The Auditor-General has found no evidence of corruption in the handling of an immigration case by the Labour MP, Shane Jones.
Mr Shearer re-instated Shane Jones to Labour's front bench on Tuesday.
An investigation has been held into a decision in 2008 by the then-minister to override advice from officials, and grant citizenship to a Chinese businessman.
In May last year, the Labour leader, David Shearer, stood Mr Jones down from his shadow portfolios and asked the Auditor-General to look into the matter.
The Auditor-General's report has found no evidence of any improper motive, collusion or political interference in the decision to authorise citizenship for Yan Yong Ming, also known as Bill Liu.
Mr Jones says he feels let down by two officials.
He says they told him if Mr Liu went back to China he would be executed and his organs harvested.
Mr Jones says he believed them and granted citizenship.
But the report criticises most of those involved in different aspects of the decision-making process.
Mr Jones says he accepts criticism in the report that he could have handled the matter better.
Mr Shearer says he is happy to have Mr Jones back on the front bench, but notes that while the report cleared Mr Jones of wrongdoing it did criticise the way he handled the case.
Internal Affairs Minister Chris Tremain says the system for handling citizenship applications has improved since Mr Jones was investigated.
And Mr Tremain says that though the support he receives from officials has improved, the Department of Internal Affairs may make further changes.
The department is still considering the Auditor-General's report.