The Correctional Privatization Commission renewed contracts for two private prisons, Bay Correctional Facility and Moore Haven Correctional Facility, although neither prison had provided the required 7 percent level of cost savings during fiscal year 1996-97. The report questions the Commission’s contract modification that resulted in a 785,936 dollars additional payment to Corrections Corporation of America to operate Bay in fiscal year 1998-99. The Department of Corrections increased the percentage of medium custody inmates at Bay and Moore Haven, which enabled the State to benefit from the security available at those prisons. Private prison canteen profits and telephone commissions are being deposited into a new trust fund created by the 1998 Legislature. The report recommends that the Commission use performance-based program measures to evaluate the performance of the private prison vendors and to compare private prison performance to that of State prisons. The report reviews findings and recommendations from the Commission’s 1998 report. Notes, tables