Cathy McGowan has made an official complaint against the National Party to the Australian National Audit Office, after more than $3 million worth of federal grants for Indi were hidden from her this week.
The independent MP was not told about the Building Better Regions Fund money until it became a media event with Nationals' Senator Bridget McKenzie and Indi candidate Mark Byatt.
Ms McGowan said some of the successful grant winners were told by the federal government not to discuss the funding with her.
They still have not received formal notification of the grants, which Ms McGowan said caused "significant confusion and distress".
"I am also concerned that taxpayer-funded grants are being used for party political purposes by the federal government," she said.
"The $3.4 million worth of Commonwealth grants for Indi are not gifts from individual MPs, political candidates or the government.
"These are highly-competitive regional development and infrastructure grants, made by the Australian government under the taxpayer-funded BBRF.
"By arranging for the un-elected candidate to 'announce' these grants without due process and transparency, the government appears to have used taxpayer dollars for their own political purposes."
The media release put out by the Nationals on Monday morning gave credit for the funding to Mr Byatt, despite the fact he had only been in the position for a month and a Nationals member about two months.
Ms McGowan said she gave her written support to the projects submitted by the councils as far back as October and supported them when making her budget bid to Treasurer Josh Frydenberg in December.
According to the National Party statement, Senator McKenzie - who opened her Wodonga office last week and now considers the North East her home - was “invited to the region” by Mr Byatt.
He had apparently “been working hard to ensure Indi was well represented in this round of funding”.
Mr Byatt took credit for the funding win himself in the statement, also promoting the funding announcement as a reason to vote for the National Party.
“I have spoken with most of these organisations in recent times and taken their message directly to the minister,” he said.
“I believe it highlights the benefit of having a Nationals member for Indi at the table of the only party in there fighting for the regions all day, every day.”
A spokesman for Senator McKenzie said they welcomed Ms McGowan's support for the BBRF.
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