A "highly manipulative" fraudster at the Ministry of Transport retaliated against whistleblowing colleagues by ensuring they were pushed out of their jobs earlier than planned and missed out on pay rises, a high-level inquiry has found.

Joanne Harrison, a senior manager who is now serving a jail sentence, also saw that one staff member was demoted while on sick leave and that another had their pay docked.

"This was a highly manipulative individual who wreaked havoc in this organisation across a wide range of fronts," State Services Commissioner Peter Hughes said this afternoon.

Four staff members are now in line for compensation. The size of their payouts is confidential, but three of them are expected to receive the equivalent of seven months' wages and additional redress for "hurt and humiliation".

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Hughes also formally apologised to the staffers, who he described as "loyal, salt-of-the-earth" public servants.

"They did the right thing, raised genuine concerns, and through proper and appropriate channels. The fact that they were then disadvantaged by it was wrong and unacceptable."

Harrison was sentenced in February to three years and seven months in jail for defrauding the ministry of $750,000.

An investigation by former Deputy State Services Commissioner Sandy Beatie, released today, found that three staff members were not forced out of their jobs after raising concerns about Harrison's dubious spending, as initially claimed.

However, the investigation found that Harrison was directly linked to the timing of their redundancies and the way they were treated during the restructuring process.

They were stood down just before Christmas, and seven months before a planned restructure. There was "no reason" for making them redundant at this time, Beatie said. To add insult to inquiry, they were forced to train their temporary replacements.

Harrison also directly intervened to prevent a member of the ministry's legal team from getting a pay rise, against the advice of others. The staff member had been pursuing concerns raised about her activities.

Hughes said this interference had "every appearance of being punishment" for raising legitimate concerns.

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The inquiry found two other ministry staff may have been badly treated by Harrison, but this was not related to whistleblowing and fell outside the terms of the investigation.

While most of the blame in the investigation was pinned on Harrison, Hughes conceded that the systems for identifying dubious behaviour or individuals were not up to scratch. He also accepted that the whistleblowers' allegations initially emerged through media coverage, rather than official channels.

The inquiry found that only some of the concerns raised by staffers were "protected disclosures" - meaning that Harrison knew about the questions being asked about her.

As a result, the commission has issued new guidelines for all Government agencies on protecting staff who want to speak out against wrongdoing.

It also urged Government to review legislation which protects whistleblowers, saying it is no longer fit for purpose. State Services Commissioner Paula Bennett said she would consider the recommendation.

Harrison's case and public sector's response to it has reverberated beyond the ministry. A separate inquiry is looking at whether Harrison's former boss, Martin Matthews, now the Auditor-General, is fit to continue in his role.