The £700m tagging contracts were signed in 2004
Two major private security firms face an investigation into whether they were overpaid for contracts to electronically tag criminals.
G4S and Serco will be investigated after Ministry of Justice officials identified potential “billing” issues.
Justice Secretary Chris Grayling said the companies had promised to reimburse his department if errors had been made.
Both firms defended their services and said they were co-operating fully with the audit.
The contracts are worth £107m a year but unions say this could rise to more than £1bn by 2015.