The Department of Internal Affairs is not investigating the Otago Rugby Football Union, but is auditing one of the cash-strapped union's major funders.
Last week, the Otago Daily Times revealed the union was involved in buying three Auckland bars, with grants from their poker machine revenue set to flow into its coffers.
However, an application to set up a poker machine trust was turned down by Internal Affairs, following concerns over the union's influence, documents released under the Official Information Act show.
Following the failure of the trust to obtain a licence, the bars, known as "The Jokers", were changed to another trust, The Trusts Charitable Foundation (TTCF).
That trust was responsible for more than half of the $5.1 million in pokie grants given to the ORFU between 2005 and 2010.
Those grants were designated solely for the amateur game.
Internal Affairs yesterday said it was investigating TTCF.
Gambling Compliance director Debbie Despard confirmed its focus remained with TTCF, and not the union.
"The department recently commenced an in-depth audit of The Trusts Charitable Foundation and outstanding matters will be investigated during that audit, including a look at ORFU grants, among others," Ms Despard said.
"Should the department find any anomalies it will address them with the society.
She said the department looked into issues involving the ORFU in 2006 "about several TTCF grants in Dunedin, but there was insufficient evidence of links to, or influence of, Otago Rugby and TTCF passed audit".
