The company's directors and the Ministry of Justice have asked City of London Police to look into claims that Serco employees have misrepresented the number of prisoners the firm escorts.
The suspected fraud relates to a £285m contract to transport prisoners to and from courts in London and East Anglia.
The Ministry of Justice said that there was “an apparent disparity between Serco’s records of contract performance, and the actual situation on the ground”.
Some staff were recording prisoners as being ready for court when they were not – a key performance measure for the contract.
The Ministry of Justice (MoJ) is also auditing other contracts held by the company including a deal for the secure transport of 12- to 17-year-old offenders in England and Wales.
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