Auditor-General Martin Matthews is stepping down temporarily, while an independent review takes place into the integrity of his position as watchdog.
Matthews was at the head of the Ministry of Transport when fraudster Joanne Harrison stole $750,000, and failed to act on the multiple complaints made about her conduct.
Harrison was jailed for three years and four months in February.
Three public servants who blew the whistle on her were also let go under his watch.
Speaker of the House David Carter held a meeting this afternoon, where it was voted on unanimously by cross-party MPs that the review happen.
"This process has been initiated by a letter I received last night from the Auditor-General himself asking us to initiate this process, and it's his intention to stand down as the Auditor-General as this process is undertaken."
Senior public servant Sir Maarten Wevers will carry out the review, and is expected to make a decision within two weeks.
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