How Do Offender Monitoring Companies Make Money?

Electronic monitoring companies keep track of perpetrators who are given the chance to serve time at home in lieu of jail. These offenders have committed various crimes, including alcohol or drug abuse, petty theft and sex-related crimes. The system is one way to reduce the overcrowding of jail cells, and it costs tax payers less money than jail time. The electronic monitoring equipment can include ankle devices, exterior surveillance, video screens and alcohol breathing devices. Companies that conduct offender monitoring have several ways they make money.

Bidding System

Offender monitoring usually starts with a bidding process, according to The Geo Group, experts in private corrections and detention management. The monitoring companies are usually asked to present their products, services and prices to state police departments or government agencies, including Homeland Security, the Department of Defense, U.S. Customs, or the local state highway patrol. The state or government agency then offers the company with the lowest price and best capabilities the job. Contract times may vary according to each agency's policy, and some contracts may be extended. The state or federal government pays the monitoring company by month or however the payment arrangements are set up.

User Payments

The offenders also pay for use of the equipment and monitoring. For example, in 2010, the Corrections Center of Northwest Ohio charged each offender $10 to $15.50 per day, depending on the type of equipment required. Part of the money goes toward paying the small monitoring company a stipend for each person it tracks. This arrangement helped save taxpayers from typical incarceration expenses, which averaged about $67 per day in Ohio at the time the Corrections Center of Northwest Ohio published this information.

Personal Services

Small monitoring companies also charge for surveillance personnel who monitor perpetrators via the Internet. For example, a state police department may pay the company to track Internet usage in certain areas, especially if they suspect the improper dissemination of pornographic materials or activity. Part of the company's analysis may include infiltrating commercial web sites and identifying those who subscribe to pornographic services. Company representatives may work closely with the police, or be paid to integrate monitoring systems with the police department's network.


Auctions may be held to sell the monitoring equipment, which is another way these companies earn money. A monitoring company may sell new or used equipment to police departments or government agencies. Moreover, some of these companies may offer similar equipment for commercial use. For example, a retailer may want to track pilferage in his store and, therefore, purchase cameras and monitoring equipment. The retailer may purchase the equipment outright or pay the company on credit.