The federal agency that oversaw the sports rorts saga has been told to seek legal advice and amend its guidelines on government grants.
A parliamentary inquiry into the scandal has found significant uncertainty over the legality of the grants, which overwhelmingly favoured marginal seats.
The committee found the administration of the scheme did not satisfy public or community expectations.
It has recommended Sport Australia review its guidelines to clarify the role of federal ministers in relation to all current and future grants.
The agency has also been told to re-examine the role of the Australian Sports Commission Board and report back within six months.
Federal government ministers have been directed to keep better records about their decision-making processes in approving community grants.
Labor MP Julian Hill, who deputy chairs the committee, said coalition members had “skewered and slammed” the government.
“Even the government-controlled committee had to admit the administration of the program did not meet public and community expectations,” Mr Hill told reporters on Tuesday.
“And astoundingly, the government MPs had to call into question the entire legal basis of what Bridget McKenzie did in handing out those grants.”
The inquiry looked at the $100 million sports grants program and a separate $222 million regional jobs scheme.
The committee questioned the use of ministerial panels to determine the regional grants.
It recommended changes be made to ensure records are kept of the reasons for ministers approving or rejecting grant applications.
“This is particularly important where a minister approves a grant that a relevant official or entity has recommended be rejected or assessed as ineligible,” the committee said in its report.
Sport Minister Richard Colbeck, who took on the portfolio after the scandal, said he didn’t accept suggestions government members had been scathing of the scheme.
“We will consider the report in the usual manner and make a government response,” he told parliament.
Mr Hill said the report drove home the importance of properly funding the auditor general, who exposed the sports rorts affair.
“Taxpayers across Australia would never know the industrial scale of rorting and pork-barrelling that had gone on with these programs if the auditor-general had not been resourced to do his work,” he said.
“It also brings home the need for a national integrity commission, so that when serious issues are identified through this kind of work, there’s somewhere to go with the power and the teeth to investigate ministers in this government.”