Whanau Ora Minister Tariana Turia remains confident a grant used by a Dunedin-based gang to buy cannabis was an "isolated incident", despite intercepted phone calls saying it may have been used as a model for gang chapters nationwide.
Last May, a four-month police investigation led to the arrest of 10 male patched or associates members of the Mongrel Mob Notorious gang.
At the centre of that investigation were four Dunedin men, who were charged with dishonestly converting $20,000 of government funding for the "We Against Violence Trust".
Whanau Ora - a Maori Party flagship policy aimed at providing services and opportunities to all families in need across New Zealand - granted money to the trust, which billed itself as promoting non-offensive and non-violent lifestyles.
Mrs Turia said she would be surprised if the money allocated through the Government had been misappropriated because Te Puni Kokiri (TPK) - the Maori Development Ministry - and Whanau Ora had strict eligibility and reporting criteria.
"I can say that this is an isolated case and I am more than satisfied that the appropriate checks and balances are in place," she said yesterday.
TPK planned to refine funding procedures and practices, including internal reviews and an annual audit, she said.
She declined to comment further, or release an investigation file into the case, because the matter was still before the courts.
Four men at the centre of the Dunedin investigation have all appeared before the courts, including Korrey Teeati Cook, who was sentenced to four years' imprisonment in November.
Cook, 36, was the man deemed primarily responsible behind the trust.
The completed police investigation, which included electronic surveillance, found $20,000 of the grants allocated to the trust was transferred into personal bank accounts in order to buy cannabis.
Intercepted calls included Cook saying the Dunedin chapter of the gang was seen as a model by other chapters on how to source Whanau Ora funding.
Other calls revealed Cook was being mentored through the funding process by senior gang members elsewhere in the country, and was also mentoring another local gang on how to obtain funding.
Cook hoped to secure $115,000 in funding in a year, and said the Whanau Ora grants had "worked well for us down here".
Money received by the trust included $41,400 from Te Puni Kokiri in December 2011, with the Government agency also giving a grant of $10,350 in April last year.
The trust also received a $5000 grant from the SDHB in December 2011.
SDHB executive director planning and finance Robert Mackway-Jones said that grant was to promote healthy eating and establish a community based garden.
Organisations who received grants from the SDHB were vetted and the status of the organisation established "in this case, it was a registered charity", he said.
The use of such funds was monitored via reporting, he said.
That grant application included a Mitre 10 Mega shopping list, including wheelbarrows and gardening equipment totalling almost $5000.
The charitable trust has been deregistered by the Charities Commission for failing to file annual returns.