Audit: HCSO Not Following State Law, Holds Nearly $890K Unclaimed Inmate Funds

The Harris County Office of the Auditor found the Harris County Sheriff’s Office was holding nearly $890,000 in unclaimed inmate funds across more than 50,000 inmate accounts as of last March, and noted that state law requires those balances be returned to inmates upon release. The audit said the funds include “cash people had when arrested and funds sent by family,” and that “These account balances average less than $18.”

The audit identified five problem areas in HCSO’s handling of inmate funds, including failing to regularly reconcile inmate accounts to ensure records match and that the office “lacks formal procedures to routinely review and return funds.” The report described the findings as repeat issues; a prior audit in 2023 found more than $1 million in unclaimed funds, indicating the problem has recurred.

Krishnaveni Gundu, Executive Director of the Texas Jail Project, criticized the sheriff’s office practices and emphasized the scale of the harm: “You're talking about people who don't have much resources to begin with,” and added, “This is somebody else's money that by law needs to go back to them if it was not used.” Gundu called the recurrence “deeply frustrating” and said, “They knew there was an issue. It was very clear what the issues were.” She compared the current audit with the 2023 findings and concluded, “If you look at the current audit and compare it to the previous audit, it looks like no major substantial steps were actually taken to remedy anything.”

Harris County Sheriff’s Office officials responded that the agency has implemented some steps, including “confirming that an inmate visited the bank before leaving the jail and sending letters if the money goes unclaimed.” The sheriff’s office also issued a formal statement: “The sheriff's office is committed to ensuring that all issues identified in the audit are addressed in a timely manner,” and said employee turnover in key financial positions contributed to the problems identified.

Separately, County Audit Department Report #404 examined HCSO CARES Act spending for the period March 1, 2020 to December 31, 2021 and included audit staff Heidi Pinner, CIA, CISA, CFE, CRMA; Margaret Brown, CIA; and Sarah Meredith. That CARES audit recorded “$2.3 MILLION ALLOCATED” and “$2.3 MILLION EXPENDED,” noted “As of reporting $1.65 MILLION EXPENDED AT TIME OF TESTING” and “82% TESTED,” and reported “0 EXCEPTIONS.” The CARES audit snapshot found that “At the time transaction data was used for testing, HCSO had expended approximately 83% of the $2,000,000.00 in CARES funding” and included a NOTE that “At the time of testing, the additional $300,000 had not yet been awarded to HCSO.” The CARES report concluded, “The HCSO designed and implemented effective controls to spend CARES funding for technology improvements, building/grounds improvements, and care of inmates,” and that expenditures tested were in compliance.

The county auditor’s inmate-fund audit highlights gaps auditors say remain in reconciliations, formal procedures and routine reviews; auditors flagged five problem areas but the public record included no detailed corrective-action timeline. To resolve the backlog and comply with the legal obligation to return funds, county auditors and HCSO will need to publish the full inmate-funds audit report, a management response with specific timelines and monthly reconciliations showing progress on reducing the nearly $890,000 held across more than 50,000 accounts. Absent that documentation, thousands of low-balance accounts totaling close to $890,000 will remain unavailable to people the law intends to pay.