An employment investigation found a female Corrections officer at Otago Corrections Facility failed to maintain appropriate boundaries with a male prisoner.
However, the findings of the investigation were overruled by the prison's director and the woman remains working for the Department of Corrections.
The revelations come after a summary of the investigation - relating to an allegation of an inappropriate relationship between the officer and prisoner in May last year - was released under the Official Information Act.
The department initially declined the Otago Daily Times' request for a redacted copy of the investigation report, citing privacy grounds. However, after a complaint to the Ombudsman, a summary of the report was made available to the ODT last week.
It revealed an investigating officer and human resources adviser found the Corrections officer spent time alone with a prisoner in the prison's engineering workshop.
The investigation involved reviewing CCTV footage, interviewing relevant people, a scene examination and a review of documentation related to the incident.
The prisoner and the officer gave conflicting evidence.
''The employment investigation found that the Corrections officer spent time alone with a prisoner in the engineering workshop and that the Corrections officer failed to maintain appropriate boundaries with the prisoner,'' the summary of the report said.
''These concerns are held for the following reasons:
- ''The prisoner is adamant that he saw the Corrections officer and engaged in conversation for ... 10 to 15 minutes. The Corrections officer stated in their interview that they did not see the prisoner nor speak with him.
- ''The statement by the Corrections officer is determined to be highly unlikely, as the evidence shows the prisoner and Corrections officer entering the engineering workshop within one minute of each other.''
Despite this, OCF's director found the allegation of failing to maintain appropriate boundaries was not proven and ''therefore the allegation of inappropriate behaviour or relationship was not upheld''.
''This allegation is not substantiated as there is no evidence that the Corrections officer and prisoner entered a non-monitored room together,'' the summary said of the director's decision.
''The prison director decided that the Corrections officer acted with careless or unsafe behaviour as the Corrections officer's behaviour in this respect had fallen short of the expectation of the Department and is in breach of the ... code of conduct.
''The Corrections officer was issued with a written warning.''
A Corrections spokeswoman confirmed on Friday the officer remained with the department.
When asked why the prison director overruled the findings of the investigators, she said: ''The prison director considered the layout of the area that the prisoner and staff member were seen entering and exiting, the proximity of others at the time, and disparities in the evidence provided by the prisoner and staff member.
''In doing so, he could not corroborate what the prisoner had told the investigator and came to the view that while they had both entered a large unmonitored area, it had not been proven that the two were in the same place at the same time in the building.''
Corrections did not wish to comment further.