WA's first and only prison dedicated to young male offenders, which opened just over a year ago, will be told to improve after a Stanley knife and seven blades disappeared from its art room.
Wandoo Reintegration Facility, which is run by private contractor Serco, was put into lockdown last week after staff discovered the tools were missing and searched the prison.
The missing knife and blades were not found, prompting the Department of Corrective Services to say it will issue Wandoo with a "performance improvement notice" for breaching its service obligations.
The department said interviews with staff and inmates led prison management to conclude the missing tools had been thrown away but their disposal not recorded on the tool register.
Shadow corrective services minister Paul Papalia said it was "disturbing" the knife and blades remained unaccounted for and the situation posed a significant threat to staff.
The incident at Wandoo, which became WA's second prison to be privately run, comes after a series of escapes and alleged failings relating to Serco-run services in WA.
Last month, two Wandoo prisoners escaped while doing community work in Alfred Cove.
They were recaptured the next day and Serco was fined about $25,000 under its contract.
_The West Australian _ understands Wandoo, a minimum-security prison for men aged 18 to 24, was in lockdown for most of last Tuesday while officers searched for the missing tools.
The department said that it had been notified of the missing tools, which had not been found after a thorough search.
"The department has liaised with Wandoo to ensure a more robust tool auditing process is in place," a department spokeswoman said.
"The department will also issue a performance improvement notice to Wandoo to ensure ongoing compliance."
A Serco spokesman said that after a routine tool audit, an inquiry was held to find the missing tools that were used in the prison's education program.
"The inquiry found that the craft knife and blades had been disposed of in a waste bin but not recorded as disposed," he said.
"We are satisfied that the process and management program worked correctly so that safety of the facility was maintained."
Wandoo, which became fully operational in May last year under a five-year contract with Serco, has capacity for 80 prisoners, although only 48 had been placed there by last July.
The prison, which was given its first performance improvement notice in July, faces fines of up to $10,000 if it fails to comply with the notice and ultimately having its contract terminated.
Wandoo works specifically to prepare inmates for release by helping them to get employment, education and training and stop reoffending.
The State Opposition and unions have called for an inquiry into Serco's handling of WA prisoner transport after three prisoners escaped last month.
Investigations are continuing into how two maximum security prisoners kicked their way out of a prisoner van in Geraldton and how a remand prisoner escaped after being escorted to the toilet at Joondalup Health Campus.