Police may step in and investigate the parliamentary expenses claimed by former deputy speaker Don Nardella after an audit committee found he stretched the truth to claim $100,000.
The state's shadow attorney general John Pesutto wrote to the police chief commissioner on March 14, asking him to intervene in the expenses scandal rocking the Andrews government.
It was revealed on Tuesday night that police responded to Mr Pesutto the following day, saying the matter will be "allocated to an investigator for assessment".
A parliamentary audit committee received an independent report on Tuesday into the secondary residence allowance claims by former Speaker Telmo Languiller and Mr Nardella.
It was revealed that Mr Nardella paid family $200 a fortnight to say he lived at their seaside property and not his suburban electorate in an "opportunistic" move to claim $100,000 in allowances.
In a letter read out to the parliament, legislative council president and committee chair Bruce Atkinson said Mr Nardella entered into the "informal arrangement" with family after his relationship ended.
The letter also raised questions about whether Mr Nardella even really lived in Ocean Grove at all, as he did not have to pay bills, there was no lease and there are no parliamentary driver records because he did not use the service.
Mr Nardella notified parliamentary clerks he moved to Ocean Grove in April 2014 from Ballarat where he had been living since 2010 - neither of which are in his Melton electorate.
The committee found it could be perceived the $5200-a-year Ocean Grove deal with a relative may have been done so Mr Nardella could get the allowance, worth more than $37,000 a year once he became deputy speaker in December 2014.
"The arrangement may be construed as non-prudent, non-arms length, potentially non-commercial low rent and arguably opportunistic for continued enjoyment of the second residence allowance," Mr Atkinson said.
Mr Nardella told auditors he now no longer lives in Ocean Grove, but a new permanent residence was not read out.
He is also now an independent after quitting the parliamentary Labor party instead of giving in to Premier Daniel Andrews' demand he pay the money back.
Mr Languiller, the member for Tarneit, also claimed the allowance when he moved to Queenscliff, also after a relationship breakdown.
It appeared Mr Languiller did intend to live at the seaside property, but as 2016 wore on, he had to spend more time in Melbourne caring for his children and elderly parents, parliament heard.
However, he did not inform parliamentary clerks of the change until he was caught out in February this year.
He repaid $37,800 this month.
In question time, opposition leader Matthew Guy demanded Mr Andrews refer the MPs to police.
Mr Andrews said the full report needed to be released before any further action.
PricewaterhouseCoopers, which did the report for the audit committee, is also examining all members currently receiving the second residence allowance and the parameters around it.