Whitireia Polytechnic is withholding $70,000 worth of union levies while its Students' Association accounts are examined by police.
Police are investigating alleged misappropriation of funds at the association.
Whitireia Polytechnic is a separate entity to the Students' Association but chief executive Don Campbell says it will hold onto the levies it collected this year on behalf of the union.
Usually, the polytechnic collects the $135 levy, along with students fees, and then passes the levy component onto the union.
However, Mr Campbell says the institution is taking a prudent approach while the investigation is under way.