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"While the $1 million payment does not reflect a specific number of hours, due to the complexity of the issue it was determined by IDOC officials to reasonably cover the State's costs related to the staffing matter," IDOC and CCA wrote in a joint statement. "The agreement also fulfills CCA's commitment to make taxpayers whole on the issue." Click below for a full report from AP reporter Rebecca Boone.

BOISE, Idaho (AP) — Corrections Corporation of America will pay Idaho $1 million for understaffing the state's largest prison in violation of its contract, according to a settlement agreement announced late Tuesday.

The Nashville, Tenn.-based CCA acknowledged last year that its employees falsified staffing records given to the state, making it look as though thousands of hours of mandatory guard posts were filled when they were actually left vacant for months. The vacant posts and phony records violated not only CCA's $29-million annual contract to run the Idaho Correctional Center, but also a federal settlement agreement reached with inmates who sued claiming the understaffing led to rampant violence.

"While the $1 million payment does not reflect a specific number of hours, due to the complexity of the issue it was determined by IDOC officials to reasonably cover the State's costs related to the staffing matter," IDOC and CCA wrote in a joint statement. "The agreement also fulfills CCA's commitment to make taxpayers whole on the issue."

The state is also denying CCA's annual $350,000 contract increase, which is intended to cover inflation. CCA reported revenue of $1.7 billion in 2012.

The Idaho Department of Correction is currently in the process of taking over the 2,080-bed Idaho Correctional Center. Idaho Gov. C.L. "Butch" Otter, long a supporter of private prisons, announced the takeover earlier this year, saying that the problems at the facility made the state takeover the right thing to do.

The move to end CCA's contract, which expires June 30, came months after a report by The Associated Press raised questions about how CCA was staffing the prison. After the AP story was published, the Idaho Department of Correction asked the Idaho State Police to investigate the prison and CCA for possible contract fraud or other problems. The results of the state police investigation are expected to be released this week.

Idaho Department of Correction Director Brent Reinke declined to give details of the settlement process or the police findings, saying that more details would be released during the Board of Correction meeting scheduled for Wednesday.

"What we worked on was a joint statement," Reinke said. "The statement basically speaks for itself ... they've been working on this now for several weeks."

Otter's spokesman Jon Hanian said the governor was on a plane and couldn't be immediately reached for comment. Phone messages left for key lawmakers on criminal justice committees were not immediately returned Tuesday night.

CCA spokesman Steven Owen says that while there have been challenges at the Idaho prison, the company has been responsive to Idaho's concerns.

"With this agreement, we fulfill the commitment CCA made from the beginning to make taxpayers whole on the staffing issue. We've worked in complete cooperation with the state in its review, and we've also worked very hard to ensure this never happens again," Owen said in a prepared statement. "We've provided exceptional value to Idaho's taxpayers through cost savings, which allows the state to deploy its limited resources toward other priorities."

Last fall, U.S. District Judge David Carter found CCA in contempt of court for understaffing the prison in violation of a settlement reached three years ago with Idaho inmates and the American Civil Liberties Union. The judge warned the company that any continued understaffing would bring fines of $100 an hour and that he would raise the fine to $500 an hour or more if things didn't change at the prison.