The Prime Minister Akilisi Pohiva ordered an investigation into the funds which were meant to go towards the rebuilding of homes on Ha'apai.
The island group was hit hard by Cyclone Ian in 2014, leaving thousands homeless, but the reconstruction effort had been plagued with delays and 75 homes still need to be rebuilt.
The World Bank had been assisting with the rebuild.
The bank's Tatafu Moeaki said it wants to make sure the government investigation was done correctly.
"To take into account matters including legal and financial risks so we are working through the respective authorities of government to ensure that these are taken into account to ensure that a good result is reached," he said.
Photo: Richard Small (Massive damage remains after Cyclone Ian).