The Australian National Audit Office began investigating the Coalition government's Community Sport Infrastructure Program at the request of Labor, after Liberal candidate Georgina Downer gave a $127,000 cheque to a South Australian bowling club as part of the scheme.

But the audit office found the novelty cheque was just the beginning.

Auditor-General Grant Hehir said the selection of successful grants "was not informed by an appropriate assessment process and sound advice". There was also evidence of "distribution bias" in how grant funding had been awarded.

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While Sports Australia did assess applications and provide a list of projects that should get funding to the minister's office, the minister's office ran its own "parallel" assessment process, which ultimately determined where grants went.

"The award of funding reflected the approach documented by the minister's office of focusing on 'marginal' electorates held by the Coalition 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 audit said.

"Applications from projects located in those electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines."

Senator McKenzie's chief-of-staff told the audit office they had used that approach to avoid accusations of pork barrelling.

"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," the chief of staff said.

"Equally, we were sensitive to the accusations of pork barrelling so we were very conscious of projects for the Nationals, as National Party deputy leader, for Victoria as Senator for Victoria or with independents as her electorate office was in Indi so we made sure that we were not overrepresented in these areas."

Senator McKenzie has been approached for further comment.

More to come