The auditor-general has slammed the government's $100 million federal community sports grant program for targeting marginal electorates.
It found the most successful grant recipients were not the most deserving according to program criteria.
Most of these grants were awarded in coalition seats or marginal seats the government was targeting at the 2019 federal election.
The audit was sparked by Labor after Liberal candidate Georgina Downer doled out a $127,000 cheque for a local bowling club in South Australia as part of the program during the election campaign.
Labor says the prime minister must stand down Nationals deputy leader Bridget McKenzie, who was the sports minister approving the grants at the time.
Shadow sports minister Don Farrell said the program was a shameless politicisation of taxpayers' money.
"This betrayal of the sporting community means it is now impossible for clubs to have any faith that this government will assess their grant applications on merit," Senator Farrell said.
Nine of the 10 electorates approved to receive the greatest amount of money were either marginal electorates - seats the government held by a slim margin - or ones identified by Senator McKenzie as being coalition targets.
These seats would have received less funding if Sports Australia merit assessments had been used, instead final approval was given to the minister.
The office of Senator McKenzie, who is also National Party deputy leader, used its own criteria to award applications, the report said.
"The award of funding reflected the approach documented by the minister's office of focusing on 'marginal' electorates held by the coalition," the report said.
"As well as those electorates held by other parties or independent members that were to be 'targeted' by the coalition at the 2019 election.
"The award of grant funding was not informed by an appropriate assessment process and sound advice."
The audit found there was "no legal authority evident ... under which the minister was able to be the approver of CSIG program grants to be paid from the money of Sport Australia".
In evidence to the Australian National Audit Office, Senator McKenzie's office denied accusations of pork barrelling, saying it had made sure to not be over-represented in coalition areas.
"The success of the program relied on the support across parliament so needed to make sure the spread of projects reflected the statistics and could be seen as fair," her office told the auditor.
Nine of the 10 electorates that received the least funding were Labor seats and 'safe' government seats received less money than they would have if the proper criteria had been used.
The report found 61 per cent of applications were funded despite not reaching the necessary assessment score.
The auditor made a number of recommendations to Sports Australia as well as one to the finance department.
Sports Australia agreed to strengthen its assessment records, have employees declare conflicts of interest and also to design grant programs based on expected demand.
The finance department noted a recommendation to ensure grants funding guidelines apply to government ministers in situations where they are the decision-maker.
The current Sports Minister, Richard Colbeck, said the government would take action on the audit's findings.
But he defended the program, saying it had made "positive impacts" on the communities.
Australian Associated Press
