The Charity Commission has launched a statutory inquiry into Oxfam but no details have yet been released about the extent of this.
The hardening stance follows reports in The Times that young sex workers were hired by Oxfam's senior staff in Haiti after the 2010 quake which devastated the island and left up to 300,000 people dead, and that the UK-based charity tried to cover up the scandal at the time.
Oxfam's leaders are accused of trying to cover up the behaviour of some of its senior staff members deployed to Haiti after the devastating 2010 natural disaster.
GettySex abuse within Oxfam has gone unreported fear charity bosses.
Oxfam's Deputy Chief Executive, Penny Lawrence, has resigned over the charity's handling of the situation.
The 48-year-old later tweeted: "All I can tell you about this terrible revelation about Oxfam is that I am devastated".
"The sexual exploitation of vulnerable people, vulnerable children, is never acceptable".
Later, she said that Oxfam had made "a full and unqualified apology to me, and to the people of Britain and Haiti - for the appalling behaviour of some of their staff in Haiti in 2011, and for the wider failings of their organisation's response to it".
Three other staff members, including the country director Roland van Hauwermeiren, resigned before the end of a 2011 investigation into the Haiti incidents.
British Development Secretary Penny Mordaunt has threatened to pull funding from Oxfam Great Britain if it doesn't reveal everything it knows about the Haiti allegations.
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Meanwhile actress Minnie Driver hascut ties with the charity, saying she was "horrified" by the scandal.
Depending on its outcome, the government will decide whether to stop or cut back on money given to Oxfam which in 2016-17 amounted to £31.7 million.
Alasdair Allan has told NGOs that the Scottish Government expects the "highest moral and ethical standards" from organisations meant to offer help to communities "at their time of greatest need".
Oxfam International Executive Director Winnie Byanyima called the entire revelation as "shocking".
"We expect Oxfam to fully clarify the allegations with maximum transparency as a matter of urgency, and we're ready to review and, if needed, cease funding to any partner who is not living up to the required high ethical standards", spokeswoman Maja Kocijancic told reporters.
The recent allegations concerning Haiti and Chad relate to Oxfam GB, one of the 20 affiliate organisations.
But Mr MacLeod believes aid should be redistributed by taking funds away from Oxfam as punishment, and diverting that funding to another charity.
It hurts me very deeply.
Oxfam - which employs around 5,000 staff and has 23,000 more volunteers - recorded 87 incidents a year ago, referring 53 to the police or authorities and dismissing 20 staff or volunteers, according to the paper.