Thousands of dollars of public money has gone missing - and Labour wants to know why the Transport Minister tried to keep the matter quiet.

The Ministry has confirmed its general manager of organisational development has been stood down over allegations of fraud.

It's alleged Jo Harrison used false contracting arrangements to steal about $750,000 to $1 million.

Ministry management was reportedly alerted to the financial discrepancies earlier this year.


Labour's transport spokesperson Sue Moroney says the public deserves to know about this and wants to know why Transport Minister Simon Bridges thinks it was alright to sweep this under the rug.

Bridges said it's already in the hands of the Serious Fraud Office, and the Minister would have been well briefed before that occurred.

Harrison has now reportedly skipped town - and is possibly in Canada.

The Serious Fraud Office has launched an investigation, it confirmed last night.

New Ministry of Transport head Peter Mersi said the staff member involved was in a position of "high trust" and the organisation had felt incredibly let down and betrayed by her actions.

"I can confirm that, following investigations into allegations of significant breaches of the Code of Conduct by former staff member Joanne Harrison, a complaint has been laid with the Serious Fraud Office," Mersi said.

"In light of what has happened, it is prudent to confirm that our systems, processes and controls are robust. To provide this assurance, a number of reviews are now underway. These focus on internal controls and recruitment processes."

Harrison had worked at the Ministry for several years and had been seen as a leader within the organisation - being appointed the general manager of organisational development for the team.

- Additional reporting: Newstalk ZB