There are claims this week that the WA prison system is haemorrhaging money.

Millions have been tipped into the system for no clear reason, according to ABC reports on an alleged internal document.

The reports say WA prisons have eight key areas of “governance concerns” and financial non-compliance, including in staff allowances, invoices for payment for services not yet provided, and employees signing off on payments well over what they are authorised to approve.

The document allegedly dates back to July 2015, and shows the department's then-chief financial officer (CFO) refusing to sign the 2014-15 financial reports due to fears that it was in breach of the Financial Management Act and accounting standards.

In one instance, the 2014/15 annual budget allocation for WA prisons was inflated by $51 million on top of its allotted $841 million.

The assumption was that the extra $51 million would come from a mid-year top up by the Government, despite zero evidence to support the idea.

There was also some concern in the memo about the cost and purpose of changing prison guards uniforms from khaki to blue.

$1.2 million was allegedly budgeted for uniforms in 2014 before a decision to switch colours.

The proposal to change the colour claimed it would reduce costs by 75 per cent because they could be purchased “off the rack” and so not need to be individually tailored

But the supplier of the uniforms advised the relevant committee that the only difference would be the colour.

The change was made anyway, and the cost blew out to $2.3 million.

“Further additional costs associated with obsolete uniforms and the buyback of surplus material appear to have been disregarded,” the CFO reportedly said in the memo.

The ABC says other concerning uses of money include senior executives at the department being paid considerable on-call and after-hours allowances that were not in their industrial agreements.

It is also reporting that a contractor called Red Earth was brought in for a $19,000 six-month pilot program to review injury management in 2012.

It appears that the company was still billing the department with fortnightly invoices in 2015, receiving payments totalling over $300,000 without any scrutiny.

Finally, the document allegedly raised concerned about payments for $447,000 and $44,000 to two contractors were authorised, despite no work having been undertaken and no supporting documentation.

WA Corrective Services Minister Joe Francis said the issues raised in the memo were fixed when Commissioner James McMahon was appointed at the end of 2013.

“Many of the contracts that were signed, were signed under the previous Commissioner which is one of reasons the leadership team at the DCS has changed,” he said.

“The CFO of the department ... for that particular financial year was responsible for all the expenditure of the DCS and I find it amazing that he wouldn't sign off on his own work ... which is one of the reasons he is no longer the CFO.”

Commissioner James McMahon backed the claim that things had improved already.

“We have put in far more systems, we've restructured the finance area, we've restructured the contracts area, we've put more human resources into those areas at a higher level so we can better account for finance and contracts within the department,” he said.

Mr McMahon said the former CFO was not stood down because of these issues.

“I applaud transparency, I applaud the whistleblower scheme, this is what our public service is about — transparency, accountability.”

Shadow corrective services minister Paul Papalia insists the problems have continued after the appointments in 2013.

“This exposes the staggering and disturbing failures of the highest order with regard to expenditure of taxpayers money,” he said.

“Minister Joe Francis and his handpicked commissioner must be held accountable for these poor practises that they put in place. This not a legacy issue.”