Due diligence was carried out on Sam Allardyce before his appointment as England manager, says Football Association chairman Greg Clarke.
Allardyce, 61, left his role in September after 67 days in charge following a newspaper investigation claiming he offered advice on how to “get around” rules on player transfers.
Asked by MPs whether the FA looked into previous allegations against Allardyce made by a 2006 BBC Panorama programme, Clarke said no significant issues were found.
In response to Panorama, then Bolton manager Allardyce denied claims he had received illegal payments from agents.
An inquiry by Lord Stevens later suggested that he may have had a conflict of interest with his agent son Craig Allardyce, but it found no evidence of irregular payments.
The chair of Commons Select Committee, Damian Collins MP, told Clarke on Monday it was an “institutional failure” if the FA did not fully examine the former England manager’s background.
Allardyce’s stint as England manager lasted only one match following his appointment in July.
The former West Ham, Newcastle, Notts County and Blackburn boss was filmed in July 2016 telling undercover reporters it was “not a problem” to bypass rules on third-party player ownership and claimed he knew of agents who were “doing it all the time”.
The Telegraph investigation also claimed that a £400,000 deal was struck for Allardyce to represent the Far East firm the reporters claimed to work for, and to be a speaker at events, although Allardyce said he would have to “run that by” the FA first.
Allardyce said he “made a significant error of judgement”, but that “entrapment had won” following his departure from the England job.
He added: “Although it was made clear during the recorded conversations that any proposed arrangements would need the FA’s full approval, I recognise I made some comments which have caused embarrassment.”
Clarke said the FA is still waiting for the Telegraph and police to release the full information from their investigation.
Answering questions from MPs at a Commons select committee into football governance, Clarke said Allardyce was given a pay-off when he left England, but refused to disclose the sum.
On Friday, FA vice-chairman David Gill told BBC Sport that Allardyce’s exit was a “complete disappointment” and that “no-one saw it coming”.