An investigation by the NRL's Integrity Unit has made preliminary findings that since at least 2013 the Parramatta Rugby League Club has been operating a system designed to enable it to exceed the salary cap without detection and give its team an unfair advantage.

The preliminary findings from the investigation include that a series of payments were either hidden from the NRL or misrepresented as suitable for exclusion from the salary cap and that these actions were taken with the knowledge and approval of various club Directors and senior executives.

As a result of these preliminary findings the NRL has today issued the Parramatta club with a breach notice proposing that:

- The club will be fined the maximum penalty of $1 million (with $250,000 suspended if the club accelerates the governance reforms recommended by PWC within a specified time frame)

- The Parramatta Eels will be docked all competition points accumulated so far this season while their team was in breach of the salary cap. The club will be able to begin accruing points as soon as it makes the necessary changes to comply with the 2016 cap.

- The club will be stripped of its Auckland Nines competition title won earlier this year

The NRL has also issued notices to three members of the Club's Board and two members of the Executive requiring them to show cause why their registrations should not be cancelled. They are Chairman Steve Sharp, Deputy Chairman Tom Issa, Director Peter Serrao, CEO John Boulous and Football Manager Daniel Anderson.

The NRL stresses that these are preliminary findings and the club and officials will be given a reasonable time to respond to the proposed penalties.

The NRL will only make a final determination on whether the preliminary findings are justified and the proposed penalties once it has considered the responses of the club and the officials.

CEO Todd Greenberg said if the preliminary findings prove to be justified then serious sanctions will be required given the conduct and the club’s history of salary cap contraventions.

"As the governing body, we have a responsibility to act in the interests of the game for the long term," Mr Greenberg said.

"At times, it gives us no pleasure to have to do so and this is one of those. But we have to take a stand on behalf of the fans, the club and the game.

Mr Greenberg said the club had been fined for breaches of the salary cap rules in five of the last six years and now it had been exposed for operating a system designed to cheat the cap.

"We will need to take a stand on behalf of the fans, the club and the game," Mr Greenberg said.

"This would be a tough outcome for many people, particularly the players and fans, but we believe it would be the start of a process to make the Parramatta club the powerhouse it should be.

"Unfortunately, we may have to go through this pain for the long term health of the club and the game."

In broad terms, the Integrity Unit investigation has made preliminary findings that the Parramatta club breached the salary cap rules and code of conduct by:

- Paying players undisclosed remuneration from its own resources

- Procuring third party agreements for players in breach of the salary cap rules

- Conspiring with club suppliers to inflate or issue fictitious invoices to raise cash that was then relayed to players

Head of Integrity, Nick Weeks said the club and its registered officials had been given numerous opportunities to meet their obligations to come forward with details of any breaches but had not done so.

This was despite the fact the club appears to have been aware of some of the matters which have been reported to the NRL.

Mr Weeks said the NRL's Salary Cap Auditors estimated that the Parramatta Eels are currently around $570,000 over the salary cap.

Mr Weeks said the investigation was one of the most comprehensive ever conducted by the Integrity Unit.

More than 750,000 documents had been obtained and interviews had been conducted with Board members, football staff, club officials, former officials and other parties.