Coalition MPs have continued to defend the controversial "sports rorts" grants, despite a Senate inquiry hearing that more than 40 per cent of projects that shared the $100 million in funding were ineligible for it.
On the Sunshine Coast on Friday to open a new surf club with rebel former Nationals MP Llew O'Brien, Deputy Prime Minister Michael McCormack rejected the damning evidence that has further undermined the scandal-plagued program.
Liberal senator Mathias Cormann also stood by the eligibility of sports grant recipients on Friday while, only hours earlier, Nationals backbencher David Gillespie brushed the claims aside.
"Look, that is a technicality," Dr Gillespie told Sky News.
In somewhat of an own-goal for the Coalition, the revelations about eligibility for funding came in response to a question at the Senate inquiry from Liberal senator Eric Abetz. On Thursday night, Australian National Audit Office executive director Brian Boyd told the inquiry that more than 40 per cent of projects given money under the scheme were ineligible for it by the time agreements were signed.
That was mostly because many clubs had started, or even finished, projects before the government signed off on the funding.
Mr Boyd's evidence demolished the government's running claim that all of the projects it funded were eligible – even if they did not meet guidelines.
The Prime Minister has claimed at least 16 times that all of the projects funded under the scheme were eligible.
Other Coalition MPs and Senators have used the same defence as the sports rorts controversy has rolled on, despite claiming the scalp of front-bencher Bridget McKenzie.
On Friday, Mr McCormack rejected the ANAO's evidence.
"All the projects … put to final funding by Sport Australia were indeed eligible," Mr McCormack said at the Sunshine Beach Surf Life Saving Club.
"I appreciate too that the Senate inquiry had its first night, I appreciate that it is a very politically charged environment in the Senate inquiry."
The surf club secured $2.5 million for its club redevelopment project in March 2019 to demolish its aged clubhouse dating back to 1983, paving the way for a new clubhouse.
Mr McCormack said that funding came from the $841.6 million Building Better Regions Fund.
Related: Michael Pascoe: Coalition rorts spiral out of control
Opposition Leader Anthony Albanese said on Friday the evidence to the inquiry proved Mr Morrison was "loose with the truth".
"Scott Morrison thinks that marketing and spin will solve every problem and that marketing is more important than telling the public the truth," Mr Albanese said.
An explosive ANAO audit uncovered blatant political pork-barrelling in the program, with grants awarded by the Morrison government based on colour-coded electoral margins.
Officials at the Senate inquiry also confirmed that the Prime Minister’s Office made “direct” representations about which projects to fund and the Liberal Party submitted a wish-list of projects in the key marginal seat of Longman, which it hoped to snatch from Labor.
The inquiry has also heard there were at least 28 versions of the spreadsheet, detailing which groups would receive funding and the electorate they were located in.
The document was shared with Mr Morrison's office and showed applications could swing from approved to denied within hours without explanation.
Auditor-General Grant Hehir told the inquiry a parallel process run by then-sports minister Senator McKenzie's office alongside Sports Australia's "was not informed by clear advice and was not consistent with the program guidelines".
"Potential applicants and other stakeholders have a right to expect program funding decisions will be made in a manner and on a basis consistent with published program guidelines," he said.
Mr Morrison had his department head and former chief of staff, Philip Gaetjens, conduct a separate review that absolved the government of any wrongdoing.
Mr Gaetjens' report has not been made public, although Senator McKenzie quit as agriculture minister over a technicality he revealed – that she had given money to a club she had not declared her membership of. But Mr Morrison said Mr Gaetjens found "no basis for the suggestion that political considerations were the primary determining factor".
The committee wants Mr Gaetjens to explain how he reached his conclusion.