IAAF member David Okeyo has been referred to the organisation's ethics commission after being investigated by police in his native Kenya.
Okeyo, vice-president of Athletics Kenya, is alleged to have siphoned off funds from a sponsorship deal between the national association and American sportswear firm Nike.
He denies any wrongdoing and said the contract was "executed with integrity".
Okeyo added there was no "embezzlement" and funds were "fully accounted for".
In a statement on Monday, he continued: "I await the investigations that may be undertaken and respond to all issues that may be raised by IAAF in the appropriate forum."
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The news adds to problems for athletics' world governing body, after a week of doping and bribery scandals.
The IAAF provisionally suspended Russia from athletics on Friday after an independent World Anti-Doping Agency report alleged the country had been involved in state-sponsored doping.
Former IAAF president Lamine Diack, his son Papa Massata, advisor Habib Cisse and the former anti-doping chief Gabriel Dolle are also being investigated by French police over allegations they were complicit in covering up Russian doping - allegations they deny.
A IAAF statement read: "The IAAF was not aware of the investigation into Mr Okeyo in Kenya and the information has immediately been passed on to the independent IAAF ethics commission."
A spokesman for Nike told the Sunday Times the firm had acted with "integrity" in its dealings with Athletics Kenya and that the understanding of the sponsorship deal was that the funds would be "used to support and service the teams and athletes".
The spokesman added that Nike was co-operating with the local authorities in their investigation.