Mississippi prison work nonprofit lost $5M, PEER report finds
By Mina Corpuz | Originally published by Mississippi Today
A workforce and reentry nonprofit funded with proceeds from the state’s prison industries and grants has lost over $5 million for the past two fiscal years, Mississippi’s legislative watchdog committee found.
MAGCOR also lacks a documented financial system with internal controls resulting in at least one documented instance of fraud and abuse, according to the Joint Legislative Committee on Performance Evaluation and Expenditure Review.
“Internal controls help to protect assets and reduce the risk of misstatements resulting from errors, omissions, oversights, and fraud,” the committee wrote in a report released Thursday.
That note stems from a questionable expense from last year that MACGOR’s current CEO, Garrett McInnis, informed PEER about and asked the state auditor’s office to investigate. The auditor’s office concluded that former CEO Bradey Lum embezzled funds and issued a payback demand of about $26,500. Lum repaid the money, according to the auditor’s office.
PEER also raised concerns that, rather than having an in-house staff member oversee financials, the nonprofit uses an external comptroller and independent auditors.
In MAGCOR’s response to the findings, Chief Business Officer Daguerre Henry welcomed PEER’S review and recognized opportunities for improvement. But she also asked for the committee to look at the findings with the appropriate context to be able to see changes MAGCOR has made to its financial reporting, internal controls and more.
For example, Henry said the bulk of the Fiscal Year 2025 net loss is attributed to the $2.7 million sale of a portion of the former Jackson Metrocenter Mall.
MAGCOR also responded to net income loss from programs at the various prisons. PEER listed several that had a net loss in the past two fiscal years, including the metal fabrication program at the Central Mississippi Correctional Facility in Rankin County, garment production program at the Mississippi State Penitentiary at Parchman and a recycling operation.
Henry wrote that programming is periodically evaluated based on workforce-development value and financial performance. This helped make the decision to discontinue a textile operation at the South Mississippi Correctional Institution and the recycling program at the Jefferson-Franklin Regional Correctional Facility, she said.
“MAGCOR remains committed to accurate and timely financial reporting, strong internal controls, sound financial stewardship, and continuous improvement while continuing to fulfill its statutory mission of providing meaningful work experiences and employment opportunities to individuals in the custody of the Mississippi Department of Corrections,” Henry wrote in the organization’s response.
PEER recommends periodic evaluation of work programs and activities to balance profit and ensure they offer skills for prisoners upon release, adoption of a comprehensive system of internal controls and the hiring of a full-time, in-house, senior level employee responsible for accounting and financial operations.
Questions about MAGCOR’s spending have been on lawmakers’ radar since the beginning of the year when House Corrections Committee Chair Becky Currie, a Republican from Brookhaven, asked PEER to look into the nonprofit’s financial records.
On Friday, spokesperson Blake King told Mississippi Today that McInnis has taken an unpaid leave but remains part of the nonprofit’s team.
Reporter Michael Goldberg contributed reporting
This article was originally published by Mississippi Today and is republished here under a Creative Commons license.
Source: Original Article
