The Serious Fraud Office received a fraud complaint relating to Labour's rental arrangements in the Hutt South electorate but declined to investigate it.
Labour's Hutt South branch had been pocketing thousands of dollars of taxpayers' money each year through a controversial subletting arrangement.
Labour paid only $1500 in rent for its office annually to the building’s owner, but a subletting arrangement meant their MPs Trevor Mallard and Ginny Andersen would charge the Parliamentary Service $6000 in rent.
The MPs kept the $4500 difference for their local Labour branch.
In March, Andersen told 1 NEWS she had terminated the rental arrangement after Stuff made details of the deal public late last year.
She had inherited the arrangement from Mallard but said she hadn't fully understood it.
Andersen said once the details were made public, she comprehended what was happening and was uncomfortable with the lack of transparency for taxpayers so put an end to it.
The Serious Fraud Office has now confirmed it received an anonymous fraud complaint regarding the rental arrangement in February 2020.
"The SFO evaluated the complaint and determined the matters alleged were not within the agency’s remit," a spokesperson said.
When asked why the complaint was outside its remit a spokesperson pointed 1 NEWS to page four of its 2020 annual report.
"We focus on a relatively small number of cases that have a disproportionally high impact on the economy and the financial wellbeing of New Zealanders," part of page four reads.
Meanwhile, the Office of the Auditor-General says it still hasn't decided whether to launch a full investigation into the subletting arrangement.
It comes after the National MP Chris Bishop, who lost the Hutt South seat to Labour's Andersen at the 2020 election, asked them to look into the matter in February this year.
A spokesperson said the Auditor-General is still carrying out preliminary work on the matter.
Part of the public watchdog's mandate is to ensure there's transparency regarding the use of taxpayers' money.
Labour's general secretary Rob Salmond told 1 NEWS the party isn't even sure how much taxpayer money their two MPs have obtained for Labour's Hutt South wing.
He said Labour began renting the office from the Professional Firefighters Union in 1993.
Asked if it would be fair to say the sum obtained could be in the vicinity of $120,000-130,000 – if they'd been obtaining $4500 a year for around 27 years – Salmond said he wouldn't want to speculate and that Labour was struggling to obtain records from their own party.
"You’ll appreciate, surfacing those figures from one of our local organisations going back 27 years isn’t straightforward," he told 1 NEWS.
Trevor Mallard has refused to be interviewed on the matter.
In June 2020 an anonymous complaint was also laid with the Auditor General alleging a false tenancy was in place in the Hutt South Petone office and that the "false tenancy was used to secure Parliamentary Service rent money which then funded campaigning".
Parliamentary Services told the Auditor-General that in its view the $6000 rent was "both cost-effective and value for money" and an "allowable expense".
The Auditor-General was not informed Labour MPs were inflating the true cost of their rent to taxpayers.
The Auditor-General says because the Parliamentary Service was "satisfied the rent arrangement was an allowable expense, we decided not to take any further action".
Prime Minister Jacinda Ardern has said she's not the right person to judge whether her Labour MPs have taken advantage of taxpayers.