Briefs: Sensitive information processed by inmates; pension funding improves

Maryland correctional services shoulder patchA year after a new law was signed prohibiting inmates from having access to people’s sensitive personal information, an audit found that inmates in Maryland Correctional Enterprises doing data entry could see some Social Security numbers.

Unauthorized access to sensitive data was the only finding in the report released on Tuesday by the Office of Legislative Audits.

The Department of Health and Mental Hygiene sent physicians’ Medicaid health insurance claim forms to Maryland Correctional Enterprises, and inmates did the work of inputting claims. CORRECTION: According to the audit, MCE the Health Department first ran the forms through a computer program that was intended to redact Social Security numbers. However, auditors found that while most numbers were removed, some Social Security numbers still appeared on some of the forms processed by the inmates.

Maryland Correctional Enterprises officials were unaware of the Social Security numbers on the forms until the audit was done, the audit said.

Auditors could not estimate how many un-redacted forms went through the inmates. Over a two-day period, they said, about 3,000 total forms were processed.

Inspired by a previous audit that found prisoners working to sort sensitive paperwork, Del. Charles Barkley, D-Montgomery County last year won pass for a bill making it illegal for inmates to process paperwork with sensitive information. The bill became law last June.

Barkley said on Tuesday that adherence to the new law needs to be double-checked.

“It looked like some slipped through,” Barkley said. “It is not an easy process to redact everything. …We should follow up with them and make sure it has stopped.”

In response to the audit, Maryland Correctional Enterprises CEO Stephen Shiloh said that the inmates would no longer by processing documents that could contain sensitive information. Barkley called that a “good response.”

Pension changes improve system, officials say

The pension reforms put in place last year by the General Assembly are already beginning to show signs of improving the system.

“You have put the system on a path to sustainability going forward, and we’re happy to manage that,” said Maryland State Pension System Executive Director Dean Kenderdine.

Kenderdine and other retirement system officials spoke to the House Appropriations Committee about the status of the system after several far-reaching reforms were put in place during the 2011 legislative session. The goal of the changes is to bring the system back to where it could fund 80% of its members’ pensions. With the changes and investment projections, the system is on track to be funded at 80% in 2021. Currently, the system is about 64% funded.

The larger changes included increasing existing employees’ contributions to the system – a 2% change for most – and determining retirees’ cost-of-living adjustments based on investment portfolio performance. Pensions will be based on salaries from a larger span of years. Additionally, new employees will get less of a pension and have more limitations on when they can retire.

Also, a large portion of the savings is being reinvested to raise more funds for the system.

“The most prudent solution is making changes in system to ask more of employees,” Kopp said. “The plan brings less to new employees, but it will continue to provide the security a defined benefit plan brings.”

With the pension reforms, fiscal year 2013 is set to have the state saving nearly $311 million on pension costs, Kenderdine said. Of that, about $191 million is earmarked for more reinvestment.

Right now, the pension system is projecting to make a 7.75% return on investments every year.

National pension reform groups such as Truth in Accounting have said such returns are unrealistic, and that Maryland’s pension liabilities are higher than estimated.

— Megan Poinski

About The Author

Len Lazarick

Len Lazarick was the founding editor and publisher of and is currently the president of its nonprofit corporation and chairman of its board He was formerly the State House bureau chief of the daily Baltimore Examiner from its start in April 2006 to its demise in February 2009. He was a copy editor on the national desk of the Washington Post for eight years before that, and has spent decades covering Maryland politics and government.

1 Comment

  1. Dale McNamee

    How moronic ! The “big brains” who created this mess should be jailed !  They didn’t even think of the consequences BEFORE enacting the program !

    The state needs more “revenue”…