Northern Ireland's justice system must "rethink" prisoner escort and court custody arrangements, a report finds.
It was carried out by the Criminal Justice Inspection (CJI) and looked at how prisoners were transported by the NI Prison Service, as well as the Court Custody Service and PSNI.
It also examined the work undertaken by two private contractors.
The report said the £300,000 bill for sick leave could be reduced by contracting the work out.
CJI Chief Inspector Michael Maguire said the majority of the work in 2009-10 was carried out by the NIPS Prison Escort and Court Custody Service.
"With around 18,000 prisoners escorted to and from courts, prisons, hospitals, police custody, interviews and juvenile detention centres and over 200,000 people each year moving through the court system, prisoner escorting and court custody is an important element of the work of the criminal justice agencies in Northern Ireland," he said.
"During 2009 there were no releases made in error, the number of assaults on prisoners by prisoners was low and the majority of prisoners arrived on time for their court appearance.
"The inspection however showed that the overall efficiency of the escorting and court custody service is not easily measured as it is made up of four main agencies and a number of providers, each with their own way of undertaking business."
The report also considered the work undertaken by two private contractors, G4S and Resource, on behalf of the United Kingdom Border Agency and Woodlands Juvenile Justice Centre.
The report found that the service was delivered "within budget".
'Safe and humane manner'
It also noted that the cost of sick absence within the service was around £300,000 per year.
Dr Maguire said this is "a saving that could potentially be realised if this risk was transferred via a fixed price contract to a third party supplier".
He indicated that savings could also be achieved - and police officers freed to undertake front line policing duties - if the PSNI contracted out its responsibility for providing prisoner escort and court custody arrangements for about 7,000 prisoners each year.
The report also identified inconsistency between the four prisoner escort and court custody service providers in relation to some practices such as the handcuffing of prisoners.
"While this report has identified a number of areas where improvements can be made in how these services are delivered, inspectors found that in the main, prisoners were treated in a safe and humane manner and the service in general, met the needs of the court system and was operating to an acceptable standard," said Dr Maguire.
The Chief Inspector of Criminal Justice also welcomed the use of video-links between Northern Ireland's prisons and courts to conduct about 60% of all court hearings.
The report suggested that assigning a court on a full-time basis to video-liked hearings would reduce the number of people being transported to and from court; minimise the number of prisoners held in court custody; and cut the costs involved in both escort and court custody duties.
Justice Minister David Ford welcomed the report's publication.
"While the overall assessment of performance shows that arrangements are operated to an acceptable standard and that we have met eight of the ten standards set for 2009, it is clear that there are some things that can be improved upon," he said.
"Work is close to completion on the action plan to address the recommendations contained in the report."