Australia's official aid program says it is closely monitoring the performance of one of its contractors that has been accused of fraud.

AusAID says it has recently been made aware of fraud allegations against International Relief and Development's (IRD) operations in Afghanistan last year.

The allegation relates to an activity implemented under an agreement with USAID, the US government's official overseas aid agency, not AusAID.

"AusAID has zero tolerance for fraud," the agency said in a statement on Thursday.

"We sought urgent advice from IRD on the substance of these allegations and why AusAID was not informed."

AusAID contracts stipulate AusAID must be informed immediately should the contractor be under investigation, formal or informal, for fraud.

AusAID has sought assurances from IRD that they have strong controls in place to ensure contract arrangements are followed in the future.

"There is no indication of fraud by IRD in the programs it is delivering for AusAID in Afghanistan," AusAID said.

"AusAID will continue to closely monitor IRD's performance in delivering these programs. AusAID is continuing to review this issue and will take whatever further action may be required."