The annual cost of alcohol-related harm in the UK is estimated to be between £17.7 and £25.1 billion with healthcare costs alone reaching £2.7 billion and the costs of alcohol-fuelled crime and disorder accounting for £7.3 billion each year. The aim of the study was to examine the prevalence of alcohol use disorders (AUD) in prison and probation settings in the North East of England, and to compare the ability of the Alcohol Use Disorders Identification Test (AUDIT) and Offender Assessment System (OASys) at identifying alcohol-related need in probation clients. A quantitative prevalence study was carried out using anonymous questionnaires. With participants from four prisons and three probation offices in the North East who voluntarily completed the AUDIT questionnaire during a 1-month period in 2006. Response outcomes on AUDIT were compared with OASys scores which identify alcohol-related need in probation. At the time of the study OASys scores were not available for offenders in prison. Seven hundred and fifteen questionnaires were completed. Sixty-three per cent of men and 57% of women were identified as having an AUD with over a third of all individuals scoring within the possibly dependant range (20+ on AUDIT). Around 40% of probation cases who were classified as either hazardous, harmful or possibly dependant drinkers on AUDIT were not identified by OASys. The results indicate that the prevalence of AUD in offenders is much higher than in the general population. In addition, current methods of identifying offenders with alcohol-related need in probation are flawed and as many such people go undetected. Alcohol assessment procedures need to be improved in criminal justice setting order to correctly identify people with AUD.