This annual report provides the results of an audit to determine the extent to which the Tennessee Corrections Institute met its legislative mandate; to assess the efficiency and effectiveness of management's organization and use of resources to accomplish the Institute's mission; and to make recommendations that might result in more efficient and effective operation of the Institute. Findings indicate that all local correctional facilities are not inspected annually; statutorily mandated research activities have been very limited in recent years; field staff's activities are not adequately documented; the Board of Control has no procedural rules to structure its activities; the Institute's policies and procedures manual has not been updated recently; and the Board of Control does not have a representative from Youth Corrections. In addition, the audit addresses several issues which affect the Institute and local correctional facilities; the Institute's lack of power to directly enforce compliance with its standards; the Institute's training of local correctional staff; and comments by the Institute's clients regarding its staff and services. Issues for legislative consideration also are suggested. An organizational chart for the Institute is provided.