Victoria's corruption watchdog has been called in over a potential fraud involving $8000 from a state Nationals branch account.
An unauthorised withdrawal, then repayment, of $8000 from the Morwell account in May 2017 was referred to police in February.
Police on Thursday confirmed the matter had now been sent to the Independent Broad-based Anti-corruption Commission.
The suspicious activity was uncovered by auditors who were called in to examine the account'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, saying the claims of missing money were incorrect.
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Mr Northe, who stood down from the Nationals in August while admitting to financial and mental health issues, was not in parliament on Thursday.
The Nationals have not accused Mr Northe of being behind the financial anomaly.
But party leader Peter Walsh did loan Mr Northe $30,000 in 2015 on which he has 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.
