Pressure is mounting against Auditor-General Martin Matthews, as the State Services commission considers an investigation into massive fraud carried out at the Ministry of Transport, under his watch.

Matthews was ministry chief executive at the time fraudster Joanne Harrison was swindling taxpayers out of nearly $750,000 through dodgy invoices and a series of other employment scams.

Secretary of Transport Peter Mersi has set up an independent process to look into the incident amid growing calls for a full independent inquiry into its handling, including allegations by two whistleblowers that they lost their jobs after questioning some of the invoices Harrison was signing off.

RNZ Two former Transport Ministry workers have spoken out for the first time about how they were forced out of their jobs after raising the alarm about the fraudster Joanne Harrison.

State Services Commissioner Peter Hughes has confirmed he had received a request to investigate, which he was considering.

READ MORE:

* Ministry of Transport staffer stood down, accused of stealing $750,000

* Opinion: Stolen dollars easier to count than victims

* 'We all wished it hadn't happened,' says former boss of fraudster Harrison

* MoT fraudster Joanne Harrison jailed

* Opinion: Transport Ministry must come clean on Harrison swindling taxpayers

Matthews stood down from his transport role in June, one month before the fraud was made public. He was appointed by Parliament to Auditor General in November, and is now charged with ensuring public departments get best use out taxpayer dollars.

CHRIS SKELTON/STUFF Former Transport Ministry manager Joanne Harrison, who stole more than $720,000 of taxpayers' money, tried arranging to sneak back into the ministry, and getting a contractor to do her dirty work.

Given his new role, he would no longer fall under the jurisdiction of a ministry inquiry into the handling of the fraud, which has sparked calls for a larger inquiry.

Prime Minister Bill English was reluctant to comment on whether he had confidence in Matthews.

"That's a matter for the Parliament. If I made a comment on the Auditor General, who's appointed by Parliament precisely because they scrutinise Government, that would be attacking the independence of the Auditor General and of Parliament."

But the public service had to ensure it was seen to be operating with the "highest level of integrity".

"I think it's really important that the public have confidence in the capacity of the public service to pick up bad activity, that's wrong or illegal, or even inappropriate.

"The State Services Commissioner has the obligation of making sure that is the case. Government is somewhat at arm's length from those processes - they're are purposely, by legislation, carried out by the public service, not by the politicians."

Hughes said he took the matter seriously.

"I can confirm that last week I received an email from former staff members of the Ministry of Transport raising concerns with this process. I am treating this as a request for SSC to investigate the concerns they have raised.

"I take their concerns seriously and I am currently considering this request."

Public Servants who had concerns about any issues, needed to raise them "so they can be properly considered and addressed".

"Last year I directed every Public Service Chief Executive to review their Protected Disclosure Act policies and processes and internal processes for escalation of issues or concerns," he said.

"I want to ensure every agency has clear, easily accessible systems for Public Servants to raise concerns, and that they are making sure their staff know how to access and use them if they have concerns."

Calls for an independent inquiry have found the backing of the Public Service Association (PSA).

National secretary Glenn Barclay said the Harrison case pointed to wider problems in systems to handle employees raising concerns about management.

"It is important that public sector agencies have a culture of openness that enables people to speak up when they see wrongdoing.

"It is important to hold an inquiry to get to the truth behind these allegations as there is little doubt this will have a chilling effect on whistleblowing across the public service.

Meanwhile, two former Ministry of Transport Ministry employees who raised the alarm about Harrison, have spoken out about how they quickly found themselves out of work.

The two whistleblowers informed senior managers about fake invoices Harrison was using. They were then targeted in a restructure Harrison helped oversee, Radio NZ has reported.

Harrison was first questioned about dubious contracts at least as far back as May 2014, but batted away queries on a $123,000 payment, claiming a "genuine misunderstanding" about contracting policy.

Two of those who lost their jobs spoke to Radio NZ on the condition of anonymity. One said they were in no doubt the concerns raised led to their being axed.

One of those staff members said they first raised concerns in 2015, over an invoice for Mazarine, an organisation they could not find anything about.

"And I remember at the time I took the invoice to a woman who worked closely with Joanne Harrison, she was like Jo's right-hand man ... and I said to her 'do you know what these people did for the ministry'? And she said 'no I don't'!

"I also raised questions about it in a team meeting about this invoice at the time, I said 'it's a very unprofessional invoice' and as it turned out this is one of the ones she used to embezzle a lot of money from the ministry," they told Radio NZ.

Harrison was sentenced to three years and seven months in prison in February for stealing $723,000.

- Audio courtesy of Radio NZ.