The fund was established by the council in 2011 with the intention of providing an annual
scholarship to a group of people making contact with, for cultural or educational purposes, a council sister city or a city with which the district had a formal Friendship Agreement.
It distributed $1000 annually.
One scholarship was awarded in 2013 to Rotorua Intermediate for travel to China. No further applications have been received.
While committee members backed the proposal, there was some concern around scrapping the fund.
Councillor Charles Sturt said he did not want to "throw the baby out with the bath water" by missing an opportunity to promote the grant more.
He said the council needed to be transparent about what grants were available, so people knew what they could apply for.
Chadwick said she did not believe the grant was "very valuable", and the money could be "better dispersed".
"I don't think it's being used."
The full council will meet on February 28.