The complaint alleges the private company that runs New Castle Correctional Facility censored the Prison Legal News magazine.
The state will perform its own internal auditing, forfeiting about $350,000 in federal grant money annually.
Lawmakers won’t have more information about how the state’s criminal code overhaul will affect local community corrections funding until at least December.
Department of Correction representatives appeared in a federal court Wednesday to outline their plans for improving treatment of mentally ill inmates.
The Department of Correction is set to appear in District Court on Wednesday afternoon to answer allegations of mistreating mentally ill inmates.