The federal government has ordered a forensic audit of the Coonamble Aboriginal Health Service (CAHS) after the Sydney Morning Herald (SMH) revealed concerns in May over use of charity funds.

The audit will cover from the 2022-23 financial year to the present, while a grant administrator will also oversee CAHS' management of grant funding from the Commonwealth Department of Health, Disability and Ageing.

A statement from CAHS' board released on Thursday 4 September said they will cooperate with the probe.

"We are confident that CAHS has at all times operated in alignment with the requirements of Commonwealth and State grant funding and we reaffirm our commitment to strong governance, operational integrity and the communities we serve," the statement said.

"We always welcome the opportunity to obtain external independent insights and commit to acting on any recommendations arising from lessons learned as part of the process.

"We see this process as an opportunity to directly inform the Commonwealth of significant issues facing rural health care such as a shortage of available qualified medical staff which is having an impact on our operations.

"While this process is ongoing, the Board will not be making any further comment on this matter."

Dubbo Regional Aboriginal Health Service. Former staff raised concerns to the SMH about board travel expenses. 

The board said that the audit will not disrupt services.

The SHM reported that CAHS CEO Phil Naden and senior board members used the registered charity's funds for trips to India, Canada, New Zealand and the NRL opening round in Las Vegas.

It raised concerns from former staff at their Dubbo clinic, who saw the expenses as non-justified and said they could have gone towards clinical services.

CAHS is a non-profit entity and receives over two thirds (at least $10 million) of it's funding from the federal and state governments.

As well as medical and dental clinics in Coonamble, where it also operates a funeral service and a gym, the service has a health clinic in Gilgandra.

The article does not claim government funds were used for travel expenses.

"This decision was made to ensure that Commonwealth grant funding has been used in an appropriate manner and for the purposes for which it was provided," a spokesperson for the Department of Health, Disability and Ageing said.

"The grant administrator will work closely with the Board and the CEO through this process."