade. In 
fiscal years 2008 and 2009, the President requested additional funding 
for BOP because costs for key operations were at risk of exceeding 
appropriated funding levels. GAO was congressionally directed to 
examine (1) how BOP estimates costs when developing its annual budget 
request to DOJ; (2) the extent to which BOPís methods for estimating 
costs follow established best practices; and (3) the extent to which 
BOPís costs for key operations exceeded requested funding levels 
identified in the Presidentís budget in recent years, and how this has 
affected BOPís ability to manage its growing inmate population. In 
conducting our work, GAO analyzed BOP budget documents, interviewed BOP 
and DOJ officials, and compared BOPís cost estimation documentation to 
criteria in GAOís Cost Estimating and Assessment Guide. 

What GAO Found: 

BOP uses three general steps to estimate costs for its annual budget 
submission: (1) estimating cost increases to maintain service levels, 
such as inmate medical care and utilities; (2) projecting inmate 
population changes for the budget year and for several years into the 
future using a modeling program that incorporates data on the current 
inmate population and estimated incoming population and associated 
sentences; and (3) estimating costs to both provide additional capacity 
to house projected inmate population growth and implement new programs, 
such as activating new prisons. 

BOPís methods for cost estimation largely reflect best practices 
outlined in GAOís Cost Estimating and Assessment Guide. BOP followed a 
well-defined process for developing a mostly comprehensive, well 
documented, accurate, and credible cost estimate for fiscal year 2008. 
For example, BOP used relevant historical cost data and considered 
adjustments for general inflation when estimating costs for its budget 
request to DOJ. Moreover, BOPís methods for projecting inmate 
population changes were accurate, on average, to within 1 percent of 
the actual inmate population growth from fiscal year 1999 to August 
2009. Still, BOP could strengthen its methods in two ways. First, BOP 
has not quantified the level of confidence associated with its cost 
estimate. While not required by the Office of Management and Budget or 
DOJ, conducting an uncertainty analysis of this kind is a best 
practice. By providing the results of such analysis to DOJ, BOP 
officials could share advance information on the probability and 
associated risks of operating expenses exceeding enacted funding 
levels. Second, during our review of documentation for BOPís fiscal 
year 2008 cost estimate, in some cases we required the guidance of BOP 
budget analysts to identify backup support because the documentation 
was insufficient to allow someone unfamiliar with the budget to locate 
detailed corroborating data. By documenting all steps, BOP would be 
better positioned to recreate its budget cost estimates in the event of 
attrition among those who initially developed them. 

According to BOP, from fiscal years 2004 through 2008, costs for non-
salary inmate medical care and utilities exceeded funding levels in the 
Presidentís budget request by about $131 million and $55 million, 
respectively. As a result, BOP has faced funding gaps in its operations 
account that has left it with limited flexibility to manage its 
continually growing inmate population. 

Figure: Federal Inmate Population, Fiscal Years 2000 to 2009: 

[Refer to PDF for image: line graph] 

Fiscal year: 2000; 
Inmate Population: 145,125. 

Fiscal year: 2001; 
Inmate Population: 156,572. 

Fiscal year: 2002; 
Inmate Population: 163,436. 

Fiscal year: 2003; 
Inmate Population: 172,499. 

Fiscal year: 2004; 
Inmate Population: 179,895. 

Fiscal year: 2005; 
Inmate Population: 187,394. 

Fiscal year: 2006; 
Inmate Population: 192,584. 

Fiscal year: 2007; 
Inmate Population: 200,020. 

Fiscal year: 2008; 
Inmate Population: 201,668. 

Fiscal year: 2009; 
Inmate Population: 209,027. 

Source: GAO analysis of BOP data. 

[End of figure] 

What GAO Recommends: 

GAO recommends that BOP (1) conduct an uncertainty analysis quantifying 
the extent to which its operational costs could vary due to changes in 
key cost assumptions and submit the results, along with budget 
documentation, to DOJ; and (2) improve documentation of calculations 
used to estimate its costs. BOP agreed with GAOís recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-10-94] or key 
components. For more information, contact David C. Maurer at (202) 512-
9627 or maurerd@gao.gov. 

[End of section] 

Contents: 

Letter: 

BOP Estimates Costs for Its Annual Budget Using Three General Steps: 

BOP's Methods for Estimating Costs Largely Reflect Best Practices: 

Costs for Key Operations Have Exceeded the Funding Levels Requested in 
the President's Budget in Recent Years: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Briefing Slides to Congressional Staff: 

Appendix II: Comments from the Department of Justice, Federal Bureau of 
Prisons: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Comparison of BOP's Average Annual Rate of Cost Growth Due to 
Inflation and Inmate Population Growth and Average Annual Funding in 
President's Budget Request for BOP, Fiscal Years 2004 through 2008: 

Figure: 

Figure 1: Federal Inmate Population Growth, Fiscal Years 2000 through 
2009: 

Abbreviations: 

B&F: Buildings and Facilities: 

BOP: Federal Bureau of Prisons: 

DOJ: Department of Justice: 

M&R: Maintenance and Repair: 

OMB: Office of Management and Budget: 

S&E: Salaries and Expenses: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

November 10, 2009: 

The Honorable Barbara Mikulski: 
Chairman: 
The Honorable Richard Shelby: 
Ranking Member: 
Subcommittee on Commerce, Justice, Science, and Related Agencies: 
Committee on Appropriations: 
United States Senate: 

The Honorable Alan B. Mollohan: 
Chairman: 
The Honorable Frank R. Wolf: 
Ranking Member: 
Subcommittee on Commerce, Justice, Science, and Related Agencies: 
Committee on Appropriations: 
House of Representatives: 

The Department of Justice's (DOJ) Federal Bureau of Prisons' (BOP) 
mission is to protect society by confining offenders in the controlled 
environments of prisons and community-based facilities that are safe, 
humane, cost-efficient, and appropriately secure. As of October 1, 
2009, BOP was responsible for overseeing a total federal inmate 
population of approximately 209,000--a population which has grown by 44 
percent since fiscal year 2000.[Footnote 1] In recent years, BOP has 
faced challenges in meeting its operational workload responsibilities 
to manage this growth. In fiscal year 2008, DOJ reported to the Office 
of Management and Budget (OMB) that BOP would be unable to operate at 
the funding levels in its appropriation because costs for key 
operations were at risk of exceeding appropriated funding levels. BOP 
reported that it again anticipated a funding gap in fiscal year 2009, 
and in response, Congress provided appropriations above the amount 
requested in the President's budget. 

This report responds to congressional direction in the explanatory 
statement accompanying the Omnibus Appropriations Act, 2009.[Footnote 
2] In accordance with this explanatory statement, and in consultation 
with the House and Senate Appropriations Committee staff, we are 
reporting on BOP's methods for cost estimation, including the pricing 
of utilities and inmate medical care costs. Specifically, we address 
issues pertaining to (1) how BOP estimates costs when developing its 
annual budget request to DOJ; (2) the extent to which BOP's methods for 
estimating costs follow established best practices or guidelines; and 
(3) the extent to which BOP's costs for key operations exceeded 
requested funding levels identified in the President's budget in recent 
years, and how this has affected BOP's ability to manage its growing 
inmate population. On September 10, 2009, we provided a briefing to 
staff of the House and Senate Appropriations Subcommittees on Commerce, 
Justice, Science, and Related Agencies. Prior to this briefing, we 
provided a draft of the briefing to responsible DOJ and BOP officials, 
who generally agreed with our findings. This report (1) provides a 
summary of our briefing and (2) transmits recommendations that we are 
making to the Attorney General of the United States. The full briefing, 
including our scope and methodology, is reprinted as appendix I. 
Written comments from DOJ are reprinted as appendix II. 

To address these objectives, we analyzed BOP documentation to obtain 
information on the guidelines and processes BOP used to estimate costs 
in its annual budget submission, including annual DOJ and BOP budget 
development guidelines and memorandum and OMB's Circular A-11[Footnote 
3]. We also analyzed available documentation, such as the formulas BOP 
used to compute its fiscal year 2008 budget cost estimate, and compared 
the documentation BOP used to develop its fiscal year 2008 budget cost 
estimate to criteria for cost estimating best practices identified in 
GAO's Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Cost[Footnote 4]s. 
Additionally, we reviewed BOP documentation of operations costs for 
inmate medical care and utilities and compared these costs to the 
amount of funding requested in the President's annual budget submission 
to Congress for BOP (known as the President's budget). Finally, we 
interviewed cognizant BOP and DOJ budget development officials to 
obtain information about BOP's budget cost estimating methods and the 
factors contributing to BOP's operational costs exceeding funding 
levels, and how this has affected BOP's ability to manage its growing 
inmate population. Through document reviews and interviews with agency 
officials knowledgeable about controls in place to maintain the 
integrity of BOP cost and inmate population data that BOP reported 
using to estimate costs for its annual budget submission to DOJ, we 
determined that the data were sufficiently reliable for the purposes of 
this report. 

We conducted this performance audit from May 2009 to November 2009 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. 

BOP Estimates Costs for Its Annual Budget Using Three General Steps: 

When developing its annual budget submission, BOP uses three general 
steps to estimate costs for its two budget accounts--the Salaries and 
Expenses account (known as its operational budget) and its Buildings 
and Facilities account.[Footnote 5] First, BOP estimates cost increases 
for maintaining the current level of services for operations as 
provided in the prior year's enacted budget.[Footnote 6] These include 
costs to address mandatory staff pay raises and benefit increases, 
inmate medical care, and utilities. BOP primarily analyzes historical 
obligations from the past five years to identify average annual 
operating cost increases. BOP also considers economic indicator 
information to estimate general inflationary cost increases, using data 
from the Bureau of Labor Statistics Consumer Price Index, among other 
sources. 

Second, BOP projects inmate population changes for the budget year and 
for several years into the future. BOP uses a modeling program that 
identifies each inmate as a unique record tied to variables such as 
conviction year, sentence term, and conviction type, with data obtained 
from a variety of sources, including the Administrative Office of the 
U.S. Courts, the U.S. Sentencing Commission, and the Executive Office 
for U.S. Attorneys. The model identifies the number of inmates 
currently in BOP's system and the length of those inmates' sentences, 
as well as the number of inmates estimated to enter the BOP system and 
the length of their sentences. For example, for the fiscal year 2010 
annual budget submission, BOP projected a net growth in its inmate 
population of 4,500 inmates. 

Third, BOP estimates costs to both house the projected number of new 
inmates, including building and facility requirements, and fund any new 
initiatives. According to BOP, a rising inmate population is the 
primary driver of new service costs (see figure 1 for graph showing 
federal inmate population growth from fiscal years 2000 through 2009). 
Thus, for any budget year, BOP uses inmate population projections to 
determine the necessary bedspace to house additional inmates. BOP 
estimates these associated incarceration costs by (1) determining how 
to distribute the incoming prisoners across newly activated facilities, 
existing facilities, or contract facilities; and (2) calculating 
staffing and other operational costs to manage the additional inmates 
at its facilities. BOP also identifies and estimates costs for new 
initiatives, such as the activation of a new BOP facility, by reviewing 
the proposals submitted by its divisions and regional offices, as well 
as historical data on costs for implementing such initiatives. 

Figure 1: Federal Inmate Population Growth, Fiscal Years 2000 through 
2009: 

[Refer to PDF for image: line graph] 

Fiscal year: 2000; 
Inmate Population: 145,125. 

Fiscal year: 2001; 
Inmate Population: 156,572. 

Fiscal year: 2002; 
Inmate Population: 163,436. 

Fiscal year: 2003; 
Inmate Population: 172,499. 

Fiscal year: 2004; 
Inmate Population: 179,895. 

Fiscal year: 2005; 
Inmate Population: 187,394. 

Fiscal year: 2006; 
Inmate Population: 192,584. 

Fiscal year: 2007; 
Inmate Population: 200,020. 

Fiscal year: 2008; 
Inmate Population: 201,668. 

Fiscal year: 2009; 
Inmate Population: 209,027. 

Source: GAO analysis of BOP data. 

[End of figure] 

For its Buildings and Facilities account, BOP identifies new program 
costs associated with new construction and maintenance and repair of 
existing facilities. Using its long-term inmate population projections, 
BOP considers new construction proposals based on need, funding, and 
the anticipated speed of construction. BOP estimates construction costs 
largely by using analogous building costs for similar security level 
facilities, as well as considering assumptions, such as the rate of 
inflation and when potential construction would begin. BOP ranks 
maintenance and repair proposals by assigning safety the highest 
priority and estimates costs based on information it obtains from a 
construction cost estimation company. 

BOP's Methods for Estimating Costs Largely Reflect Best Practices: 

BOP's methods for estimating costs in its annual budget requests to DOJ 
largely reflect the best practices outlined in GAO's Cost Estimating 
and Assessment Guide. Specifically, BOP followed a well-defined process 
for developing a mostly comprehensive, well documented, accurate, and 
credible cost estimate for fiscal year 2008.[Footnote 7] For example, 
BOP used relevant historical cost data and considered adjustments for 
general inflation when estimating costs for its budget request to DOJ. 
Moreover, BOP's methods for projecting inmate population changes have 
been largely accurate. For example, we found BOP's projections were 
accurate, on average, to within 1 percent of the actual inmate 
population growth from fiscal year 1999 through August 20, 2009. 

We identified two areas where BOP could strengthen its methods for 
estimating costs in its annual budget submission. First, according to 
best practices described in GAO's Cost Estimating and Assessment Guide, 
it is better for decision makers to know the range of potential costs 
that surround an estimate and the reasons behind what drives that range 
rather than just having a point estimate from which to make their 
decision. An uncertainty analysis provides a range of costs that span a 
best and worst case spread. While not required by OMB or DOJ in annual 
budget development guidance, conducting an uncertainty analysis of this 
kind is a best practice. BOP has not conducted an uncertainty analysis, 
and therefore has not quantified the level of confidence associated 
with its cost estimate. By providing the results of such analysis to 
DOJ, BOP officials could share advance information on the probability 
and associated risks of operating expenses exceeding enacted funding 
levels--a situation BOP faced in fiscal year 2008. 

Second, during our review of documentation for BOP's fiscal year 2008 
cost estimate, we sometimes required the guidance of BOP budget 
analysts to identify backup support. This was because the documentation 
BOP provided was insufficient to allow someone unfamiliar with the 
budget to locate detailed corroborating data. For example, in reviewing 
BOP's fiscal year 2008 cost estimate for a health service initiative 
related to expanding kidney dialysis treatment for inmates, we required 
a budget official's assistance in locating supporting formulas used to 
calculate the estimate. Best practices for cost estimation include 
providing enough detail so that the documentation serves as an audit 
trail that allows for clear tracking of cost estimates over time. By 
documenting all steps for developing its budget cost estimate, BOP 
would be better positioned to recreate its estimates in the event of 
attrition within its budget office among those who developed initial 
budget cost estimates. 

In providing feedback on our initial findings, BOP budget officials 
indicated that taking these steps would strengthen their methods for 
estimating costs in their annual budget submission to DOJ. 

Costs for Key Operations Have Exceeded the Funding Levels Requested in 
the President's Budget in Recent Years: 

BOP's costs for key operations to maintain basic services, such as 
those for inmate medical care and utilities, exceeded the funding 
levels requested in the President's budget from fiscal years 2004 
through 2008, limiting BOP's ability to manage its growing inmate 
population. During this period, BOP's annual non-salary inmate medical 
care and utilities costs exceeded funding levels in the President's 
budget request by a total of about $131 million and $55 million, 
respectively, largely due to inflation and inmate population growth. 
[Footnote 8] 

* According to BOP, from fiscal years 2004 through 2008, BOP's annual 
non-salary inmate medical care costs increased by a total of about 
$146.5 million. In contrast, during this period, the President's budget 
requested funding increases for non-salary inmate medical care totaling 
approximately $15.4 million. 

* According to BOP, from fiscal years 2004 through 2008, BOP's annual 
utilities costs increased by a total of $87 million. In contrast, 
during this period, the President's budget requested funding increases 
for utilities totaling approximately $31.6 million. 

Table 1 compares BOP's rates of annual cost growth due to inflation and 
inmate population growth with the President's budget requests for 
funding for non-salary inmate medical care and utilities from fiscal 
years 2004 through 2008. 

Table 1: Comparison of BOP's Average Annual Rate of Cost Growth Due to 
Inflation and Inmate Population Growth and Average Annual Funding in 
President's Budget Request for BOP, Fiscal Years 2004 through 2008: 

Inmate medical care (non-salary): 
Average annual rate of cost growth incurred by BOP, fiscal years 2004 
through 2008: 8.7%; 
Average annual rate of funding growth in President's budget request, 
fiscal years 2004 through 2008: 0.9%. 

Utilities: 
Average annual rate of cost growth incurred by BOP, fiscal years 2004 
through 2008: 9.8%; 
Average annual rate of funding growth in President's budget request, 
fiscal years 2004 through 2008: 3.2%. 

Source: GAO analysis of BOP data. 

[End of table] 

When BOP has not received funding to cover the operational cost 
increases it has incurred, in some years it has used Salaries and 
Expenses funding planned for other areas to cover these costs. For 
example, one of BOP's highest priorities is to increase staffing levels 
of corrections officers. However, BOP officials reported using Salaries 
and Expenses account funds initially planned for hiring additional 
corrections officers in fiscal years 2008 and 2009 to instead cover 
base operations cost increases related to inmate medical care, 
utilities, and personnel salary and benefit adjustments that were 
unfunded in the President's budget requests. 

As with any other DOJ component, BOP's budget requests are governed by 
DOJ and OMB budget development guidance. For example, DOJ budget 
development guidance for fiscal years 2008 and 2009 required components 
to limit cost growth for current services to no more than 4 percent 
greater than prior year levels. DOJ reported that this guidance was a 
general instruction given to all components, but recognized that BOP is 
different because its costs are less discretionary since BOP does not 
control the number of inmates for which it must care. In this way, DOJ 
reported that it did not automatically reject budget submissions from 
BOP that exceeded the cap, but instead required BOP to submit 
substantive information to justify need. 

DOJ also reported that OMB does not automatically provide funds for 
inflationary cost increases. DOJ cited OMB policy stating that 
inflationary adjustments for discretionary costs (such as utilities) 
can include some, all, or no allowance for inflation. DOJ officials 
reported that OMB typically does not include general inflationary 
adjustments that DOJ submits on behalf of BOP. 

Nonetheless, DOJ has reported to OMB that other DOJ components could 
reduce operations, implement across-the-board hiring freezes, and 
implement policy changes that would reduce costs if faced with funding 
shortfalls similar to what BOP has faced in its operations budget. 
However, DOJ reported that BOP has already implemented significant 
reductions to programs and streamlined and centralized administrative 
functions to eliminate 2,300 positions. DOJ also reported that BOP has 
limited flexibility because almost all of BOP's operational costs are 
devoted to staff salaries and provision of services. According to BOP 
data, in fiscal years 2007 and 2008, 99.5 percent of BOP's Salaries and 
Expenses budget was fixed for its operations for paying staff salaries 
and providing services to house and care for the inmate population. 

Conclusions: 

In each of the last 2 fiscal years, BOP has needed additional funding 
to meet its operating costs for managing its growing inmate population. 
However, we found that BOP's cost estimation methods largely reflect 
GAO's cost estimating best practices. Furthermore, BOP officials 
reported, and DOJ officials acknowledged, that BOP has already 
implemented significant reductions in operations costs, such as by 
eliminating positions and centralizing administrative functions. Given 
BOP's unique responsibility for managing this population, and its 
limited discretion when costs for key operations exceed funding levels, 
it is especially important for BOP to develop accurate cost estimates 
and clearly convey to decision makers the potential risk of costs 
exceeding funding levels. 

In light of these circumstances, BOP's budget cost estimation practices 
could be strengthened in two ways. First, although BOP is not required 
to report in its annual budget submission the extent to which actual 
costs may be expected to vary from cost estimates, we have identified 
the provision of an uncertainty analysis as a best practice. If BOP 
identified its level of cost estimation confidence and 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 inmate population growth, do 
not hold true. 

Second, by improving documentation of all steps for developing its cost 
estimate, BOP would be better positioned to re-create its estimates in 
the event of attrition within its budget office among those who 
developed initial cost estimates. 

Recommendations for Executive Action: 

To improve transparency in BOP's cost estimation process, as well as 
DOJ's annual budget formulation and justification process, and to 
provide DOJ with more detailed information to consider when 
deliberating its budget proposal for BOP, we recommend that the 
Attorney General take the following two actions: 

* instruct the BOP Director to require the BOP budget staff to conduct 
an uncertainty analysis quantifying the extent to which operations 
costs could vary due to changes in key cost assumptions and submit the 
results along with budget documentation to DOJ so that DOJ could be 
aware of the range of likely costs and BOP's associated confidence 
levels; and: 

* instruct the BOP Director to require the BOP budget staff to improve 
documentation of calculations used to estimate its costs. 

Agency Comments: 

We provided a draft of this report to DOJ for its review and comment. 
The BOP Director provided written comments on this draft and concurred 
with our findings and recommendations. BOP stated that including the 
results of an uncertainty analysis in the budget document would provide 
DOJ, OMB, and Congress better context for decision making and stated 
that it would include such analysis in preparation of its 2012 budget 
submission. BOP also stated that if time permits, it would work with 
DOJ and OMB to incorporate an uncertainty analysis into the President's 
2011 budget. BOP's comments are reproduced in appendix II. 

We are sending copies of this report to the Attorney General and 
interested congressional committees. In addition, this report will be 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

Should you or your staff have any questions concerning this report, 
please contact me at (202) 512-9627 or by e-mail at 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 are listed in appendix III. 

Signed by: 

David C. Maurer: 
Director, Homeland Security and Justice Issues: 

[End of section] 

Appendix I: Briefing Slides to Congressional Staff: 

Briefing on Federal Bureau of Prisons 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; 
* Agency Comments; 
* Appendix I. 

Introduction: 

In recent years, the Department of Justiceís (DOJ) Federal Bureau of 
Prisons (BOP) has faced challenges in meeting its operational workload 
responsibilities for overseeing the federal inmate population. In 
fiscal year 2008, DOJ reported to the Office of Management and Budget 
(OMB) that BOP would be unable to operate at the funding levels in its 
appropriation because costs for key operations were at risk of 
exceeding appropriated funding levels. BOP reported that it again 
anticipated a funding gap in fiscal year 2009, and in response Congress 
provided appropriations above the amount in the Presidentís budget 
request. 

* Fiscal year 2008: BOP received a total of $296.3 million in funding 
after its initial appropriation was enacted, including $109.2 million 
transferred from other DOJ accounts, $178 million from the Supplemental 
Appropriations Act, 2008 and $9.1 million relating to the Global War on 
Terrorism in the Supplemental Appropriations Act, 2008.[Footnote 9] 

* Fiscal year 2009: BOP received a total of $160 million in funding 
above the Presidentís request through the Omnibus Appropriations Act, 
2009[Footnote 10] and $5 million through the Supplemental 
Appropriations Act, 2009.[Footnote 11] 

Objectives, Scope, and Methodology: 

Objectives: 

The explanatory statement accompanying the Omnibus Appropriations Act, 
2009 directed GAO to review BOPís methods for determining resource 
requirements.[Footnote 12] We designed our reporting objectives to 
answer the following three questions: 

1. How does BOP estimate costs when developing its annual budget 
request to DOJ? 

2. To what extent do BOPís methods for estimating costs follow 
established best practices or guidelines? 

3. To what extent have BOPís costs for key operations exceeded 
requested funding levels identified in the Presidentís budget in the 
last five fiscal years, and how has this affected BOPís ability to 
manage its growing inmate population? 

Scope and Methodology: Objective 1: 

To determine how BOP estimates costs when developing its annual budget 
request to DOJ, we: 

* analyzed BOP documentation, including budget development guidelines, 
planning documents, and memorandum to obtain information on the steps 
BOP uses to estimate costs and the information BOP considers when doing 
so; 

* reviewed OMB and DOJ budget development guidance, including OMBís 
Circular A-11 and DOJ annual budget development guidelines, to obtain 
information on federal budget formulation standards and requirements 
BOP must follow in preparing its annual budget request to DOJ,[Footnote 
13] and; 

* interviewed cognizant program officials from BOPís Administration 
Division, including senior officials from BOPís Budget Development 
Office and Capacity Planning Branch, to learn about BOPs methods for 
estimating costs. We also interviewed cognizant program officials from 
BOPís Office of Research and Evaluation to obtain information on BOPís 
methods for estimating inmate population increases. 

Scope and Methodology: Objective 2: 

To determine the extent to which BOPís methods for estimating costs 
follow established best practices or guidelines, we: 

* analyzed available documentation, including BOP's fiscal year 2008 
budget cost estimate and other relevant agency documentation, such as 
the formulas BOP used to compute its fiscal year 2008 budget cost 
estimate; 

* interviewed cognizant program officials from BOPís Administration 
Division, including the Budget Development Chief, to understand how BOP 
developed its budget cost estimates and to identify supporting budget 
development documentation; and; 

* compared the documentation BOP used to develop its fiscal year 2008 
budget cost estimate with criteria for cost estimating best practices 
identified in GAOís Cost Estimating and Assessment Guide: Best 
Practices for Developing and Managing Capital Program Costs.[Footnote 
14] 

Scope and Methodology: Objective 3: 

To determine the extent to which BOPís costs for key operations 
exceeded funding levels requested in the Presidentís budget over the 
past five fiscal years and how this has affected BOPís ability to 
manage its growing inmate population, we: 

* reviewed BOP documentation, including reported obligations costs for 
maintaining key operations, and compared these costs to requests for 
funding in the Presidentís annual budget submission to Congress for 
BOP; 

* interviewed BOP budget development officials, as well as budget 
development officials from the DOJ Justice Management Division, to 
obtain information on the factors officials reported contributing to 
BOPís operational costs exceeding funding levels. 

Scope and Methodology: 

To assess the reliability of the information we obtained about BOP's 
methods for estimating costs for its annual budget submission, we 
compared the documents BOP provided supporting its budget estimates for 
fiscal years 2004 to 2008 with information contained in the President's 
budget request for BOP for those years to determine the consistency of 
the information. 

We also interviewed agency officials knowledgeable about controls in 
place to maintain the integrity of (1) inmate population and sentenced 
offender data BOP used to populate its inmate population projection 
model for fiscal years 1999 to 2009 and (2) data on annual operations 
costs BOP reported between 2004 and 2008, including inmate medical care 
and utilities. As a result, we determined that the data were 
sufficiently reliable for the purposes of this report. 

We conducted this performance audit from May 2009 to September 2009 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. 

Results in Brief: 

BOP develops its annual budget request to DOJ using three general 
steps: (1) estimating cost increases needed to maintain current service 
levels; (2) projecting inmate population changes; and (3) estimating 
costs to provide additional capacity to house inmate population growth 
and implement new programs. 

BOPís methods for cost estimation largely reflect best practices 
outlined in GAOís Cost Estimating and Assessment Guide. BOP followed a 
well defined process for developing a mostly comprehensive, well-
documented, accurate, and credible cost estimate for fiscal year 2008; 
however, BOP has not quantified the level of confidence associated with 
its cost estimate. While not required by OMB or DOJ, conducting 
uncertainty analyses of this kind is a best practice. By providing the 
results of such analyses to DOJ, BOP officials could share advance 
information on the probability and associated risks of operating 
expenses exceeding enacted funding levelsóa situation BOP faced in 
fiscal year 2008. 

BOPís costs for key operations to maintain basic services, such as 
those for inmate medical care and utilities, have exceeded the funding 
levels requested in the Presidentís budget over the last 5 fiscal 
years, and this has limited BOPís ability to manage its growing inmate 
population. According to BOP, between fiscal years 2004 and 2008, costs 
for non-salary inmate medical care and utilities exceeded funding 
levels in the Presidentís budget request by about $131 million and $55 
million, respectively. 

To improve transparency in BOPís cost estimation process, as well as 
DOJís annual budget formulation and justification process, we plan to 
make two recommendations to the Attorney General: 

1. instruct the BOP Director to require BOP budget staff to conduct an 
uncertainty analysis quantifying the extent to which operational costs 
could vary due to changes in key cost assumptionsóand submit the 
results, along with budget documentation, to DOJ so that DOJ can be 
aware of the range of possible costs and BOP's confidence levels 
associated with each point along the range; 

2. instruct the BOP Director to require the budget staff to improve 
documentation of calculations used to estimate its costs. 

DOJ and BOP generally agreed with our findings and provided technical 
comments, which we integrated into our findings as appropriate. 

BackgroundĖBOPís Mission: 

BOPís mission is to protect society by confining offenders in the 
controlled environments of prisons and community-based facilities that 
are safe, humane, cost-efficient, and appropriately secure. 

* As of October 1, 2009, BOP was responsible for overseeing a total 
federal inmate population of approximately 209,000. 

* Approximately 172,500 federal inmatesó83 percentówere housed in 115 
BOP-operated facilities throughout the country. The remaining inmates 
were housed primarily in contract confinement (private facilities and 
halfway houses, operated by contractors or state/local governments). 

BackgroundĖFederal Budget Formulation Process: 

Through the multi-phase federal budget formulation process, BOP is 
required to identify resource requirements and estimate costs for its 
annual budget request to DOJ. This process is guided by OMB, which 
makes decisions on executive agenciesí budgets and submits them as the 
ďPresidentís RequestĒto Congress. Key steps in this process involve: 

* OMB issuing Circular A-11 to federal agencies, providing detailed 
instructions for submitting budget data and materials, as well as 
criteria for developing budget submissions; 

* DOJ issuing to all components its annual budget development 
guidelines; 

* BOP submitting its budget request to DOJís Justice Management 
Division about a year and a half prior to the budget year in question; 

*The Attorney General analyzing all DOJ componentsí budget requests in 
light of department-wide priorities and compiling and submitting the 
DOJ annual budget submission to OMB; and; 

* OMB making final decisions on all agenciesí budgets and submitting 
the Presidentís Request to Congress, which aggregates submissions for 
all of DOJís components, including BOP. 

Figure 1 provides a high-level overview of this process. 

Figure 1: BackgroundĖFederal Budget Formulation Process and OMB, DOJ, 
and BOP Roles: 

[Refer to PDF for image: illustration] 

Federal Budget Formulation Process (continuous cycle): 

First week of February: 
Results in the President's Request to Congress. 

February-May: 
DOJ component agencies begin the process of planning and formulating 
budget requests using OMB and DOJ budget development guidelines. The 
budget will be in effect in two years. 

June-August: 
DOJ budget staff reviews, analyzes and rolls up the budget request and 
the component agencies appeal recommendations. 

August: 
The Attorney General makes final decision on budget after discussion 
with component agencies. 

September: 
DOJ submits budget to OMB. 

September-November: 
OMB reviews spending request, spending caps, and administrative 
priorities. 

Late November: 
OMB gives cabinet agencies their spending levels and program guidance 
for the budget or "passback". 

December: 
DOJ appeals to OMB for more funding and enters into negotiations; final 
budget request decisions are made. 
		
Source: GAO analysis of BOP information. 

[End of figure] 

BackgroundĖBOPís Budget Composition: 

BOPís appropriated budget is comprised of the Salaries and Expenses 
(S&E) and Buildings and Facilities (B&F) accounts. 

* The S&E accountóknown as BOPís operations budgetóincludes sub-
accounts covering costs for staffing; medical care; food; and 
utilities, such as water and gas. In fiscal year 2009, staffing costs 
for employee salaries comprised about 60 percent of this account. 

* The B&F account has sub-accounts covering costs for design and 
construction of new facilities and modernization and repair (M&R) of 
existing facilities. 

* S&E expenses have accounted for the vast majority of BOPís annual 
enacted budget from fiscal years 1999 through 2008óaveraging about 90 
percent. 

The Presidentís fiscal year 2010 budget request for BOPís S&E and B&F 
accounts totals $6.1 billion, which is 23 percent of DOJís $26.7 
billion budget. 

Figure 2 compares the Presidentís request for BOP to its enacted 
funding levels from fiscal year 1999 through 2009, and figure 3 shows 
the composition of the Presidentís request (S&E versus B&F) for BOP 
over the same period. 

Figure 2: BackgroundĖPresidentís Budget Request vs. Enacted Budget for 
BOP, Fiscal Years 1999 through 2009: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 1999; 
President's Budget: $3.5 billion; 
Enacted (plus supplemental and transfers): $3.2 billion. 

Fiscal year: 2000; 
President's Budget: $3.8 billion; 
Enacted (plus supplemental and transfers): $3.7 billion. 

Fiscal year: 2001; 
President's Budget: $4.4 billion; 
Enacted (plus supplemental and transfers): $4.3 billion. 

Fiscal year: 2002; 
President's Budget: $4.7 billion; 
Enacted (plus supplemental and transfers): $4.6 billion. 

Fiscal year: 2003; 
President's Budget: $4.5 billion; 
Enacted (plus supplemental and transfers): $4.4 billion. 

Fiscal year: 2004; 
President's Budget: $4.7 billion; 
Enacted (plus supplemental and transfers): $4.8 billion. 

Fiscal year: 2005; 
President's Budget: $4.7 billion; 
Enacted (plus supplemental and transfers): $4.8 billion. 

Fiscal year: 2006; 
President's Budget: $5.1 billion; 
Enacted (plus supplemental and transfers): $4.9 billion. 

Fiscal year: 2007; 
President's Budget: $5.1 billion; 
Enacted (plus supplemental and transfers): $5.4 billion. 

Fiscal year: 2008; 
President's Budget: $5.4 billion; 
Enacted (plus supplemental and transfers): $5.7 billion. 

Fiscal year: 2009; 
President's Budget: $5.5 billion; 
Enacted (plus supplemental and transfers): $6.2 billion. 

Source: GAO analysis of BOP data. 

[End of figure] 

Figure 3: BackgroundĖPresidentís Budget Requests for BOP: S&E and B&F 
Accounts, Fiscal Years 1999 to 2009: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 1999; 
Buildings and Facilities (B&F): $3.1 billion; 
Salaries and Expenses (S&E): $0.4 billion; 
Total: $3.5 billion. 

Fiscal year: 2000; 
Buildings and Facilities (B&F): $3.2 billion; 
Salaries and Expenses (S&E): $0.6 billion; 
Total: $3.8 billion. 

Fiscal year: 2001; 
Buildings and Facilities (B&F): $3.6 billion; 
Salaries and Expenses (S&E): $0.8 billion; 
Total: $4.4 billion. 

Fiscal year: 2002; 
Buildings and Facilities (B&F): $3.8 billion; 
Salaries and Expenses (S&E): $0.8 billion; 
Total: $4.7 billion. 

Fiscal year: 2003; 
Buildings and Facilities (B&F): $4.1 billion; 
Salaries and Expenses (S&E): $0.4 billion; 
Total: $4.5 billion. 

Fiscal year: 2004; 
Buildings and Facilities (B&F): $4.6 billion; 
Salaries and Expenses (S&E): $0.2 billion; 
Total: $4.7 billion. 

Fiscal year: 2005; 
Buildings and Facilities (B&F): $4.5 billion; 
Salaries and Expenses (S&E): $0.2 billion; 
Total: $4.7 billion. 

Fiscal year: 2006; 
Buildings and Facilities (B&F): $4.9 billion; 
Salaries and Expenses (S&E): $0.2 billion; 
Total: $5.1 billion. 

Fiscal year: 2007; 
Buildings and Facilities (B&F): $5.0 billion; 
Salaries and Expenses (S&E): $0.1 billion; 
Total: $5.1 billion. 

Fiscal year: 2008; 
Buildings and Facilities (B&F): $5.2 billion; 
Salaries and Expenses (S&E): $0.2 billion; 
Total: $5.4 billion. 

Fiscal year: 2009; 
Buildings and Facilities (B&F): $5.4 billion; 
Salaries and Expenses (S&E): $0.1 billion; 
Total: $5.5 billion. 

Source: GAO analysis of BOP data. 

[End of figure] 

BackgroundĖBOPís Challenges: 

* From fiscal years 2000 through 2009, BOPís total inmate population 
level increased by 44 percentófrom 145,125 to 209,027. BOP estimates 
that the total inmate population will continue to rise by about 4,500 
inmates per year over the next decade. 

* During this period, BOP reports that crowding levels (the percentage 
of inmates housed in facilities above the rated capacity for safe and 
secure incarceration) have grown.[Footnote 15] BOP currently reports a 
system-wide crowding rate of 37 percentómore than double the rate (15 
percent) that BOP has determined to be its long-term target for 
reducing overcrowding. 

* According to BOP, as inmate population and crowding have increased, 
BOPís overall inmate to staff ratio increased by nearly 18 percent from 
fiscal year 2000 to 2008, from 4.13 to 1 to 4.86 to 1. BOP reports that 
this has caused a significant reduction in its ability to effectively 
supervise inmates in its facilities. 

* A 2005 BOP study found that an increase in crowding levels or inmate 
to staff ratios leads to an increase in serious violence among 
inmates.[Footnote 16] 

* As of August 1, 2009, BOP reported being staffed at 34,829óabout 88 
percent of its authorized Full Time Equivalent (FTE) staffing level of 
39,692. About half of its authorized positions are for corrections 
officers. 

* Figure 4 compares BOP S&E staffing levels to its inmate population 
beginning in fiscal year 2000. 

Figure 4: BackgroundĖBOPís Inmate and Staffing Levels, Fiscal Years 
2000 to 2009: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2000; 
Total S&E staff on-board: 30,382;
Total BOP inmate population (includes contract confinement): 145,125. 

Fiscal year: 2001; 
Total S&E staff on-board: 31,806; 
Total BOP inmate population (includes contract confinement): 156,572. 

Fiscal year: 2002; 
Total S&E staff on-board: 31,823; 
Total BOP inmate population (includes contract confinement): 163,436. 

Fiscal year: 2003; 
Total S&E staff on-board: 32,265; 
Total BOP inmate population (includes contract confinement): 172,499. 

Fiscal year: 2004; 
Total S&E staff on-board: 32,746; 
Total BOP inmate population (includes contract confinement): 179,895. 

Fiscal year: 2005; 
Total S&E staff on-board: 32,735; 
Total BOP inmate population (includes contract confinement): 187,394. 

Fiscal year: 2006; 
Total S&E staff on-board: 33,114; 
Total BOP inmate population (includes contract confinement): 192,584. 

Fiscal year: 2007; 
Total S&E staff on-board: 33,994; 
Total BOP inmate population (includes contract confinement): 200,020. 

Fiscal year: 2008; 
Total S&E staff on-board: 34,139; 
Total BOP inmate population (includes contract confinement): 201,668. 

Fiscal year: 2009; 
Total S&E staff on-board: 34,209; 
Total BOP inmate population (includes contract confinement): 206,165. 

Note: Fiscal year 2009 data based on projections provided by BOP on 
August 20, 2009. 

Source: GAO analysis of BOP data. 

[End of figure] 

Objective 1ĖHow does BOP estimate costs when developing its annual 
budget submission? 

BOP estimates costs using three general steps: 

Step 1: BOP estimates the costs necessary to maintain operations for 
existing workload requirements (current services) by using the prior 
yearís request or enacted budget as a baseline.[Footnote 17] 

Step 2: BOP projects inmate population changes for the budget year. 

Step 3: BOP estimates costs to accommodate projected inmate population 
growth, including the provision of new programs, such as activation of 
a new BOP prison facility, for the budget year. 

Objective 1ĖEstimating Costs to Maintain Current Services (S&E 
Account): 

First, BOP estimates cost increases for maintaining the level of 
servicesóoperational costsóprovided in the prior yearís enacted budget 
for the S&E account. 

* These costs include adjustments to address mandatory staff pay raises 
and benefit increases, inmate medical care, and utilities across BOPís 
115 facilities. 

BOP primarily analyzes historical obligations from the last 5 years to 
identify average annual operating cost increases. 

BOP also considers economic indicator information to estimate general 
inflationary cost increases, using data from the Bureau of Labor 
Statistics Consumer Price Index and other sources. 

Objective 1ĖProjecting Population Changes: 

Second, BOP projects inmate population changes for the budget year, and 
for 9 years into the future. 

* BOP uses a modeling program that identifies each inmate as a unique 
record tied to variables such as conviction year, sentence term, and 
conviction type. 

* BOPís model uses data and information from a variety of sources, 
including the Administrative Office of the U.S. Courts, the U.S. 
Sentencing Commission, and the Executive Office for U.S. Attorneys to 
identify: 
- Number of inmates currently in prison and the length of their 
sentences, and; 
- Number of inmates estimated to enter prison and the length of their 
sentences. 

* For the fiscal year 2010 annual budget submission, BOP projected a 
net growth of 4,500 inmates. 

Objective 1ĖEstimating Costs to Provide Additional Capacity: 

Third, BOP estimates costs to both house the projected number of new 
inmates, including building and facility requirements, and fund any new 
initiatives. 

* According to BOP, a rising inmate population is the primary driver of 
new service costs. 
- For the budget year, BOP uses inmate projections to determine 
necessary bedspace to house additional inmates. 
- For future years, BOP uses inmate projections to plan for long term 
capacity needs, including new construction and arrangements for 
contract confinement. 

* BOP estimates the associated incarceration costs by (1) determining 
how to distribute incoming prisoners across newly activated facilities, 
existing facilities, or privately operated facilities, and (2) 
calculating staff and other operational costs at each facility type. 

* BOP identifies and estimates costs for new initiatives/program 
increases, such as activation of a new BOP prison facility, by 
reviewing the proposals submitted by its divisions and regional 
offices, and historical data. 

Objective 1ĖEstimating Costs to Provide Additional Capacity (B&F 
Account)BOP also identifies new program costs associated with its B&F 
account, including new construction and M&R. 

* Using its long term population projections, BOP considers new 
construction proposals based on need, funding, and the anticipated 
speed of construction. 
- BOP estimates construction costs (for new prisons or expansions to 
existing facilities) largely by using analogous building costs for 
similar security level facilities. Cost estimates are also based on 
assumptions, including the rate of inflation and when construction will 
begin. 
- M&R project proposals are ranked by assigning safety the highest 
priority, with lesser importance given to improving accessibility and 
updating facilities more than 50 years old. BOP estimates costs for 
replacement values through information it obtains from a construction 
cost estimation company. 
- Since fiscal year 2005, OMB has placed a moratorium on new BOP prison 
construction because OMB has focused on contracting with private 
prisons to address bedspace needs. However, BOP has identified new 
construction plans and included proposals for new construction as part 
of its capacity plan.[Footnote 18] 

Objective 2ĖTo what extent do BOPís methods for estimating costs follow 
established best practices or guidelines? 

BOPís methods for estimating costs in its annual budget requests to DOJ 
largely reflect the four best practices outlined in GAOís Cost 
Estimating and Assessment Guide. 

* GAOís Cost Estimating and Assessment Guide has identified 12 
practices that are the basis for effective cost estimation.[Footnote 
19] We associate these practices with four characteristics: accurate, 
well documented, credible, and comprehensive. OMB endorsed this 
guidance as being sufficient for meeting most cost estimating 
requirements, including for budget formulation. 

* If followed correctly, these 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 2ĖExtent To Which BOPís Cost Estimation Methods Reflect GAOís 
Cost Estimation Best Practices: 

As table 1 illustrates, we found that BOPís methods for estimating 
costs met one and substantially met three of these four practices. The 
following explains the definitions we used in assessing BOPís methods 
for estimating costs in its annual budget submission to DOJ: 

MetĖBOP provided complete evidence that satisfies the entire criterion; 

Substantially MetĖBOP provided evidence that satisfies a large portion 
of the criterion; 

Partially MetĖBOP provided evidence that satisfies about half of the 
criterion; 

Minimally MetĖBOP provided evidence that satisfies a small portion of 
the criterion; 

Not MetĖBOP provided no evidence that satisfies any of the criterion. 

DOJ officials reported being satisfied with BOPís cost estimation 
methods, noting that they could not identify any area needing 
improvement. 

Objective 2ĖBOPís Methods for Estimating Costs in its Annual Budget 
Requests to DOJ Largely Reflect GAO Best Practices: 

Table 1: Extent to Which BOPís Cost Estimating Methods Reflect GAO Best 
Practices: 

Best practice: Accurate; 
Explanation: 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. 
Satisfied? Met. 

Best practice: Well documented; 
Explanation: 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. 
Satisfied? Substantially met. 

Best practice: Credible; 
Explanation: The cost estimates should discuss any limitations in the 
analysis performed due to uncertainty surrounding data or assumptions. 
Further, the estimatesí 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.
Satisfied? Substantially met. 

Best practice: Comprehensive; 
Explanation: The cost estimates should include both government and 
contractor costs over the programís 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.
Satisfied? Substantially met. 

Source: GAO analysis. 

[End of table] 

Objective 2ĖBOPís Cost Estimating Methods Met Characteristics for 
Accuracy: 

Consistent with best practices, BOP used relevant historical cost data 
and considered adjustments for general inflation when estimating costs 
for its fiscal year 2008 budget request to DOJ, and its methods for 
projecting inmate population have been largely accurate. 

* BOP officials reported estimating costs for medical care and 
utilities for the budget year in question based on historical 
obligations over the prior three to five years. For example, BOP 
provided documentation that officials reported using to develop BOPís 
fiscal year 2009 inmate medical care cost estimate showing BOPís annual 
non-salary inmate medical care costs had increased an average of about 
10 percent annually between fiscal years 2003 and 2005.[Footnote 20] 

* BOPís total inmate population projections were accurate, on average, 
to within 1 percent of the actual inmate growth from fiscal year 1999 
to August 20, 2009. 
- BOP overestimated the inmate population for 8 of the 11 fiscal years 
reviewed. 

* Figure 5 compares BOPís projected population levels as reflected in 
the Presidentís request compared to the actual inmate populations at 
the end of each fiscal year, 1999 to 2009 (projected). 

* Table 2 presents the difference between the projected and actual 
population increases. 

Figure 5: Objective 2ĖBOPís Population Projections Have Been Largely 
Accurate: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 1999; 
Projected in President's Budget: 127,902;
Actual at the end of the fiscal year: 133,689.

Fiscal year: 2000; 
Projected in President's Budget: 141,282;
Actual at the end of the fiscal year: 145,125.

Fiscal year: 2001; 
Projected in President's Budget: 160,919;
Actual at the end of the fiscal year: 156,572.

Fiscal year: 2002; 
Projected in President's Budget: 169,217;
Actual at the end of the fiscal year: 163,436.

Fiscal year: 2003; 
Projected in President's Budget: 175,126;
Actual at the end of the fiscal year: 172,499. 

Fiscal year: 2004; 
Projected in President's Budget: 180,279;
Actual at the end of the fiscal year: 179,895.

Fiscal year: 2005; 
Projected in President's Budget: 190,004;
Actual at the end of the fiscal year: 187,394.

Fiscal year: 2006; 
Projected in President's Budget: 195,972;
Actual at the end of the fiscal year: 192,584.

Fiscal year: 2007; 
Projected in President's Budget: 203,880;
Actual at the end of the fiscal year: 200,020.

Fiscal year: 2008; 
Projected in President's Budget: 202,584;
Actual at the end of the fiscal year: 201,668.

Fiscal year: 2009; 
Projected in President's Budget: 20,6165;
Actual at the end of the fiscal year: 207,872.

Note: Actual inmate population for fiscal year 2009 as of August 20, 
2009. 

Source: GAO analysis of BOP data. 

[End of figure] 

Table 2: Objective 2ĖBOPís Population Projections Have Been Largely 
Accurate: 

Fiscal year: 1999; 
Projected inmate population level: 127,902; 
Actual inmate population level: 133,689; 
Difference: -5,787. 

Fiscal year: 2000; 
Projected inmate population level: 141,282; 
Actual inmate population level: 145,125; 
Difference: -3,843. 

Fiscal year: 2001; 
Projected inmate population level: 160,919; 
Actual inmate population level: 156,572; 
Difference: 4,347. 

Fiscal year: 2002; 
Projected inmate population level: 169,217; 
Actual inmate population level: 163,436; 
Difference: 5,781. 

Fiscal year: 2003; 
Projected inmate population level: 175,126; 
Actual inmate population level: 172,499; 
Difference: 2,627. 

Fiscal year: 2004; 
Projected inmate population level: 180,279; 
Actual inmate population level: 179,895; 
Difference: 384. 

Fiscal year: 2005; 
Projected inmate population level: 190,004; 
Actual inmate population level: 187,394; 
Difference: 2,610. 

Fiscal year: 2006; 
Projected inmate population level: 195,972; 
Actual inmate population level: 192,584; 
Difference: 3,388. 

Fiscal year: 2007; 
Projected inmate population level: 203,880; 
Actual inmate population level: 200,020; 
Difference: 3,860. 

Fiscal year: 2008; 
Projected inmate population level: 202,584; 
Actual inmate population level: 201,668; 
Difference: 916. 

Fiscal year: 2009; 
Projected inmate population level: 206,165; 
Actual inmate population level: 207,872; 
Difference: -1,707. 

Note: Actual inmate population for fiscal year 2009 as of August 20, 
2009. 

Source: GAO analysis of BOP data. 

[End of table] 

Objective 2ĖBOPís Cost Estimating Methods Substantially Met 
Characteristics for Being Well Documented: 

Consistent with best practices, BOP clearly defined the purpose of its 
cost estimates,and its calculations and results substantially met 
characteristics for being well documented. 

* We reviewed BOPís fiscal year 2008 budget request to DOJ and 
supporting documentation and found budget officials had documented the 
formulas they used to calculate cost elements for new initiatives, such 
as activation-related costs for a new prison facility planned to open 
in the budget year. 

* In some cases, however, we required the guidance of BOP budget 
analysts to identify backup support because the documentation was 
insufficient to allow someone unfamiliar with the budget to locate 
detailed corroborating data. For example, in reviewing BOPís fiscal 
year 2008 cost estimate for a health service initiative related to 
expanding kidney dialysis, we required a budget officialís assistance 
in locating supporting formulas used to calculate the estimate. 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 BOP to recreate its estimates in the event of attrition within 
its budget office among those who have developed initial cost 
estimates. 

Objective 2ĖBOPís Cost Estimating Methods Substantially Met 
Characteristics for Credibility: 

Consistent with best practices, BOP performed independent government 
cost estimates related to constructing new prisons and used historical 
data to estimate key operational costs, including utilities and inmate 
medical care, and its calculations and results substantially met 
characteristics for credibility. 

* BOP performed cross-checks by benchmarking new estimates against 
historical data, such as by estimating medical care costs based on cost 
obligations in recent years and developed numerous risk analyses and 
impact scenarios of funding cuts. 

* Although not required to do so by OMB or DOJ annual budget 
development guidelines, BOP did not perform an uncertainty analysis 
consistent with best practices to quantify the risk associated with 
changes to various assumptions that drive its cost estimates.[Footnote 
21] Major assumptions include the inmate population projection; 
inflation indices for medical care and utilities; and annual salary 
increases. 

* Such an analysis would help provide DOJ, Congress, and other 
stakeholders with information to determine the probability that costs 
for key operations, such as inmate medical care and utilities, may 
exceed funding levels requested in the Presidentís budget. 

Objective 2ĖBOPís Cost Estimating Methods Substantially Met 
Characteristics for Being Comprehensive: 

Consistent with best practices, BOP detailed pertinent costs related to 
its S&E and B&F accounts across sub-accounts. This level of detail 
helped ensure that no cost elements were omitted or double counted in 
its budget request submission to DOJ, and that BOPís calculations and 
results substantially met characteristics for comprehensiveness. 

* BOP relied on ground rules and assumptions, such as using inmate 
population projections to drive cost estimates for capacity needs and 
using historical obligation trends to estimate growth for utilities and 
inmate medical care costs. 

* However, as noted earlier, BOP did not determine risk distributions 
for all assumptions, which would enable it to perform an uncertainty 
analysis for key cost elements. 

Objective 3ĖTo what extent have BOPís costs for key operations exceeded 
requested funding levels in the Presidentís budget in the last five 
fiscal years, and how has this affected BOPís ability to manage its 
growing inmate population? 

Costs for key operations to maintain basic services, such as those for 
inmate medical care and utilities, have exceeded the funding levels 
requested in the Presidentís budget over the past five fiscal years, 
and this has limited BOPís ability to manage its growing inmate 
population. 

* From fiscal years 2004 through 2008, the funding levels requested in 
the Presidentís budget for BOP have been insufficient to cover annual 
cost growth for maintaining existing services, including inmate medical 
care and utilities. Moreover, population adjustment fundingónecessary 
to cover expenses associated with housing a growing inmate population 
in BOP-operated facilitiesóhas not consistently been included in the 
Presidentís budget, with BOP receiving no funding adjustments in some 
years. 

* As a result, BOP has faced funding gaps in its operations account 
that has left it with limited flexibility to manage its continually 
growing inmate population. 

Objective 3ĖCosts to Maintain Key Operations and Accommodate a Growing 
Inmate Population Have Exceeded Funding Levels Requested in the 
Presidentís Budget: 

BOPís annual cost growth to maintain key operations exceeded annual 
funding adjustments requested in the Presidentís budget from fiscal 
years 2004 through 2008. For example, during this time, costs for non-
salary inmate medical care and utilities exceeded funding levels by 
about $131 million and $55 million, respectively. BOP attributed the 
cost growth to inflation and inmate population growth.[Footnote 22] 

Medical care costs: From fiscal year 2004 through 2008, BOPís annual 
non-salary inmate medical care costs increased by about $146.5 million. 
In contrast, during this period, the Presidentís budget requested 
funding cost adjustments for non-salary inmate medical care totaling 
about $15.4 million. 

Objective 3ĖCosts to Maintain Key Operations and Accommodate a Growing 
Inmate Population Have Exceeded Funding Levels Requested in Presidentís 
Request: 

Utilities costs: From fiscal year 2004 through 2008, BOPís annual 
utilities costs increased by a total of $87 million. In contrast, 
during this period, the Presidentís budget requested funding cost 
adjustments for utilities costs totaling about $31.6 million. 

* Table 3 compares the rates of BOPís average annual cost growth for 
non-salary inmate medical care and utilities to average rates of annual 
funding adjustments requested in the Presidentís budget, from fiscal 
year 2004 through 2008. 

Table 3: Objective 3: Historical Cost Growth Has Exceeded Funding 
Adjustments in the Presidentís Request: 

Inmate medical care (non-salary): 
Average annual rate of cost growth incurred by BOP, fiscal years 2004 
through 2008: 8.7%; 
Average annual rate of funding growth in Presidentís budget request, 
fiscal years 2004 through 2008: 0.9%. 

Utilities: 
Average annual rate of cost growth incurred by BOP, fiscal years 2004 
through 2008: 9.8%; 
Average annual rate of funding growth in Presidentís budget request, 
fiscal years 2004 through 2008: 3.2%. 

Source: GAO analysis of BOP data. 

[End of table] 

Objective 3ĖCosts to Accommodate a Growing Inmate Population and 
Maintain Staffing Levels Have Exceeded Funding Adjustments Requested in 
the Presidentís Budget, According to BOP: 

In some years, the Presidentís request for BOP has included funding 
adjustments for marginal costs associated with inmate population growth 
in existing BOP facilities.[Footnote 23] However, BOP budget officials 
reported that this cost adjustment has not included necessary funding 
to hire additional correctional officers to maintain inmate to 
corrections staff ratios and effectively manage the new population. 

* For example, the most recent institution population adjustment 
request, in fiscal year 2009, included $17.1 million to house a 
projected net increase of 1,807 inmates in existing BOP facilities. 
[Footnote 24] 

* In fiscal year 2009, BOP reported an inmate to corrections officer 
ratio of about 10 to 1 (the number of inmates supervised per 
corrections officer). 

* BOP budget officials reported that BOP would need to hire 180 
additional corrections officers to maintain this ratio for the 1,807 
new inmates. However, according to salary and benefits cost assumptions 
provided by BOP budget officials, the staffing portion of the 
adjustment provided funding equivalent to staffing 46 additional 
corrections officers. 

Objective 3ĖBecause BOPís Operations Funding Has Not Kept Pace with 
Annual Growth, BOP Continues to Face Challenges Managing its Growing 
Inmate Population: 

When BOP has not received funding to cover operational cost increases 
it has incurred, in some years BOP had used S&E funding planned for 
other areas to cover these costs. 

* Though one of BOPís highest priorities is to increase staffing levels 
of corrections officers, BOP officials report using S&E funds in fiscal 
years 2008 and 2009 initially planned for hiring additional officers to 
instead cover base operations cost increases related to inmate medical 
care, utilities, and personnel salary and benefit adjustments that have 
been unfunded in the Presidentís budget requests. 

* In the Presidentís fiscal year 2010 budget request, $70 million is 
included as a line item for additional BOP staffing. However, BOP 
officials reported that this funding, if received, is to be used, in 
part, to cover existing employeesí mandatory pay and benefit increases, 
and other operations cost increases. 

Objective 3ĖBOP Has Limited Flexibility in Managing Funding Gaps: 

As with any other DOJ component, BOPís budget requests are governed by 
standard DOJ and OMB budget development guidance. 

* For example, DOJ budget development guidance for fiscal years 2008 
and 2009 instructed components to limit cost growth for current 
services to no more than 4 percent greater than prior year levels. 

* DOJ reported that the 4 percent cap guidance is a general instruction 
given to all components but recognizes that BOP is different because 
its costs are less discretionary. Furthermore, DOJ reported that it did 
not automatically reject budget submissions from components that 
exceeded the cap, but instead required components to submit substantive 
information to justify need. 

* DOJ reported that OMB does not automatically provide funds for 
inflationary cost increases. DOJ cited OMB policy stating that 
inflationary adjustments for discretionary costs (such as utilities) 
can include some, all, or no allowance for inflation. DOJ officials 
reported that OMB typically does not include general inflationary 
adjustments that DOJ submits on behalf of BOP when it formulates the 
Presidentís request. 

* However, DOJ has reported to OMB that, if faced with funding 
shortfalls similar to what BOP has faced in its operations budget, 
other DOJ components could reduce operations, implement across-the-
board hiring freezes, and implement policy changes that would reduce 
costs. However, with almost all of its S&E costs fixed,[Footnote 23] 
DOJ reported that BOP has limited flexibility in these areas, and has 
already implemented significant reductions to programs, such as 
streamlining and centralizing administrative functions to eliminate 
2,300 positions. 

Conclusions: 

In each of the last 2 fiscal years, BOP has needed additional funding 
to meet its operating costs. 

* However, we found that BOP's cost estimation methods either met or 
substantially met GAOís cost estimating best practices. 

* Further, BOP officials report, and DOJ officials acknowledged, that 
BOP has already implemented significant reductions in programs by 
eliminating positions and centralizing administrative functions. 

* In addition, the current level of overcrowding within BOP facilities 
presents an already serious safety challenge. Given BOPís unique 
responsibility for managing this population, it has limited discretion 
when costs for key operations exceed funding levels. 

In light of these circumstances, BOP's budget cost estimation practices 
could be strengthened in two ways: 

* First, although BOP, like other DOJ agencies, is not required to 
report the extent to which actual costs may be expected to vary from 
cost estimates, we have identified the provision of an uncertainty 
analysis as a best practice. If BOP identified its level of cost 
estimation confidence and provided this information to DOJ, DOJ could 
more fully understand the range of potential costsóand the potential 
need for more fundingóif estimating assumptions for key cost drivers, 
such as inmate population growth, do not hold true. 

* Second, by improving documentation of all steps for developing its 
cost estimate, BOP 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. 

Recommendations: 

To improve transparency in BOPís cost estimation process, as well as 
DOJís annual budget formulation and justification process, and to 
provide DOJ with more detailed information to consider when 
deliberating its budget proposal for BOP, we recommend that the 
Attorney General of the United States take the following two actions: 

* instruct the BOP Director to require the BOP budget staff to conduct 
an uncertainty analysis quantifying the extent to which operations 
costs could vary due to key cost assumptions changing and submit the 
results along with budget documentation to DOJ so that DOJ could be 
aware of the range of likely costs and associated confidence levels; 
and; 

* instruct the BOP Director to require the BOP budget staff to improve 
documentation of calculations used to estimate its costs. 

Agency Comments: 

* We provided a draft of this report to DOJ and BOP for review and 
comment. We also verbally described our findings and proposed 
recommendations to DOJ and BOP officials in a meeting on August 31, 
2009. Additionally, we received technical comments from DOJ and BOP, 
which we incorporated where appropriate. 

* DOJ and BOP generally agreed with the findings. DOJ and BOP will 
formally review our recommendations when we submit our final product in 
fall 2009. 

* We made several requests to meet with OMB, but we were unable to 
schedule a meeting during our review. 

Appendix IĖGAOís 12 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. Analysis, presentation, and updating the estimate steps
can lead to repeating previous assessment steps. 

* 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. 

Source: GAO. 

[End of section] 

Appendix II: Comments from the Department of Justice, Federal Bureau of 
Prisons: 

U.S. Department of Justice: 
Federal Bureau of Prisons: 
Office of the Director:	
Washington, DC 20534: 

November 4, 2009: 

David C. Maurer, Director: 
Homeland Security & Justice Issues: 
U.S. Government Accountability Office: 
Seattle, WA 98104: 

Dear Mr. Maurer: 

The Bureau of Prisons (BOP) appreciates the opportunity to formally 
respond to the Government Accountability Office's draft report entitled 
Bureau of Prisons: Methods for Cost Estimation Largely Reflect 
Decisionmaking, but Quantifying Risks Would Enhance Decisionmakinq. We 
have completed our review of the information reflected in the report 
and offer the following comments. 

First, we concur with the GAO assessment and its findings that the BOP 
process is "well defined", and that the data and estimates are "well 
documented, accurate and credible". Furthermore, we agree with GAO that 
funding gaps in the BOP operations account have left the BOP "... with 
limited flexibility to manage its continually growing inmate 
population." Finally, we concur with the two GAO recommendations as 
explained below. 

Recommendation 1: Instruct the BOP Director to require the BOP budget 
staff to conduct an uncertainty analysis quantifying the extent to 
which operations costs could vary due to changes in key cost 
assumptions and submit the results along with budget documentation to 
DOJ so that DOJ could be aware of the range of likely costs and BOP's 
associated confidence levels. 

Response: The BOP agrees with this recommendation. To increase 
transparency, BOP believes that including the results of uncertainty 
analysis in the budget document will provide all decisionmakers (DOJ, 
OMB, and the Congress) better context for decisionmaking. The BOP 
already provides in its Buildings and Facilities Budget a range of 
potential project costs, which alerts the decisionmaker to potential 
cost fluctuations such as those we have seen in the past few years. The 
BOP looks forward to working with the GAO and learning more about the 
analysis program they recommend. 

The BOP will accomplish this recommendation with its 2012 budget cycle 
beginning in the Spring Call, and if time permits, the BOP will work 
with the DOJ and OMB to incorporate it into the President's 2011 
Budget. 

Recommendation 2: Instruct the BOP Director to require the BOP budget 
staff to improve documentation of calculations used to estimate its 
costs. 

Response: The BOP agrees with this recommendation. To increase 
transparency, it is critical that the reader/evaluator of the budget 
request be provided sufficient information to understand how the 
mandatory costs (i.e., medical, utility, food expenses) were derived 
and how capacity and staffing changes will need to be adjusted 
accordingly. 

The BOP's corrective action is to include its multi-year population 
projection table (Budget year + 5) and corresponding crowding table 
which demonstrate how the request supports the projected population and 
how it tracks with the growth. In addition, pertinent annualization and 
inflation factors from BOP supporting documentation will be included to 
make the budget request more transparent and easier to understand. 

Finally, consistent with the discussion in the GAO report, the BOP 
proposes to add historical spending information graphics for mandatory 
expenses such as pay increases, medical, utilities and food costs. This 
would provide additional context and insight for the reader. 

If you have any questions regarding this response, please contact 
VaNessa P. Adams, Assistant Director, Program Review Division, at (202) 
616-2099. 

Sincerely, 

Signed by: 

[Illegible], for: 

Harley G. Lappin: 
Director: 

cc: Richard Theis, Assistant Director, Audit Liaison Group, JMD: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David C. Maurer, (202) 512-9627 or maurerd@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Joy Gambino, Assistant 
Director, and Jay Berman, Analyst-in-Charge, managed this assignment. 
Pedro Almoguera, Tisha Derricotte, Geoffrey Hamilton, Marvin McGill, 
Karen Richey, Adam Vogt, and Melissa Wolf made key contributions to 
this report. 

[End of section] 

Footnotes: 

[1] Inmate population data as reported by BOP. Of the total inmate 
population, approximately 172,500 federal inmates--83 percent--were 
housed in 115 BOP-operated facilities throughout the country. The 
remaining inmates were housed primarily in contract confinement (i.e., 
facilities and halfway houses, operated by private contractors or 
state/local governments). 

[2] H. Comm. on Appropriations, 111th Cong., Committee Print on H.R. 
1105/Public Law Number 111-8 at 274 (2009), accompanying the Omnibus 
Appropriations Act, 2009 (Pub. L. No. 111-8, 123 Stat. 524 (2009)). 

[3] 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). 

[4] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[5] The Salaries and Expenses account includes sub-accounts covering 
costs for staffing, inmate medical care, food, and utilities. From 
fiscal years 1999 through 2008, these expenses comprised about 90 
percent of BOP's budget--in fiscal year 2009, staffing costs for 
employee salaries accounted for about 60 percent of the Salaries and 
Expenses account. The Buildings and Facilities account has sub-accounts 
covering costs for design and construction of new facilities and 
modernization and repair of existing facilities. 

[6] BOP officials reported that during years in which a continuing 
resolution is in effect, they must use the prior year's budget request 
submission to DOJ as the baseline because of delays in the enactment of 
the budget. 

[7] GAO's Cost Estimating and Assessment Guide identifies 12 practices 
that are the basis for effective cost estimation. We associate these 
practices with four characteristics: accurate, well documented, 
credible, and comprehensive. If followed correctly, these 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. 

[8] Non-salary inmate medical care costs refer to the amount BOP spends 
on pharmaceuticals, medical supplies, and outside medical care-- 
community hospital services and a portion of guard escort service and a 
portion of salaries (overtime). In fiscal year 2008, non-salary inmate 
medical care and utilities costs were $430.5 million and $234 million, 
respectively. 

[9] Pub. L. No. 110-252, 122 Stat. 2323 (2008). 

[10] Pub. L. No. 111-8, 123 Stat. 524 (2009). 

[11] Pub. L. No. 111-32, 123 Stat. 1859 (2009). 

[12] H. Comm. on Appropriations, 111thCong., Committee Print on H.R. 
1105/Public Law Number 111-8 at 274 (2009) accompanying Pub. L. No. 111-
8, 123 Stat. 524 (2009). 

[13] 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). 

[14] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[15] According to BOP, rated capacity is intended to reflect the number 
of inmates that the facility was meant to house safely and securely and 
with adequate access to services providing necessities for daily living 
and programs designed to support inmatesí crime-free return to the 
community. 

[16] Department of Justice, Federal Bureau of Prisons, The Effects of 
Crowding and Staffing Levels in Federal Prisons on Inmate Violence 
Rates(Washington, D.C., 2005). 

[17] BOP officials reported that during years in which a continuing 
resolution is in effect, they must use the prior yearsí budget request 
submission to DOJ as the baseline because of delays in the enactment of 
the budget. 

[18] According to BOP, the only new construction funding requested by 
the administration since fiscal year 2005 has been for completion of an 
ongoing prison project in Mendota, California. 

[19] See appendix I for a description of these cost estimating 
practices. 

[20] Non-salary inmate medical care costs refer to the amount BOP spent 
on pharmaceuticals, medical supplies, and outside medical care 
(community hospital services and a portion of guard escort service and 
a portion of salaries (overtime). 

[21] An uncertainty analysis provides a range of costs that span a best 
and worst case spread. According to best practices, it is better for 
decision makers to know the range of potential costs that surround an 
estimate and the reasons behind what drives that range rather than just 
having a point estimate from which to make their decision. 

[22] In fiscal year 2008, non-salary inmate medical care and utilities 
costs were $430.5 million and $234 million, respectively. 

[23] Marginal costs include providing security, food, medical care, 
clothing, unit management, education, records, and maintenance 
associated with additional inmates entering existing BOP facilities. 

[24] BOP uses a standard DOJ marginal cost per inmate rate. In fiscal 
year 2009, this rate was $9,483. 

[25] According to BOP data, in fiscal years 2007 and 2008, 99.5 percent 
of BOPís S&E budget was fixedóthat is, for paying staff salaries, and 
providing services to house and care for the inmate population. 

[End of section] 

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