An investigation into the Sir Ray Avery Foundation found the charity is complying with the law.
It comes after 1 NEWS received complaints by some donors and schools that raised money for the charity's LifePod incubators.
They said Sir Ray led them to believe the incubators were saving babies' lives in the Pacific, when they were not yet in production.
Maria Robertson of Internal Affairs said there were questions whether the Foundation was actually going to be able to deliver what was intended.
However, she said the investigation "found there were not issues from a compliance perspective and it was delivering on its purpose".
Sir Ray apologised to the public in July for giving the impression the LifePods were being deployed and promised it would be ready in February.