The suspicious shuffling of $8000 to and from a bank account of the Victorian Nationals will not be investigated by the state's anti-corruption watchdog.
The Independent Broad-based Anti-corruption Commission said on Friday the allegations over the Morwell bank account did not fall within its jurisdiction.
"IBAC recently received information from Victoria Police concerning allegations of possible corrupt conduct in relation to theft from National Party accounts in Morwell," the statement read.
"IBAC assessed this information and has determined the allegations do not fall within its jurisdiction, and has advised Victoria Police of this decision."
Police referred the issue to IBAC in early March after being contacted by the Nationals in February, following an audit of the account which discovered the cash movements.
Victoria Police say they will now assess the evidence after the matter was sent back to them.
The activity was uncovered by auditors who were called in to examine the branch's finances between January 2014 and August 2017.
When news of the police referral broke, member for Morwell and former Nationals-turned-independent MP Russell Northe said he would consider his legal options, adding that claims of missing money were incorrect.
Mr Northe stood down from the Nationals in August, admitting to financial and mental health issues.
The Nationals have not accused Mr Northe of being behind the financial anomaly and AAP does not suggest any link between him and the audit findings.
Party leader Peter Walsh loaned Mr Northe $30,000 in 2015, on which the latter man has since made a small repayment.
It's believed Mr Northe could have borrowed more than $685,000 from various sources.
He is yet to decide if he will try to hold on to the seat of Morwell at the November state election.
Mr Northe and the Nationals declined to comment on Friday.
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