Adam Smith College's interim principal, Ian Harrington, has been suspended amid allegations of a misuse of funding from the European Union.
The chair of the board, Irene Morrison, said reports arising from "public interest disclosures" - a process set up to protect whistleblowers - had raised "concerns about the procedures by which the college handled a number of projects supported by European funds".
The board had suspended Mr Harrington to "allow a full disciplinary investigation to be carried out", she said.
Education secretary Michael Russell said: "I am fully aware of these allegations and I take them very seriously. Swift action is being taken to investigate the situation further and I will take a close interest in this."
Initial meetings between government staff and college representatives are understood to have taken place this week, and Martin McGuire, current principal of Cumbernauld College, has been appointed as acting principal.
Mr Harrington's suspension came only months after he took over from former principal, Craig Thompson.