Politicians should be banned from signing off on their own expenses, Victoria's Ombudsman has warned in a scathing report.

Ombudsman Deborah Glass called for an overhaul of the state parliament's expenses rules, saying the public should be concerned about the number of allegations of public funds being misused. She said reforming the expenses system would restore public confidence and reduce the risk of further scandals.

Ombudsman Deborah Glass has exonerated the Coalition MPs, but has heavily criticised the parliamentary expenses system. Credit:Simon Schluter

But Treasurer Tim Pallas dismissed that recommendation within hours of the Ombudsman's report being tabled.

“I just wonder exactly how far we go beyond the processes we already put in place – we do have a parliamentary integrity commissioner now,” Mr Pallas said.