Goodbye and good riddance. The demise of the Labour Department's Community Employment Group should not be cause for shedding a single tear. Unless, of course, you were waiting for a grant to finance an overseas trip to "study" hip hop.

Social Development and Employment Minister Steve Maharey has labelled the group's grant processes as "sloppy". Others would use stronger language, and "outrageous" would not be too far short of the mark. When file notes include comments like "There'll be heaps of jobs", one wonders whether any standards at all were being enforced in the organisation.

More importantly, it raises serious questions over the Labour Department's systems of oversight and internal auditing. Surely a grant of $26,000 linked to the phrase "hip hop" would have set off alarm bells if anyone had bothered to carry out the appropriate checking procedures. Instead it took public disclosure and acute political embarrassment before anything was done to stop the employment group's spending spree.

The Government has taken the appropriate steps in disestablishing the group, and it is also appropriate that unit manager Charlie Moore's position be "disestablished", as Labour Department chief executive James Buwalda characterised his demise. But 120 staff who were members of that dysfunctional group remain in the area of social development, and the bulk of unallocated grant money - amounting to perhaps $19 million - will presumably be available for further grants to implausible and outlandish pursuits.

Mr Maharey needs to go further. He needs to assure taxpayers that new rules will govern the allocation of grant money, new checks and balances will be introduced to ensure that money is well-spent, and performance reviews will be implemented to determine whether those 120 staff are fit to remain members of the public service.

The average New Zealander earns a little over $20 an hour. It takes that average New Zealander a long time to earn $26,000, and he or she has a right to feel aggrieved by state spending that is so palpably wrong. He or she therefore has a right to expect that the Ministry of Social Development that will inherit the money and staff by March next year will apply the utmost transparency to its community employment programmes.

Programmes in this area should continue, and there are examples of Community Employment Group programmes that have paid dividends. Not least of its achievements has been the world-renowned Kaikoura Whale Watch tourism venture. But those successes do not compensate for the group's mistakes and shortcomings.

Greens co-leader Rod Donald suggested that the Government should see the bigger picture - and presumably leave the unit in place. It was too late for that. The group has lost all credibility. Its end was a foregone conclusion, and whether that makes it a political casualty as Mr Donald suggests is neither here nor there. Taxpayers no longer trust its operation and that is what counts in the end.

For that reason the Public Service Association should have seen the bigger picture and, instead of slavishly protecting the 120 people employed in the unit, should have accepted that the group's performance fell below acceptable public service standards. The PSA said the workers faced a level of disruption that was not justified. It was justified, and anything less would have been unacceptable.

The Government has indicated its determination to take a harder line in such matters and it appears to have done so. But appearances can be deceiving. The transfer of staff and money means the Government is not yet out of the woods. It is a fair bet that the Ministry of Social Development will come under intense Opposition scrutiny. Woe betide the ministry if the words "hip hop" appear on its files in any context other than the gait of arthritic rabbits.