Four civil servants have been fired and five of their colleagues disciplined after lewd sex claims at their Newcastle office.
The Rural Payment Agency staff allegedly had sex in toilet cubicles, jumped naked from office cabinets and held dance competitions, according to a whistleblower.
Staff at the Tyneside office were investigated for inappropriate behaviour after the claims were made in June.
Agency chief executive Tony Cooper said the agency took the matter very seriously.
"While the investigation made clear that many of the initial reports were overblown, there have been incidents of misbehaviour that are simply unacceptable in this organisation," he said.
"I am satisfied that the correct actions have been taken to deal with the misbehaviour of the small number of individuals involved."
The agency, which was set up to make payment to farmers from European subsidies, has also strengthened management procedures and has issued a code of conduct to all staff relating to appropriate behaviour at work.
Staff are also alleged to have vomited into cups and left them to fester in cupboards.