The Public Accounts Committee has heard gardaí are investigating alleged inappropriate claims made by two employees of the Department of Social Protection.
Secretary general of the department Niamh O'Donoghue told committee members that the claims amounted to over €1.2m.
The revelation came to light during an exchange between Ms O'Donoghue and Fine Gael's Kieran O'Donnell.
They were discussing the misappropriation of department monies by two employees.
Ms O'Donoghue told him that the claims were made by two individuals working in the community welfare area over a six-year period.
One of the individuals had claimed more than €1m during that time.
Ms O'Donoghue told him that gardaí were informed last December and they are investigating the claims.
She said that the alleged misappropriation had come to light as a result of new management controls.
Ms O'Donoghue pointed out that the community welfare area had only come under her department's remit in 2012.
The two individuals are currently suspended with pay.
Mr O'Donnell said it was incredible that one individual could claim more than €1m of taxpayers' money without it being detected.
Ms O'Donoghue told him that it was an absolutely atypical situation that had caused great shock in the department when it was uncovered.