A sample of 2,108 purchase orders and 96 prison employee records were selected for analysis. Salaries were estimated for hourly employees on the basis of 2,080 hours per year. The sample consists of $11,253,488.50 in expenditures during fiscal year 1985, accounting for more than 95 percent of the funds spent. Most expenditures pertain to the establishment of the facility. Of the salary and nonsalary transactions, 50.4 percent went to firms and individuals residing within 25 miles of Loretto, an expenditure of $7.6 million. Ongoing expenditures (not construction related) within 25 miles of the facility were $3.7 million. By the end of fiscal year 1986, 48.8 percent of the institution's staff lived within 25 miles of the facility. Seventy-three percent of entry-level positions were held by locals. In addition to analyzing direct prison expenditures, the study identified goods and services purchased by prison employees using their salaries and wages. These consist of 39 categories of goods and services ranging from new construction and retail trade to households, utilities, and primary and fabricated metals. The facility's economic contribution to the community is beyond what might have been expected. 5 tables and 21 references.