The head of the National Mental Health Commission has stepped aside as the government launches an investigation into allegations of bullying and dysfuction within the agency.

Announcing the review on Tuesday, Health Minister Mark Butler said CEO Christine Morgan had voluntarily stepped aside while Professor Deb Picone investigated whether the allegations, raised in a recent media report, could be substantiated.

It will also conduct a review of culture and capability to ensure the commission is able to provide a safe working environment, and inquire into the commission’s financial sustainability.

“To ensure the government and the public continue to have confidence in the Commission, I have initiated an independent investigation into the allegations and issues that have been raised in the media,” Mr Butler said in a statement.

“Christine Morgan has voluntarily stepped aside as the Commission’s Chief Executive Officer while this investigation occurs.”

The NMHC is tasked with monitoring and reporting on mental health investment and providing the government with policy advice on improving mental health and suicide preventions.

Deputy Chief Medical Officer Dr Ruth Vine will act as CEO during Ms Morgan’s absence.

Professor Picone is a former CEO of the Australian Commission on Safety and Quality in Health Care.

The NMHC is also reportedly the subject of an investigation into a whistleblower report relating to the awarding of a $535,000 graphic design contract.

Comment has been sought from the NMHC.