The private company running Mount Eden Prison has been found to have fallen short in several areas during its first eight months of management.
A Corrections Department report on Serco says two prisoners were wrongfully released and the company was fined $150,000 after a prisoner escaped.
The report shows Serco fell significantly short of its prisoner management plan targets and failed to provide reports on rehabilitation pathways and prisoners' mental and physical well-being.
Corrections Minister Anne Tolley says there needs to be some time for bedding in, and Serco says it should be meeting its targets within the next four months.
The Labour Party says the report shows the private prison operator, which is set to take control of the new Wiri Prison, is not up to the job.
Justice spokesperson Charles Chauvel says Serco has had ample time to meet all its set targets and the Government should rethink its plans to double the company's prison capacity.