Johannesburg - Frikkie du Preez and Christoff Becker, two of the so-called Waterkloof Four, are working in the bakery of the Kgosi-Mampuru prison in Pretoria and being held in a communal cell, Rapport reported on Sunday.
Correctional Services spokesman Manelisi Wolela told the newspaper that it was too early to say how the pair's rehabilitation was progressing.
Rapport said its investigations discovered that Becker was now having to queue to use a payphone - as is the normal prison rule.
Becker and du Preez had their parole revoked at the end of last month after a video emerged that showed the two having a party in jail. The footage showed Du Preez and Becker drinking alcohol and using a cellphone.
Wolela told Rapport that four prison guards would be attending disciplinary hearings within a month for their part in the incident.
He said that recent raids in the cells at the prison had led to the seizure of 86 mobile phones, a computer and harddrive.
Bekker, Du Preez, Gert van Schalkwyk, and Reinach Tiedt were released at the beginning of February after being jailed for beating a homeless man to death in Pretoria in 2001. - Sapa