Ministry of Transport fraudster Joanne Harrison, whose offending led to the auditor-general resigning, has been denied parole.
Harrison was jailed for three years and seven months in February after pleading guilty to three charges of dishonestly taking or using a document.
The Serious Fraud Office case found she had defrauded the ministry of $726,000 while employed as a general manager, a role which authorised her to spend public funds.
The Parole Board considered Harrison for parole today but declined to approve it because she continues "to impose an undue risk to the safety of the community".
A full written decision will be available next week.
Harrison will be considered again for parole in March next year.
Over the course of more than three years Harrison made false invoices to three fake entities to misappropriate the funds into her own accounts.
She used the money to pay off credit card debts and pay a mortgage on a house.
Auditor-General Martin Matthews resigned in August over the scandal.
Matthews said in a statement at the time that speculation about how he handled issues around Harrison while he was head of the ministry had made it untenable for him to continue as auditor-general.
Whistleblowers had told Matthews of their concerns about Harrison but he took no action at the time.
"I deeply regret and apologise for the fraud that was committed by an accomplished fraudster," Matthews said in his statement.
"I wish it had never happened but I accept I am accountable for everything done in and by the ministry when I was chief executive, and I am ultimately responsible."
He said he thought he had dealt appropriately with the concerns.
"She gave me explanations that I accepted. It turns out I was wrong, I should have been more suspicious."
A independent review of his suitability for the role was also ordered by Speaker of the House David Carter, which was carried out by Sir Maarten Weavers.