What happens when an inmate is caught with cell phone or is caught using drugs? Is it true that the prison staff will bring in contraband for the inmates? Or do they lend their own personal cell phone to the inmates?

Neither are good things to happen to an inmate. The first thing that happens is the corrections officers take you into custody, in handcuffs, the whole thing, and you are taken to the Special Housing Unit, or the SHU, also known as "the Hole", or solitary confinement. You will stay in the SHU until you have a Disciplinary Hearing to determine your fate. The penalty is usually a lengthy stay in the SHU, like 6 months to a year or more, plus no visitation, no commissary, and phone privileges limited to a single 15-minute call per week.

Cellphones and drugs are smuggled in by guards, compound workers or visitors. The lending of phones by the guards could happen too.