HINDMARSH Shire Council says it has "zero faith" in the process of receiving federal funding for sporting infrastructure after a leaked report found grants were not awarded solely on merit.
A document from former Sports Minister Bridget McKenzie's office released by the ABC found that Hindmarsh Shire Council was overlooked for a $471,803 grant last year despite meeting the necessary requirements.
The council's application to replace Nhill's Davis Park grandstand was given a score of 84 per cent out of 100 by Sport Australia's system of evaluation.
A score of 74 per cent was considered the cut-off to receive a Community Sport Infrastructure grant.
Horsham Rural City Council also did not receive funding despite a score of 83 per cent for a grant application of $323,000 to improve all-abilities access and family changerooms at the Horsham Aquatic Centre.
The ABC reported that 94 of the 223 projects deemed successful in the first round of grants would have fallen short of Sport Australia's 74 per cent cut-off.
An auditor-general's report found there was a bias in awarding grants to projects in marginal seats in the lead up to the 2019 Federal Election on May 18.
Mallee, the electorate which encompasses the entire Wimmera, is one of Australia's safest seats.
Pakenham football club in Gippsland received a grant of $500,000 for new change rooms, despite a score of 50 per cent on the Sport Australia rubric. Pakenham is in the Liberal-held marginal electorate of La Trobe.
Hindmarsh Shire Council chief executive Greg Wood said such an egregious example had caused him to lose faith in the system.
"Clearly it has nothing to do with the merit of the actual project," Mr Wood said.
"Nothing against Pakenham ... but they are obviously in a marginal seat that the government was trying to hold.
"We thought we had a fantastic case to have (Davis Park) replaced ... now we're going to be without a grandstand for at least the next football season. It wasn't a fair process."
Member for Mallee Anne Webster said she would not pass judgement on Minister McKenzie until an ongoing review by the Department of Prime Minister and Cabinet had concluded.
Dr Webster said the Sport Australia evaluation system was just "one component" Minister McKenzie had to take into consideration when giving grants.
Dr Webster said Minister McKenzie had also used her "powers of discretion" to select which projects received grants.
Dr Webster denied that those ministerial powers were ripe for exploitation.
"I don't think so. Ultimately she has made decisions that she will have to stand by. We just have to wait for the reviews to come out to determine if there has been any undue bias," Dr Webster said.
Mr Wood said the Sport Australia evaluation system should be made publicly available after grant applications. He said it was necessary to restore trust in the process.
"I think this has really shattered the confidence in this system," Mr Wood said.
"There's an expectation that the government will do something about this - we never get access to that information, whereas I think they should always release it.
"Senator McKenzie has clearly been caught out, but there's also been long-held suspicions that these are the processes the government uses when they allocate grant money."
The Davis Park grandstand is set to be demolished in coming weeks.
"In the normal course of events, we would apply for the next round of grants," Mr Wood said. "But unless the government is prepared to run a fair process, we're not sure what the outcome of that would be.
"It is a lot of work that goes into the community to put a grant application - I couldn't quantify it off-hand, but the whole process would probably take more than 100 hours."
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