Michael Wheaton, Goole town council's clerk has been suspended on full pay pending the inquiry, which will decide whether he was overpaid£4,000 in the 1995/96 financial year.
Goole, reports the Yorkshire Post, is little more than a parish council and an authority of its size would normally pay around£23,000 to a town clerk.
Mr Wheaton received a£17,000 pay rise in 1994, and a so far unpublished auditor's report was recently completed. The Yorkshire Post reports that since the auditor stepped in, Mr Wheaton had agreed to cut his wages to around£36,000.
Mr Wheaton told the Post: 'I was naturally shocked when I was told I had been suspended.'