A diligent departmental officer noticed a discrepancy in payments and raised the alarm on Thursday.
Police have seized Mr Barlow's assets and Ms Bligh says it could be the most serious case of fraud in the history of Queensland public administration.
She was told about the alleged fraud on Thursday night. She held back on announcing details until police had conducted a preliminary investigation and applied to freeze Mr Morehu-Barlow's assets.
"I am furious. I cannot say how angry I am about this,'' Ms Bligh told reporters.
"The person concerned has very substantial assets, including a very high-value apartment, luxury vehicles and a very substantial amount of cash in bank accounts.
"A fraud of this nature may well be the most serious breach of public administration in the living memory of our state.''
Deputy Commissioner Ross Barnett said Mr Morehu-Barlow has several aliases, businesses and assets worth about $12 million.
Mr Barnett would not rule out that other people might be involved.
"We started looking for Mr Barlow late last night and we have visited a number of addresses and obviously we've been unable to find him,'' Mr Barnett said on Friday.
"We've taken action today to preserve the estate.''
Health Minister Geoff Wilson said Mr Morehu-Barlow had allegedly succeeded in defrauding the government by forging a signature.
He said Mr Morehu-Barlow had been investigated for fraud a year ago, but the allegation had not been substantiated.
"The preliminary information is that a significant part of the fraud has been achieved by the forgery of a senior officer's signature,'' Mr Wilson said.
"About 12 months ago there was a complaint made ...that he was behaving in a way that he may be accessing public funds.
"That was investigated and found not to be substantiated.''
Ms Bligh said Mr Morehu-Barlow worked in a department that allocated grant funds to non-government health agencies.
"The person involved in this fraud has gone to some intricate lengths in subterfuge to cover their tracks,'' she said.
Ms Bligh said investigators would conduct an audit to determine how the money had been siphoned off and if security checks needed to be overhauled.
Ms Bligh said it was possible the auditor-general had missed the fraud over the last two audits.
"That's why we have brought independent, external auditors to do a forensic analysis of the finances of that division in that department,'' Ms Bligh said.
Police described Mr Morehu-Barlow as Pacific Islander in appearance, about 180cm tall, with short black hair and a solid build.
He has a large tattoo of angel wings on his back.
- AAP / Newstalk ZB
