DATE: Wednesday, September 24, 1997         TAG: 9709240001

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial

                                            LENGTH:   36 lines

PRISONS BAD BUSINESS

It sounds like a terrific idea: prison industries that operate in partnership with private businesses to give prisoners a job skill and work ethic. Best of all, the prison projects are financially self-supporting.

That's the way Virginia Correctional Enterprises, the agency that runs the businesses, is supposed to run. The Associated Press reports, however, that the agency has so little data on its ventures with private firms that no one knows if the inmate operations are making or losing money.

That's no way to run a business.

The story was based on a report by the state auditor of public accounts, Walter Kucharski, who found that the state is selling 300 prison-produced products for less than the cost of production.

For instance, sheet metal shops at the Dillwyn and Buckingham correctional centers are producing camp stoves for Ariens Co. of Brillion, Wis. The prisons sell the stoves for $43.97 each.

State auditors discovered, however, that it costs $57.26 to produce each stove.

Kucharski's report concluded that Virginia Correction Enterprises has problems estimating costs and tends to inflate the projected profits - a bad combination. Last year, estimates of labor costs were off by more than 20 percent for 10 of 13 main business lines.

By law, Virginia Correctional Enterprises must be self-sufficient.

It's time for the state agency to conduct itself in a more businesslike manner and that means a halt to the practice of selling products for less than the cost of production.

The prison project is worth maintaining, but it must be done on a cost-effective basis.

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