THE Reserve Bank of Australia paid $500,000 to a self-styled ''white witch'' to oversee an ultimately disastrous workplace overhaul at its bank-note printing company.

The revelation of a highly scathing investigative report into Caroline Shahbaz's work at Note Printing Australia - fully owned by the RBA and operating under its charter - adds to concerns about the Reserve's oversight of its currency printing operations.

The Reserve Bank of Australia paid 'white witch' Caroline Shabaz $500,000.

The report, obtained by The Age, was written in 2003, six years before a later employer of Ms Shahbaz, the City of Port Phillip, was criticised over its payment to her of large sums.

NPA and its sister company, Securency, which is half-owned by the Reserve, are under scrutiny over payment of large commissions to foreign middlemen. The middlemen have helped the companies win contracts from overseas governments and banks in corruption-prone countries over the past decade.