Victorian MP Don Nardella likely claimed a total of $175,000 in taxpayer-funded allowances, including under an "opportunistic" living arrangement at a beachside town outside his electorate, an audit committee has found.

A report on the expenses scandal from the Parliament's audit committee found the Member for Melton claimed the second residence allowance, which is meant for country MPs, from 2010 while living in Ballarat and on the Bellarine Peninsula.

Mr Nardella moved to Ocean Grove in 2014 after a relationship breakdown, where he struck an informal arrangement with family members to use the address for a fortnightly payment of $200.

"The audit committee considered that from a reputation-risk perspective for Parliament, the arrangement may be construed as non-prudent, non-arms length, potentially non-commercial … and arguably opportunistic, designed to ensure continued enjoyment of the second residence allowance," the committee said.

"No formal lease was entered into and no payments for electricity or other utilities were made by the member.

"The location of the home base appeared to have no long-term connection with the member, and it is difficult to argue convincingly that he intended this to be a long-term permanent principle residence.

"A position could be taken that the arrangement in this period with the member's family may have been entered into to ensure that the member would continue to receive the second residence allowance."

Don Nardella quit the parliamentary Labor Party and moved to the cross-bench earlier this month after refusing to pay back the money he claimed for living more than 80 kilometres from Melbourne, outside his western suburbs electorate.

He has denied any wrongdoing.

Languiller 'intended' to live in Queenscliff, committee finds

Former Speaker Telmo Languiller also resigned last month after claiming almost $40,000 for living in the seaside town of Queenscliff while maintaining a second property in Footscray.

The committe found Telmo Languiller had planned to move to Queenscliff but his circumstances changed. ( Parliament of Victoria )

The committee found the Tarneit MP intended to live in Queenscliff but his personal circumstances changed last year, which meant he more often stayed in Melbourne.

"Personal and family circumstances were in a state of significant flux," it said.

"The member [Languiller] had not notified the clerk of the Legislative Assembly when it became apparent that the intention to live in Queenscliff as a principle place of residence was no longer a reality."

Mr Languiller told the clerk he no longer wanted to claim the second residence allowance on February 13 and repaid the $37,800 he claimed on March 2.

Living outside electorate 'doesn't breach rules'

The committee noted that "the issue of the members of parliament claiming the allowances for properties outside the electorate they represent does not constitute a breach of the regulations".

Consultants PricewaterhouseCoopers are still reviewing all MPs' claims for the second residence allowance.

The Andrews Government has pledged to scrap the "honesty system" for politicians' perks by making MPs prove they are eligible for allowances and banning city MPs from claiming the second residence allowance.