The Prime Minister has acknowledged that details of the funding allocated to the Pacific Economic Development Agency could have been better articulated by ministers.
The company, known as PEDA, was directly awarded $4.8 million over four years to improve the economic wellbeing of Pacific people - a contract that, Opposition MPs say, should have been put up for tender.
Now the Government says that if a purchase agreement cannot be secured with PEDA, other organisations can apply for the funding.
John Key says he's comfortable with the amount of money and the agency chosen but admits the matter could have been better handled by Pacific Affairs Minister Georgina te Heuheu.
Proposal was practical - English
Earlier on Friday, Finance Minister Bill English denied claims that PEDA submitted a flimsy budget proposal when it applied for funding.
Mr English told Morning Report there was no tender process because PEDA took the initiative in the absence of anything else concrete to help unemployment in Pacific communities. Its proposal was very practical and was broken down into detail, the minister said.
Documents obtained by Radio New Zealand show the agency's proposal was only six pages long.
But Mr English said there is also a detailed business case before Treasury.
Tongan council not happy
The Tongan Advisory Council says the grant should not have been made to a private group without a track record.
Chairman Melino Maka told Morning Report the Government tells Pacific communities to follow best practice, but the Government is not doing so itself.
The council wants the matter opened to tender.