Disgraced former ethics watchdog Christiane Ouimet has finally appeared on Parliament Hill, telling a Commons committee that the auditor general's report which led to her resignation was both unfair and inaccurate.

Ouimet testified under oath on Thursday afternoon, accompanied by her lawyer, months after the committee began trying to get her to testify.

"I'm here to point out that there are serious flaws and erroneous facts that have attacked my reputation," she said in her first public comments since the scandal over her departure began.

Last December, Auditor General Sheila Fraser delivered a report that said Ouimet failed to protect whistleblower and bullied her staff.

It also found that Ouimet had investigated only seven out of 228 allegations of wrongdoing from bureaucrats, and did not find a single case of wrongdoing.

She resigned before the report was released, signing up for a severance package on Oct. 7 that was worth more than $500,000. The agreement included a confidentiality clause, which Opposition MPs charge is tantamount to hush money.

"I lost seven years income, seven years pension," Ouimet told MPs on the committee. "I lost my reputation. I lost my health."

She said she received death threats because of Fraser's investigation and was presented with what she described as a "non-negotiable" offer from the government to quit her post.

Ouimet's testimony came hours after Prime Minister Stephen Harper defended her severance package.

"It is not a good situation but our power to act was limited" because the federal government did not have the authority to fire her, Harper said Thursday in Toronto.

He said the government received legal advice saying the best way to speed Ouimet's departure was to give her the hefty payout.

"The government accepted advice from its lawyers (on) what was the best, the cheapest and the fastest way to make a change so that office could get on with the job it's supposed to be doing," Harper said.

But Parliament could have fired Ouimet with cause, and Harper did not explain why he never sought support from opposition parties to do so.

Recent documents obtained by The Canadian Press found Ouimet sought a meeting with Treasury Board President Stockwell Day and met with his predecessor, Vic Toews.

Opposition critics have accused her of having too cozy a relationship with the government.

Ouimet was appointed to the position in 2007, when the job was created.

With files from The Canadian Press