The Corrections Department is paying thousands of dollars a night for hotel rooms for the extra guards it needs at Mt Eden prison.
Up to 40 guards at a time have been put up in hotels in central Auckland over 18 months.
Corrections says it has negotiated a significantly discounted rate for all the hotels.
It has been forced to bring guards in from around the country since it took over running Mt Eden jail in June 2015, shortly before fightclubs were exposed there.
Private operator Serco lost the Mt Eden contract and paid $8 million in a settlement.
Accommodation for guards includes the four-and-a-half star Adina apartment hotel which online has rooms at a sale price of $200 a night midweek.
In a statement, Corrections said the price it had negotiated was "commercially sensitive but is ... a significantly discounted price from the hotel's normal rates."
But the department's northern regional commissioner confirmed it had paid about $2m for hotel accommodation over the past 18 months.
ACT party leader David Seymour said it "beggars belief" that Corrections could not have found cheaper accommodation by now.
"You have to wonder if they have no respect whatsoever for taxpayers' money or just lack the wits to solve long-term problems."
Department of Corrections northern regional commissioner Jeanette Burns said it was the best deal for staff and the accommodation was "very modest" for Auckland.
"This hotel that we've got our staff in ... have negotiated a very good rate with us," she told Morning Report. By comparison some hotels would charge $400 a night, which the department would not pay.
"I think it is a good use of taxpayers' money to look after your staff decently to run a safe and secure prison," Ms Burns said.
Some of the cost was coming out of the $8m settlement
Prison guards' union the Corrections Association said 35-45 guards a week were being put up in hotels.
National president Alan Whitley said Serco should foot the hotel bill.
"Serco was unable to supply the amount of staff to run it. We've had to prop it up and the staff need to have somewhere to stay while they're up there."
Mr Seymour said even if the hotel bills were being paid for out of the $8 million Serco settlement, that excused nothing.
"The real question is why they couldn't work out cheaper accommodation than living in a hotel."
Corrections Minister Judith Collins declined to be interviewed but in a statement said the department had assured her it had explored numerous accommodation options, and this was the most appropriate.
Corrections said it was recruiting new staff and once they were trained, guards would no longer have to be brought in from other areas.
"We would have liked to have ... reduced the numbers a bit more by now but we had to increase the capacity of that prison by another 80 beds due to the rise in prison muster," Ms Burns said. The number of guards being brought in should be reduced by February.