Summary

GAO reviewed the dispute between the Bureau of Prisons and the District of Columbia Government concerning payments to house D.C. prisoners in Federal correctional institutions.

GAO noted that, according to the Bureau's records, the D.C. Government owed it more than $20 million as of August 1982. This deficit existed even after the D.C. Government paid the Bureau $12.5 million in January 1982 to partially offset the deficit. GAO found that the agencies cannot agree on the amount of money owed or how the interest charges should be applied. The Bureau applied the January 1982 payment to the interest due on the outstanding debt and the portion of the debt that had been in arrears the longest. However, the position of D.C. is that it should not pay interest charges on all of the outstanding debt because a large part of the balance consists of questionable costs. GAO also noted that the Bureau has little incentive to resolve billing disputes with the D.C. Department of Corrections because the funds, by law, are not available to the Bureau, but are deposited to the U.S. Treasury. GAO concluded that the Bureau and the D.C. Government need to resolve their dispute over payments to house D.C. prisoners in Federal correctional institutions and to take steps to prevent such disputes in the future.