Seven people and two organisations are being prosecuted for misusing grants money from pokie machines.

The accused faced a total of 26 charges after what the Department of Internal Affairs called a two-year investigation.

The defendants appeared in Manukau District Court today and were all given name suppression, the department said.

"...The misappropriation of funds is a serious offence and in effect is a crime against the community because grant funding is taken away from its intended community purpose," said Maarten Quivooy, general manager for regulatory services.

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"The intent of the Gambling Act is to make sure that the money from gambling benefits the community. It is important that the money that is distributed in the community as grants is used for the purpose for which the grant was made."

Internal Affairs said the next hearing was scheduled for February 17.