The NSW Education Minister Adrian Piccoli has referred the Federation of Parents and Citizens Associations of NSW to the Independent Commission Against Corruption, according to the Sydney Morning Herald.
The paper said it understood the referral was in response to an alleged misuse of funds within the Federation.
However, it is unclear whether ICAC will be able to investigate the body given it may not fit the definition of being a public sector agency.
Mr Piccoli has frozen an annual payment of about $380,000 to the body, according to the paper.
The news comes amid confusion over the running of the Federation. Members of the state council voted to remove President Lyall Wilkinson at a meeting over the weekend that was not recognised by Mr Wilkinson.
"Claims that a P&C Federation state Council meeting was held at Merrylands Bowling Club on the 9 and 10 November 2013 are false,'' said a statement issued by Mr Wilkinson.
“As President, I do not and cannot condone such actions that deliberately seek to mislead the public and the Organisation’s members,'' he said in the statement.
"The fact that people would continue to act against the rules and best interest of the Organisation in such an unscrupulous manner is astounding and just demonstrates some of the issues faced by P&C Federation.”