Finance Minister Bill English will not be formally investigated over the housing allowance he received and has since paid back.
Mr English was yesterday cleared of wrongdoing over his housing allowance claims, after he was criticised for claiming almost $1000 a week in expenses - including $700 a week in rent, to live in his own house, leased to the Government as an official residence.
Argument focused on whether Mr English was a Wellington-based minister.
He claimed his primary residence was Dipton, but his family lives with him in Karori, Wellington.
Following public debate, Prime Minister John Key announced changes to tighten ministerial allowances.
The Auditor-general's report released yesterday said Mr English had declared the correct information relating to his Wellington accommodation costs and primary place of residence.
His accommodation costs were approved by Parliamentary Services and "successive Speakers".
The report raised concerns about the current system for deciding a primary place of residence which looked at whether an MP owned a house outside Wellington, other than a holiday home, rather than focusing on where they lived in an everyday sense.
It recommended support for costs of living in Wellington should be clear and transparent as well as controlled by checks and limits.
Mr English signed a declaration that he had no pecuniary interest in the family trust that owned the Wellington house in which he and his family lived.
The Auditor-general's office said "greater consideration needed to be given to whether and how personal interests were relevant and what protections were needed to manage the risks they create".
Mr English said the report showed he had been open about his family's situation and followed the rules.
It was a challenge to be a senior politician and a father and he stood by keeping his family together, he said.
"It says that I meet the test that was provided to me. The Auditor-general believes there should be a wider test; if there had been then I certainly would have complied with that," Mr English told reporters.
"All the money's been repaid. I've removed any doubt about my entitlements."
Speaker Dr Lockwood Smith said he would use the Auditor-general's findings to complete work by Parliamentary Services to make changes in the system.
"It is important that we have a system that is fair for members and recognises that many members maintain two homes.
"At the same time, the system must also be clear, transparent and represent value for money for taxpayers," Dr Smith said.
