Culture Minister Nelson McCausland criticised the Ulster Scots Agency for spending almost £5,000 on 3,000 Santa hats and an advertisement in an official programme for a rugby match.
He was speaking after giving a statement on the North-South Ministerial Council (NSMC) meeting on language to the assembly on 8 December 2009.
Mr McCausland said that at a time of scarce resources, it was "hardly setting the right example" in the use of public funds.
The hats, promoting the Ulster Scots Agency website, were handed out at last Friday's rugby match between Ulster and Glasgow at Ravenhill in Belfast.
The minister said there were ongoing issues over the strategic direction of the agency and he wanted to ensure it was fit-for-purpose and provided value for money.
During the NSMC meeting, ministers had received progress reports on developments at the Ulster Scots Agency and Foras na Gaeilge.