BOP uses a network of cost centers—individual accounting units in which costs can be segregated—to obligate, account for, and manage various costs. Managers of each cost center are provided with information to control and manage costs within their area of responsibility. Cost centers can be structured along different dimensions, such as organizational units, operating processes, and activities.centers include Correctional Services, Inside Medical Services, and Food Services at each institution. For example, BOP cost BOP also tracks its obligations and expenditures by budget object and subobject classification. Object classes are categories used in budget preparation to classify obligations by the items or services purchased by the federal government (e.g., personnel compensation, contractual services). Within these object classes, the Department of Justice has assigned subobject class codes that further define the nature of services or articles obligated and provide DOJ with a detail of expended funds. For example, under the personnel compensation object class, BOP has defined subobject class codes for items such as compensation for full- time, permanent appointment employees; overtime; and holiday pay. Object and subobject classes are used for direct tracking of specific items on which funds are being spent (e.g., salaries, supplies, pharmaceuticals, etc.) and are used across all cost centers. To carry out its responsibility for the custody and care of federal offenders, as of June 2014, BOP houses inmates across six geographic regions in 120 federal institutions, 14 privately operated secure contract facilities, home detention, and as of July 2014, 200 residential reentry centers. These federal institutions and other facilities are managed and overseen through the following offices: Central Office. The Central Office, which serves as BOP’s headquarters, consists of nine divisions that provide oversight of major BOP program areas and operations, such as correctional programs and health services, as well as the National Institute of Corrections. BOP’s Program Review Division, which leads BOP’s process for conducting internal reviews of each program or operation at each BOP institution, is among these nine divisions. Grand Prairie Office Complex. This complex, located in Grand Prairie, Texas, was created to consolidate various processes into one location. It consists of three components: human resource services, designation and sentence computation, and field acquisitions exceeding $100,000. Regional offices. BOP has six regional offices, each led by a regional director, covering the Mid-Atlantic, North Central, Northeast, South Central, Southeast, and Western regions of the United States. These offices provide oversight, technical assistance, and training to the BOP facilities located within each region. Residential Reentry Management field offices. BOP has 25 field offices that administer contracts for community-based programs and serve as liaisons with various federal, state, and local groups within their judicial districts. Staff at these offices also monitor residential reentry centers (RRCs), which provide offenders with community- based services to assist with their reentry needs. BOP generally houses sentenced inmates in its long-term institutions. Male long-term institutions include four security level designations–– minimum, low, medium, and high––and female institutions include three security designations––minimum, low, and high. The security-level designation of a facility depends on the level of security and staff supervision that the institution is able to provide, such as the presence of security towers; perimeter barriers; the type of inmate housing, including dormitory, cubicle, or cell-type housing; and inmate-to-staff ratio. Additionally, BOP designates some of its institutions as administrative institutions, which house male and female inmates and specifically serve inmates awaiting trial, or those with intensive medical or mental health conditions, regardless of the level of supervision these inmates require. Prior to passage of the Sentencing Reform Act of 1984, federal judges generally had broad discretion in sentencing. Most criminal statutes provided only broad maximum terms of imprisonment. Federal law outlined the maximum sentence, federal judges imposed a sentence within a statutory range, and the federal parole official eventually determined the actual duration of incarceration. The Sentencing Reform Act of 1984 changed the federal sentencing structure. The act was effective for offenses committed on or after November 1, 1987. The act abolished parole for federal offenders sentenced after its effective date, and subsequent legislation established mandatory minimum sentences for many federal offenses. The Sentencing Reform Act of 1984 also established the independent USSC within the judicial branch and charged it with, among other things, developing federal sentencing guidelines. USSC establishes sentencing policies and practices for the federal criminal justice system that provide certainty and fairness in meeting the purposes of sentencing, avoiding unwarranted sentencing disparities among defendants with similar criminal records who have been found guilty of similar criminal conduct while maintaining sufficient flexibility to permit individualized sentences when warranted. To foster this goal, the guidelines specify sentencing guideline ranges—a range of time (in months) that offenders should serve given the nature of their offense and other factors—but also permit sentences to depart upward or downward from guideline ranges because of aggravating or mitigating circumstances. In 2005, the Supreme Court found the Sentencing Guidelines, which had previously been binding for federal judges to follow in sentencing criminal defendants, to be advisory in nature. Regardless of the guidelines’ advisory nature, judges are still required to calculate properly and consider the Sentencing Guidelines and other sentencing goals. In applying the USSC’s guidance, federal district judges are to determine the appropriate sentencing guideline range for an offender based on various factors related to (1) the offense and (2) the offender. The offense is assigned an offense level; drug offenses are based on several factors, such as the quantity and type of drug involved and whether the offense involved violence. The offender is also assigned a criminal history category based on the number of criminal history points. USSC sentencing guidelines assign criminal history points based on a defendant’s criminal record: A single point is assigned for every other federal or state prior sentence of conviction, subject to certain exceptions. Two or more points are assigned for every prior sentence of imprisonment or juvenile confinement of 60 days or more or for offenses committed while the defendant was in prison; was an escaped prisoner; or was on probation, parole, or supervised release; Three points are assigned if an offender has been previously sentenced or is being sentenced to a prison term of 13 months or more. Taken in combination, the offense level and criminal history category correlate with a sentencing guideline range, expressed in months. For certain types of offenses, including certain drug and weapons offenses, statutorily specified mandatory minimum sentences supplant the lower end of the otherwise applicable guidelines range. While federal law generally requires a sentencing judge to impose a minimum sentence of imprisonment following conviction for any of a number of federal offenses, there are two statutorily provided exceptions. One—the substantial assistance exception—is available upon motion of the government, and allows the court to impose a sentence below the level established by statute as a minimum to reflect a defendant’s substantial assistance in the investigation or prosecution of another person who has committed an offense. The other, commonly referred to as the safety valve, was created by the Violent Crime Control and Law Enforcement Act of 1994 and is available for certain types of defendants for certain drug offenses that carry minimum sentences. During fiscal year 2013, BOP obligated approximately $6.6 billion for all its programs and operations. According to our analysis of BOP’s fiscal year 2013 obligations by cost center, correctional services, privately operated secure contract facilities, medical care, and food services represent the majority (approximately $3.56 billion, or 54 percent) of BOP’s expenses, as illustrated in figure 1. See appendix III for a breakout of cost trends in these and other key cost centers over the last 5 fiscal years. Figure 2 provides further information on the key cost centers represented above. Within its cost centers, the majority of costs across the bureau are payment of staff salaries and benefits. Detailed data on these expenses are tracked using budget object and subobject classifications. These budget classifications are used consistently across all cost centers and represent items or services actually purchased by BOP. Figure 3 shows the budget object classifications that accounted for BOP’s total fiscal year 2013 obligations. As figure 3 shows, personnel compensation and benefits (retirement contributions, health insurance benefits, etc.) account for approximately 59 percent of BOP’s overall obligations. Moreover, BOP’s personnel costs are actually higher than 59 percent because compensation for other staff employed on a contractual basis is included in the “other contractual services” object class. This object class consists of privately operated prison expenses, outside medical services, and other items—as well as contract staff—and accounts for nearly 26 percent of fiscal year 2013 obligations. See appendix IV for more detailed data on object and subobject class obligations from fiscal years 2009 through 2013. BOP’s Director, in an April 2014 statement before Congress, highlighted BOP’s commitment to stewardship of financial resources by seeking cost avoidance and greater efficiencies throughout the bureau.accordance with this focus, BOP has embarked on a number of initiatives in recent years that have resulted in actual or projected cost savings. Key initiatives for which BOP has estimated cost savings over the last 3 fiscal years are listed in table 1. These efforts reflect a focus on the part of both BOP management and staff to identify and implement cost savings initiatives, on both a large and a small scale. BOP-developed estimates of savings from these efforts total about $61 million, which is just under 1 percent of total obligations for fiscal year 2013. BOP officials stated that since such a large component of BOP’s costs is related to paying salaries and benefits necessary to manage its inmate population, their ability to recognize cost savings beyond those efforts presented here is fairly limited.