The makeup of the inmate community in terms of race, age, and criminal record has little effect on how institutions are operated

This statement is false.
The makeup of the inmate community in such terms as race, age, and criminal record can actually affect how institutions are operated. Take prisons as your example - 'hardcore' criminals will be paid attention to a lot, whereas petty criminals will probably be given probation because there aren't enough prison cells to accommodate them. So, criminal record affects how the institution of prison is operated.