A woman at the centre of a fraud inquiry at the Ministry of Transport left the country months ago, the Labour Party believes.
The Serious Fraud Office (SFO) is investigating Joanne Harrison, who was the ministry's organisational development general manager.
Ms Harrison was stood down in April when the fraud came to light, and is no longer an employee.
Transport Ministry chief executive Peter Mersi said she was a senior staff member in a position of high trust, and staff felt betrayed.
He said several reviews into the ministry's systems were under way and his focus was on ensuring any misappropriated money was recovered.
Labour transport spokeswoman Sue Moroney said the fraud could total as much as $1 million but was certainly several hundred thousand.
"I've seen reports that the ministry learned of this in April. They say they stood Joanne Harrison down, but I understand she left the country as soon as questions started being asked about some of the results from the audit."
A former colleague has described Ms Harrison as manipulative and divisive. Reports suggest she could now be in Canada.
Ms Moroney said Transport Minister Simon Bridges should speak up.
"The minister appears to have had this information about serious fraud happening within his ministry since April, and he's not come clean with the public about it."
The office of Mr Bridges was not commenting.
There are now questions about how the case was handled by the ministry's former chief executive Martin Matthews who left last month after eight years in the job.
He refused to comment when contacted by RNZ News.