Colorado Department of Corrections Budget Practices

In 2024, the Colorado Office of the State Auditor engaged PFM through a competitive RFP to evaluate the Colorado Department of Corrections’ (CDOC) budgeting practices. The work was prompted by the Joint Budget Committee, which raised concerns about recent changes to the Department’s methodology for population-based budget requests, personnel budget requests, management of cash funds, and approach to setting inmate fees and wages. PFM was asked to provide an independent assessment against research-based best practices and norms within state corrections agencies.

Over the course of the review, PFM conducted more than 20 interviews with key legislative and executive branch staff and senior leaders in the Department of Corrections to amass a comprehensive, nuanced understanding of current and past practices, and the context in which they operate. To determine whether CDOC’s practices differed from its peers, PFM collaborated with the Department to administer a survey to all state departments of corrections and interviewed 8 states with similar continuation budgeting practices.

PFM concluded the Department incorporates some best and standard practices in its budgeting practices, but also identified inconsistencies, inaccuracies, and opaque justifications. One key finding was that the Department’s approach to developing its budget (based largely on inmate population changes within the year and year-to-year) fundamentally differed from methods used in other jurisdictions. PFM produced additional findings related to CDOC’s calculation of fixed and variable costs, estimation of its staffing needs, efforts to improve recruitment, and documentation of its budget requests.

PFM developed 32 recommendations to improve the accuracy, transparency, justification, and predictability of CDOC’s budget development process, which were presented to the Colorado Legislative Audit Committee and Joint Budget Committee. The Department agreed with all findings and recommendations and committed to begin implementation immediately.

The final report is publicly available via the Colorado General Assembly here: https://leg.colorado.gov/audits/evaluation-colorado-department-corrections-budgeting-practices