State lawmakers have tentatively approved a bill to audit a privately run Arizona prison that holds more than 1,800 Hawai'i convicts.

House Finance Chairman Marcus Oshiro said state Auditor Marion Higa likely would need to contract with a Mainland auditing firm to conduct the performance audit of Saguaro Correctional Center, a new 1,896-bed prison in Eloy, Ariz., that houses only male prisoners from Hawai'i.

The audit is expected to cost $150,000 or more, but Oshiro said it will be "money well spent" to scrutinize the Saguaro operation and the state contract with Corrections Corporation of America.

Hawai'i pays CCA more than $50 million a year to house more than 2,000 male and female convicts from Hawai'i in private prisons in Arizona and Kentucky.

Hawai'i first began sending prisoners to the Mainland in 1995 as a temporary measure to relieve in-state prison overcrowding. About half of the state's prison population is now held in out-of-state facilities.

According to Senate Bill 2342, "there has never been an audit of the private Mainland prisons that Hawai'i has contracted with to house the state's inmates, despite the fact that deaths and serious injuries have occurred at several of the contract prisons on the Mainland."

Oshiro said, "I think it's prudent to spend some monies for the audit and review to make sure that we're getting the best services for our money." The bill goes to the full House for a floor vote, and if approved will be sent to a House-Senate conference committee to iron out differences between the House and Senate versions of the bill.

The Senate proposed auditing both Saguaro and the Otter Creek Correctional Center in Kentucky, where about 175 Hawai'i inmates are being held. However, Oshiro said supporters of the bill told him the Saguaro audit was more important because more inmates are there, so the audit of Otter Creek was dropped from the House draft of the bill.

Clayton Frank, director of the state Department of Public Safety, has opposed the bill because state prison officials already conduct quarterly audits of the Mainland prisons that check up on programs, food service, medical service and security, among other areas.

"The department already has the expertise in place and is currently providing a thorough and ongoing auditing process to ensure contract compliance is being met," the department said in a written statement Monday. For situations that require immediate attention, "we have dispatched appropriate senior staff and Internal Affairs investigators to the facilities," the statement said.

The bill for an audit is advancing after recent Mainland media reports cited a former CCA manager who said he was required to produce misleading reports about incidents in CCA prisons.

Time magazine interviewed former CCA senior quality assurance manager Ronald T. Jones, who said CCA General Counsel Gus Puryear IV ordered staff to classify sometimes violent incidents such as inmate disturbances or escapes as if they were less serious events to make the company performance appear to be better than it was.

Jones alleged more detailed reports about the prison incidents were prepared for internal CCA use, and were not released to clients. CCA denied the allegations, which Time published as Puryear is being considered for a post as a federal judge.

Oshiro said he is aware of those reports.

"There's questions being raised right now, given what you read about nationally about the CCA organization maybe having two sets of books, and I think it causes some concerns, especially since we don't get to observe and watch or communicate with our inmates being that they are way out there in the Mainland," Oshiro said.

The statement Monday from Department of Public Safety noted that the department "does not solely rely on CCA reports or internal audits. As the customer, we feel it's not only our right, but also our responsibility to Hawai'i offenders housed in CCA facilities, to send our own staff to the Arizona and Kentucky facilities."