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Auditor Claims State Paid ‘Ghost Workers’ at Privately Run Prison, Demands $2 Million Back

Mississippi State Auditor Shad White seated at his desk
Mississippi State Auditor Shad White is asking Utah-based Management and Training Corporation to refund about $2 million after alleging that the State paid the private organization "for levels of staffing that didn't exist" in its running of the State-owned Marshall County Correctional Facility in Holly Springs, Miss., between 2017 and 2020. Photo courtesy Mississippi Office of the State Auditor

The Marshall County Correctional Facility allegedly had 12,000 unfilled shifts between 2017 and 2020, although the State of Mississippi paid to staff those shifts. The Mississippi State Auditor Shad White demanded on Nov. 14, 2022, that Utah-based Management and Training Corporation, which manages the Mississippi Department of Corrections facility, pay back nearly $2 million.

White told the Mississippi Free Press during a phone interview on Nov. 14 that his office found “that the number of prison guards and staff that were on duty fell below (the contract requirement), and yet the State still paid that private company, MTC, for the value of those workers, basically ghost workers at that point, under the contract.”

“If that happens, MTC either should not have been paid, or they should credit money back to the State, and what we found was that that was not happening, that they were just being paid for levels of staffing that didn’t exist,” he added. “We really dug in, and the investigators in the office here started looking hard, going through thousands of pages of time sheets, documents, other materials, over the course of the last several years, and ultimately determined that MTC owes back a little shy of $2 million for the staffing level that existed in the facility.”

The Management and Training Corporation rejected the auditor’s assessment in an emailed statement to the Mississippi Free Press on Nov. 14, 2022. “MTC paid vacancy penalties pursuant to the terms of the Marshall contract, as amended by MDOC in December 2017,” the organization stated. “The calculations in the State Auditor’s demand are inconsistent with the terms of the amended contract.”

Men working at The Management and Training Corporation
The Management and Training Corporation said it has paid vacancy penalties to the Mississippi Department of Corrections based on its agreement with the agency in December 2017. Photo courtesy The Management and Training Corporation

A press release from the state auditor’s office on Nov. 14, 2022, indicated that the contract between MDOC and Management and Training Corporation required the private company to develop “minimum mandatory staffing levels to ensure the safety of inmates and prison staff.”

“The Auditor’s investigation revealed MTC failed to appropriately notify and credit MDOC when its staffing levels at the Marshall County facility fell below the minimum amount required by the contract,” the press release added.

MDOC Withheld MTC’s Fund in 2020

The Marshall Project reported in December 2020 on how dangerous the facility is with inadequate staffing. It explained that the operational contract that Management and Training Corporation holds with the MDOC requires that it repay the State the wages when staffing levels fall below what the contract demands with a 25% fine.

In Mississippi, the Management and Training Corporation manages Marshall County Correctional Facility in Holly Springs, Miss., and two other facilities: Wilkinson County Correctional Facility in Woodville and East Mississippi Correctional Facility in Meridian with the combined capacity to house over 3,000 inmates.

The report said that “the company paid some refunds to the state for several years,” with the report adding that “invoices show those repayments dropped from more than $700,000 in 2017 to only $23,000 in 2018, even as the staff vacancy rate rose.”

At the Wilkinson County Correctional Facility and East Mississippi Correctional Facility, “MTC didn’t repay a penny from 2013 to 2019, despite understaffing, allowing the company to pocket millions of taxpayers’ dollars for ghost workers’ pay, according to records analyzed by The Marshall Project,” the report continued.

Marshall County Correctional Facility
Mississippi State Auditor Shad White is demanding that Management and Training Corporation pay back some of the money it received to run the Marshall County Correctional Facility between 2017 and 2020. MTC holds a contract from the Mississippi Department of Corrections to run the prison facility. Photo courtesy MDOC

The Mississippi Auditor’s Office said the civil demand that its special agents served Management and Training Corporation Monday totaled $1,991,774.10 and includes interest and investigative costs. Without payment from the organization within 30 days, “the case will be transmitted to the Mississippi Attorney General’s Office for litigation,” the office said.

“This is one of the larger demands we’ve issued in my time in office,” White said in the press release. “Our investigators have proven we will take on the biggest cases down to the smallest to protect taxpayer dollars.”

“We look forward to a swift recovery of these funds.”

In 2020, the MDOC said that it had begun withholding payment from the company that year, the Marshall Report said. Mississippi Department of Corrections Commissioner Burl Cain said that his department withheld $208,000 from MTC for MTC not fulfilling staff requirements after he took office in June of that year. That instance would be the first time that happened “[a]fter eight years of contracting with MTC,” the report said.

“Yet MTC invoices show the company refunded nothing to the state for vacant positions at Wilkinson between 2013 and 2019,” it continued. “The state paid MTC $87 million to run the prison over this period.”

“In the internal audit, MTC noted that Wilkinson routinely failed to fill two or three mandatory positions every shift,” the report added. “The overnight shift was the worst: A dozen officers have told The Marshall Project that it was common for five or six guards to run the prison when the contract called for a minimum of 30 overnight.”

Burl Cain in front of a US Flag
Mississippi Department of Corrections Commissioner Burl Cain said his agency withheld $208,000 from Management and Training Corporation in 2020 for not fulfilling staff requirements. Photo courtesy MDOC

Issa Arnita, an official from Management and Training Corporation, commented on the situation at the time. “Our goal is always to have all vacancies filled,” he told The Marshall Report in 2020.

After the Mississippi Free Press requested comments from MDOC, Assistant Deputy Commissioner Leo B. Honeycutt III wrote, “The Commissioner is out today, but I am actually getting some figures on staffing at Marshall County since that was the point of Auditor White’s demand letter to MTC,” in an email on Nov. 14, 2022.

White told the Mississippi Free Press that the investigation into MTC’s fidelity to its contracts is ongoing.

“This is the beginning of our process on this case, not the end of our process; what we wanted to do was identify the losses that we could with a first pass at this question and go ahead, start the ball rolling to get money back to the taxpayers,” White said. “There are two other prisons in Mississippi that MTC is operating; we’re not done yet with our work on this case.”

“This is just a first step to try to go ahead and start recouping some of the money,” white concluded in the interview.


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