The charges were made by two members of parliament during an eight-hour session in which Muhammad Daif Allah Sharar, who is also state minister for cabinet and parliamentary affairs, was grilled. He has served in the cabinet for the past eight years.
Parliament unanimously decided to order the audit bureau - the state accounting watchdog - to submit a report on the allegations to the chamber within three months. Ministers present in the house voted for the decision.
Liberal MPs Ahmad al-Mulaifi and Ali al-Rashid claimed that the minister had either taken part in alleged graft or failed to stop corruption in departments that fall under his authority.
These include the Kuwait municipality, the Public Authority for Agriculture and the Civil Service Commission.
The members of parliament claimed that corruption, wrongdoing and financial irregularities in the departments have cost the state hundreds of millions of dollars.
Sharar categorically denied the charges and challenged the two MPs to prove their allegations.
During the heated debate, MPs strongly criticised the government for failing to stamp out corruption, which they described as a monster and as increasing in the oil-rich emirate.
A survey by Berlin-based graft watchdog Transparency International released in October reported a rise in perceived corruption in the past year in Kuwait, which slipped nine places from 35th to 44th position among 146 nations.
Kuwaiti Prime Minister Shaikh Sabah al-Ahmad al-Sabah acknowledged in October that corruption and red tape by state bureaucracy were obstructing economic growth.
Sharar comfortably survived a no-confidence vote following similar questioning in March 2003.