Activity Based Costing of Probation with
and without Substance Abuse Treatment: A Case Study
Farrokh Alemi,1* Faye Taxman,2
Victoria Doyon,3 Meridith Thanner,4 Heibatollah
1Ph.D., College of Nursing
and Health Science, George Mason University, Fairfax, VA, USA
2Ph.D., Bureau of Governmental Research,
University of Maryland College Park, College Park, MD, USA
3College of Nursing and Health Science,
George Mason University, Fairfax, VA, USA
4Bureau of Governmental Research, University
of Maryland College Park, College Park, MD, USA
* Correspondence to: Farrokh Alemi, Ph.D., Acting Assistant Dean of
Graduate Health Science, George Mason University, College of Nursing and Health
Science, 4400 University Drive, Fairfax, Virginia 22030-4444, USA
Tel.: +1-703-993 4226
Fax: +1-703-993 1953
Source of Funding: R01DA10705 National Institute on Drug Abuse, NIH.
Many offenders have drug problems and investigators
propose drug testing/ treatment be a part of probation. In 1994,
the Office of National Drug Control Policy (ONDCP) funded a demonstration
of integrated substance abuse treatment and traditional supervision
--‘‘seamless’’ probation co-located treatment providers and probation
officers. This study examines “seamless” care costs using Activity
Based Costing (ABC). An agency budget analysis allocated program
costs based on a probation officer activity questionnaire. The cost
of “seamless” for one offender is derived from total program cost
divided by standardized units of probation activities. Preliminary
reliability tests show the instrument accurately portrays an allocation
probation officer time including: 6.9% time in seamless supervision
and 83.3% in traditional supervision. Comparisons show seamless
activities in “group meetings” and “offender phone contact” are
higher compared with traditional probations. The average cost per
offender per day was $12 for seamless probation and $7 for traditional
Background: Since many offenders have drug problems, investigators
have proposed that drug testing and treatment should be an integral part
of probation. In 1994, the Office of National Drug Control Policy (ONDCP)
funded a demonstration project designed to integrate drug treatment with
traditional supervision services. As part of this demonstration a new
procedure called ‘seamless' probation was set up in which treatment providers
were co-located with probation officers and probation officers coordinated
offenders' participation in treatment.
Aims of the Study: This study examines the cost of providing substance
abuse treatment coordination through probation agencies.
Methods: We used Activity Based Costing (ABC) to examine the cost
of probation with and without treatment coordination in one probation
agency. Agency budget was analyzed and allocated to various programs.
A questionnaire was developed to assess probation officer's activities.
The cost of coordinating treatment for one offender was calculated by
dividing the total cost of the program by units of various activities
done by the probation officers.
Results: Preliminary test of reliability of the instrument showed
that it was accurately portraying the probation officers time allocation.
Probation officers spent 6.9% of their time in seamless supervision and
83.3% time in traditional supervision (83.83%). The seamless probation
officers had more group meetings and more phone contact with their offenders
than traditional probation officers. The average cost per offender per
day was $12 for seamless probation and $7 for traditional probation.
Discussion: This study is limited because it focuses on one agency
at one point in time. Results may not be relevant to other agencies or
to the same agency as it makes its operation more efficient. This study
provides a method of allocating budget cost to per client costs using
survey of probation officer's activities -- a tool developed in this study.
Comparison of seamless and traditional supervision activities showed major
differences in terms of the probation officers' activities and costs.
Implications: There are significant costs associated with asking
probation officers to coordinate treatment. Studies should be undertaken
to examine the relative benefits that can be derived from this increased
Received 27 May 2003; accepted 18 February 2004
Copyright © 2004 ICMPE