The Department of Internal Affairs is investigating irregular payments made by a charitable trust headed by Sir Owen Glenn.
The trust is funding a $2 million inquiry into child abuse and domestic violence that is mired in controversy.
Charity services general manager Brendon Ward said the Glenn Family Foundation had been informed of the investigation.
Mr Ward said it's too early to say how long the investigation will take and the Department of Internal Affairs will not provide any more information about it.
Last month, several participants resigned from the inquiry following disclosures Sir Owen had once been charged of assault in Hawaii.
Radio New Zealand was unable to contact the foundation on Sunday morning.