Acting ombudsman Alison Larkins.

Former acting ombudsman Alison Larkins.

The public service watchdog who watered down criticisms of the government's approach to asylum seekers is about to head Australia's refugee program.

Alison Larkins became acting Commonwealth ombudsman following Allan Asher's resignation in October last year.

She later signed off on the agency's annual report for 2010-11, which omitted Mr Asher's concerns about the office's inability to monitor immigration detention effectively.

Her version of the report also removed Mr Asher's warning that the federal bureaucracy might be more corrupt than many believed.

Ms Larkins, who was a senior executive at the Immigration Department before she took leave to work at the ombudsman's office, will return to the department this month to head its refugee, humanitarian and international division.

She said on Tuesday she had appropriately managed her conflict of interest throughout her time as acting ombudsman.

''I sought advice from a range of people with relevant expertise and, taking this advice into account, put in place documented measures to minimise the potential for observers to see any lack of impartiality in the work of the office.''

Ms Larkins also engaged consulting firm Ernst & Young last year to examine her situation, and it said her approach had ''provided effective management of any potential conflict of interest''.

''In broad terms, this meant that while I was acting Ombudsman, I delegated management of immigration portfolio matters, wherever possible,'' she said.

Mr Asher, a vocal critic of immigration detention, resigned in response to growing concerns about his impartiality, after he admitted scripting questions for a Greens senator to ask him at a Senate inquiry.

His version of the annual report, which was never published but was accessed under freedom of information law, said the government failed to adequately fund his work as immigration ombudsman.

As a result, he said in his report he was ''unable to provide overall assurance to the public and the Parliament that fair and accountable administrative action is being taken by responsible Australian government agencies''.

This week, the Ombudsman's office said that because Ms Larkins signed the tabled report, ''it reflected her understanding of the work and circumstances of the office'', not Mr Asher's.

''Ms Larkins did not believe the office had sufficient evidence to support the statements made by Mr Asher in relation to funding,'' it said.

Special Minister of State Gary Gray has denied he intervened to prevent the publication of Mr Asher's report.

Mr Asher alleged this week the minister had interfered with the report, but Mr Gray's office said the claim was ''completely baseless''.

''It would be highly inappropriate for the government to seek to influence the independent office of the Ombudsman,'' the minister's spokesman said.

''At no time did minister Gray or his office seek to alter or delay the ombudsman's annual report. Indeed, the only version provided to the minister's office was [Ms Larkins's] final report, and this was submitted in compliance with statutory requirements.''

Mr Gray's office also said if Mr Asher had evidence of corruption in the public service, it was ''vitally important that he refer it to the appropriate authorities as soon as possible''.