The Punishment Room is in the basement of the Weatherheads', the militant agnostic foster family from "The Poor Kid", house. It is where all their foster children are "punished". It only appeared in "The Poor Kid".
The layout of the room is simple. It is the dark, dank basement of the Weatherhead household lit by a single lightbulb hanging in the middle of the room. There are pipes and a water heater, which is what one would normally find in a basement.
However, the windows are covered, poorly, with newspaper. The walls are leaky red cinder blocks and the ceiling is a simple white wooden frame. There is a tarpulain held down with cinder blocks underneath the place where children are chained, presumably to keep the Dr Pep-er from staining the floor.
Method of Punishment
Children to be "punished" are hung by their hands in the middle of the room from the ceiling. They hang over a large tarp, held down by cinder blocks, as to not make a mess. They are then sprayed with Dr. Pep-er using a power washer which is connected to a barrel of Dr. Pep-er, while the other children must watch. This method of disciplining children is actually torture, a form of waterboarding, and is generally illegal to do in the United States, especially on children.
In the corner opposite of the water heater is a workbench with straps which may have also been used as a form of torture/punishment, and a rack of sticks, possibly used to beat the children.