Private security firm G4S has agreed to pay back £23.3m after admitting the way it billed the UK government for tagging offenders was "not appropriate".
But G4S insisted its own review into the matter had found no evidence of dishonesty or criminal conduct.
A National Audit Office report has also revealed a G4S whistle-blower raised concerns about company practices.
It comes after an audit suggested the firm had been charging to tag criminals who were either dead or in jail.
ApologyIn July, the Ministry of Justice (MoJ) revealed that G4S and a second security company, Serco, had overcharged the government by "tens of millions of pounds" on their electronic tagging contracts.
The audit by accountancy firm PricewaterhouseCoopers - which had been launched in May - alleged the charging discrepancies had started at least as far back as the start of the current contracts, in 2005, but could have dated back to the previous contracts in 1999.
G4S said an independent review of the contract, run by law firm Linklaters, showed it had wrongly considered itself contractually entitled to bill the government when equipment had not been fitted or after it had been removed.
- £7.3bn turnover
- Pre-tax profit: £516m
- Quarter of turnover relates to government contracts
- Half of business in Europe
- Value of government contracts: £394m
In a statement G4S said: "This billing practice, which the company believes was confined to the electronic monitoring contract for England and Wales, was not consistent with the contract or G4S's values and the company has apologised to the MoJ and issued credit notes totalling £23.3m for amounts incorrectly billed between 2005 and May 2013."
It added that a further credit note of £800,000 would be issued to cover the period from June 2013 to date and it had also paid external investigation costs of around £2m.
Meanwhile, the NAO says allegations about practices at the company were made in March this year by a G4S whistle-blower who had been working at a call centre handling calls concerning the firm's tagging contract.
On Serco, the NAO said: "Serco has stated to us that it considers it charged in line with its genuine interpretation of the contract and that it was open about this to the Ministry [of Justice] throughout. Serco has stated publicly that it will refund any agreed overcharges."
The Serious Fraud Office has launched an investigation into G4S and Serco, and both firms have said they are "co-operating fully".
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