AUSTIN – The Texas Youth Commission, under fire for spending more than $1 million over three months on an empty juvenile prison, said Friday that it will no longer pay start-up fees to the companies it contracts with.

Internal TYC documents show the agency signed the contract with Youth Services International in July, and agreed to pay up front to cover hiring, renovations and other preliminary costs at the Houston-area facility – which was chosen in an effort to move juvenile offenders closer to home.

News of the early expenditures – which total $1.26 million – prompted outrage on Friday from lawmakers and from Gov. Rick Perry, who removed the scandal-torn TYC from conservatorship earlier this week.

"There's no excuse for it, and someone needs to investigate it," said Sen. John Whitmire, D-Houston, who wrote a letter to the TYC's executive commissioner on Friday calling for her to cancel the contract and report it to the state auditor. "It continues to show me that this is a dysfunctional agency."

The TYC, still reeling from 2007's sexual and physical abuse scandal, continues to take hits. Top TYC officials on Friday vowed that start-up costs would not be included in any future contracts. The contract was not signed under current Executive Commissioner Cherie Townsend, but under the TYC's most recent conservator, Richard Nedelkoff.

"Taxpayers don't pay the start-up costs for any other small-business owner, and they shouldn't be doing it here," Perry spokeswoman Allison Castle said. "We didn't know this was happening, and we've made it very clear that this should not happen in the future."

TYC spokesman Jim Hurley said the first 18 juvenile offenders arrived at the facility, which has the capacity to house 119 youth, on Friday. He said October was always the target date to open the prison. But he said it's unclear how many offenders will eventually end up there, because Ms. Townsend is reviewing the entire contract.

While it's not common, the TYC has in the past included some start-up fees in its contracts.

"This whole thing was about regionalization, about getting kids closer to home," Mr. Hurley said. "That said, providing start-up costs is a practice that will not be a part of our operation anymore."

But Mr. Whitmire, who is a leading proponent of putting juvenile offenders in small, intimate settings close to their homes, said this facility wasn't what he or other lawmakers had in mind. It's 60 miles from Houston. The youths housed there need to be in urban locations with role models who can relate to them, he said.

"We need to make decisions that are outside the current model," he said. "This agency that has been in the public eye for two years now still needs major reforms from top to bottom."