An anti-drug group run by the Church of Scientology will be investigated to ensure money granted to it by the government was not misspent.
Revelations that the drug-free ambassadors were given taxpayer cash to publish drug awareness pamphlets based on Scientology teachings, have also sparked a review by the Department of Internal Affairs.
The group, and its sister organisation Drug Free Aotearoa, received around $10,000 from various Community Organisation Grants Schemes committees during 2011.
Drug education experts say the information in the pamphlets funded by the grants is not based on science, and should not be given government money or disseminated by schools.
Scientology teachings are widely regarded as controversial. Founder L Ron Hubbard did not believe in psychiatric drugs or psychiatry.
However, the Church of Scientology said the ambassadors' programme gave out good information about the dangers of illicit drugs.
Despite the church's stance, the Department of Internal Affairs, which oversees the grants scheme, is to review its procedures so local committees have adequate information when making decisions.
"Groups have to account for the use of a grant and the department will be checking [the ambassador's] accountability information to ensure the funding was used for the purpose for which it was granted and not for religious purposes," a spokesman said.
Community grants provide funding to non-profit community organisations that deliver social and community services such as food banks, services to youth and grief counselling.
While this included services provided by religious groups, grants were not available to fund the promotion of religious views or objectives, the department said.
The spokesman would not say if the department would check the material printed with the help of the grants for suitability.
Green MP Kevin Hague, who last week called for the grants to the drug-free ambassadors to cease, said anyone applying for a grant should have to be open about their affiliations.
"It wouldn't be so much of an issue if the Church of Scientology was open that it was behind things. But the use of other names that don't give the public or the funders a clue about what the groups really are is a problem."
Hague said it was more important the Department of Internal Affairs made safeguards for the future rather than worrying about this particular set of grants.
New Zealand's Scientology head, Mike Ferriss, said the groups given money by the grants would not have misused it. Ad Feedback
Ferriss wanted it to be known that one of the church's critics, the New Zealand Drug Foundation, only supported a mental health approach to drug rehab and education.
"They could be seen as a psychiatric front group lobbying the government and attacking faith-based drug rehab which has a good record of getting people off drugs."
New Zealand Drug Foundation chief executive Ross Bell said the foundation supported evidence and scientific-based mental health and addiction services.