The parents of children as young as four taking part in Scotland's Cutest Kids on Sunday were told by organisers, Modelscotland, to keep the sponsorship cash they had raised in aid of Children with Cancer UK and US-based Motherless Child Foundation and instead pay it to charity themselves.
Both charities are supposed to have benefitted from previous Modelscotland events but never received any money from the company.
The competition, held at the Pond Hotel in Glasgow, was the first since detectives were called in after parents raised concerns about the whereabouts of donations raised by youngsters at previous Modelscotland pageants.
Previously, organisers have collected cash from parents, promising to pass it on to good causes, but an investigation by The Herald revealed that many charities had no record of ever receiving donations.
However, the five-week police probe was dropped last week with Police Scotland stating that "no criminality has been established".
It came amid fresh questions over Sunday's event, as Children with Cancer UK confirmed that although their logo was being used on the sponsor forms they had no connection with the event.
In November Modelscotland also hosted a fashion show promising all funds raised would go towards Children with Cancer UK, but the charity has yet to receive a penny.
A spokeswoman said: "To date Children with Cancer UK have not received any donations from Modelscotland. We are not aware of any future fundraising events being organised by Modelscotland to raise funds for Children with Cancer UK."
The founders of the Motherless Child Foundation, a Kentucky charity which helps orphans in Kazakhstan, have also warned Modelscotland against using their logo without permission.
In January, Modelscotland provided The Herald with a letter stamped with the US charity's logo purporting to thank them for their "generous donation" of £3850, but co-founder Nancy Spurlock said the letter was not theirs and they had never received any money from Modelscotland.
Angel Dairo, director of Modelscotland, claimed the logo belonged to a Nigerian charity.
The Herald contacted Model-scotland last Friday to ask why the charities' logos were being used again, but received no response.
Meanwhile, the mother of a previous Cutest Kids winner has revealed how the prize fell short of expectations. Organisers promised a "year unlike anything else" to the winners, including the chance to represent Scotland in an international beauty pageant held at Disneyland Paris.
However, the mother, who did not want to be named, told how the family were landed with a huge bill when the "all-expenses-paid" trip to Eurodisney turned out to cover only her nine-year-old daughter.
Even then, travel costs did not apply until the family had reached the Folkstone-Calais ferry, leaving the parents to pick up the full tab for getting from Scotland to Kent.
She said: "[My daughter] was thrilled to bits. It was her dream to got to Disneyland Paris. There was a huge build up to it. [Her] entry fee and travel was paid for by Model-scotland. Both my husband and I went but it turned out we had to pay for our own travel and accommodation which was hugely expensive.
"I'm not bitter about it in the sense that we had a fantastic time, and it's something she'll never forget, but it was a lot of money."
A spokeswoman for Police Scotland said: "Inquiries into Modelscotland are complete. No criminality has been established."