Correctional Services Corporation Finalizes Amendment to Juvenile Contract in Puerto Rico.

Business Editors

SARASOTA, Fla.--(BUSINESS WIRE)--Aug. 28, 2001

Correctional Services Corporation (Nasdaq:CSCQ) today announced it has finalized an amendment to its Bayamon Treatment Facility contract. The amendment, which is effective as of July 1, 2001, adjusts the per diem from $119.10 to $130.00 per bed per day. The amendment increases the total budgeted revenues of the contract by $700,000 annually to $6,690,450 per year. The term of the amendment is for the fiscal period July 1, 2001 - June 30, 2002.

Commenting on the amendment James F. Slattery, President and CEO stated: "While this amendment has taken more time than originally expected, we are pleased the new administration in Puerto Rico was committed to its completion. Our treatment facility in Puerto Rico continues to deliver excellent services, which was clearly an important decision factor in the administration's desire to work out a mutually agreeable solution to the economic difficulties we have experienced."

Mr. Slattery further stated, "The Bayamon Facility has been a drain on our corporate financial results for some time. This improvement in its financial terms plus changes to contracts or closure in other under-performing facilities will play a large role in the company's return to profitability and earnings growth."

Through its Youth Services International subsidiary, the Company is the nation's leading private provider of juvenile programs for adjudicated youths with 29 facilities and over 4,100 juveniles in its care. In addition, the Company is a leading developer and operator of adult correctional facilities operating 12 facilities representing approximately 4,500 beds. On a combined basis, the Company provides services in 17 states and Puerto Rico, representing approximately 8,600 beds including aftercare services.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained in this press release are not historical but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These include statements regarding the expectations, beliefs, intentions or strategies regarding the future. The Company intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's views as of the date they are made with respect to future events and financial performance, but are subject to many uncertainties and risks which could cause the actual results of the Company to differ materially from any future results expressed or implied by such forward-looking statements. Examples of such uncertainties and risks include, but are not limited to: fluctuations in occupancy levels and labor costs; the ability to secure both new contracts and the renewal of existing contracts; the availability and cost of financing to redeem common shares and to expand our business; and public resistance to privatization. Additional risk factors include those discussed in reports filed by the Company from time to time on Forms 10K, 10-Q and 8-K. The Company does not undertake any obligation to update any forward-looking statements.