Audit prompts bill to tighten prison-industry cost accounting and contract rates

House File 4031, as amended, responds to an Office of Legislative Auditor review of Minnesota Correctional Industries' contracting and rate-setting practices. Deputy Commissioner Sophie Hahn told the committee the department has already implemented changes to calculate costs and separate contracts to better align with audit recommendations.

Catherine Tyson, deputy legislative auditor, summarized the audit's findings that some contract rates did not fully account for manufacturing costs and recommended statutory requirements for how the corrections enterprise calculates rates and assesses contract profitability. Representative Robbins, the bill sponsor, said the bill aims to protect competitiveness and jobs while preserving inmate job-skills programs.

Members and testifiers indicated support for codifying clearer rate-setting and profitability assessment rules; the bill was laid over for further consideration.