Auditor-General Lyn Provost says she will not investigate alleged abuse of a Parliamentary travel perk by former minister Pansy Wong.

It will do more "public good" for Government to adopt the recommendations of a report tabled today on improving serious flaws in the entire ministerial spending system, she says.

Ms Wong resigned from Parliament today, effective from January 17, saying she was concerned allegations of misuse of taxpayer-funded travel would hurt the National Government.

Ms Provost said the decision not to investigate Wong was made before today's announcement.

"Irrespective of Mrs Wong's decision to resign from Parliament, I had already decided that further investigation by this Office is not warranted. My decision took into account the speaker's inquiry and my view of what best serves the public interest at this point," Mrs Provost said

"It is very clear to me that a flawed system and weaknesses in administration are not helping our MPs and Ministers to spend and account for public money in a way that is open and transparent to everyone."

Wong's resignation a 'cover-up'

Earlier today, Labour leader Phil Goff said Ms Wong's resignation was a "cynical political attempt at a cover up".

He had been calling for the Auditor-General to investigate Mrs Wong's use of the perk after a Parliamentary Services inquiry cleared her of any serious misuse.

MPs' expenses system puzzling - Auditor-General

The Auditor-General's report tabled in Parliament this afternoon revealed significant flaws exist at every level of the Government ministerial expenses system.

It showed a system plagued by poor documentation of transactions, weak internal controls and a lack of understanding from those charged with administering it.

Though there was not systematic abuse of the spending rules, there were occasional examples of spending deemed outside the rules, it shows.

The report called for legal reform of the system to make it easier to manage.

The "myriad rules, entitlements, and procedures" for ministerial spending are puzzling and need to be clarified, it says.

"The weaknesses we have identified in the financial controls expose Ministerial Services and Ministers to greater risk of inappropriate spending and criticism.

"More attention needs to be given to the basics of financial accountability."

The report recommends the responsibility of Department of Internal Affairs for overseeing the system be put "beyond doubt".

Ministers have sometimes challenged the judgement of DOIA officials and asked whether they should be questioning their spending, it says.

"This is an important first step, if major improvements are to be achieved."

It also calls for the system to have a clear legal basis, better administration and improved financial recording.

"The end result should be a stronger system that better supports and protects Ministers, by enabling officials to catch and correct mistakes early and as a matter of routine."

Prime Minister John Key says he accepts many of the report's findings about what needs to change in the ministerial expenses system.

A review of the legal framework underpinning the system will be conducted after new legislation is introduced in 2011, he says.

He is also asking the Chief Executive of the DOIA to report back to him by February on how to improve administration of ministerial services.