Scott Morrison backs Bridget McKenzie in sports grants scandal and will ‘clarify’ legal issues

Scott Morrison has said the federal government will move to “clarify” and address the “legal issues” raised by the auditor general in a scathing report which found Bridget McKenzie may have lacked power to hand out $100m in sports grants targeted at marginal seats.

On Monday Morrison weighed in, backing the former sports minister over her handling of the community sport infrastructure grant program but avoided questions about whether his office had any role in using grants to target marginal seats.

Morrison told ABC’s AM that the “auditor general found there were no ineligible projects that were funded and the rules were followed”.

However, the Australian National Audit Office report also said it is “not evident to the ANAO what the legal authority was” for McKenzie to approve grants, comments which have led lawyers to warn that clubs which missed out on federal funding could bring court cases to overturn her decisions.

Related: Explainer: Bridget McKenzie is digging in over calls to resign but does her defence stack up?

“The auditor general’s report was very serious and we are acting on its recommendations and moving quickly to do that,” Morrison said.

“And on top of that there are some legal issues raised by the auditor general which I’m moving quickly with the attorney general to ensure that they’re clarified as soon as possible.”

The attorney general Christian Porter told Guardian Australia: “The auditor-general made comments concerning the legal basis for ministerial involvement in the relevant process and given the lack of any conclusive view offered by the auditor-general, the prime minister has sought further consideration of the issue, which I am attending to.”

Asked if he or his office played any role in allocation of the grants, Morrison replied: “The decisions were done in accordance with the process the minister set out, that was the minister made those decisions and they were actioned in an endorsing way by Sports Australia, that’s how it worked.”

On 3AW Radio, Morrison said the cabinet had approved the program but individual grants were made by the minister and Sports Australia.

Asked if Liberal head office had any role in deciding where grants should be made, Morrison replied: “Not that I can speak of.”

Morrison said it was “hard to say” that grants were given to achieve political goals because McKenzie’s intervention had resulted in more Labor seats receiving grants.

“I continue to support her [Bridget McKenzie].”

Morrison said that program is “delivering very much-needed grants to local communities to build sporting facilities that I know those communities are very appreciative of”.

He said the grants were spent “ensuring young girls don’t have to change in their parents cars or out the back of the shed”.

The auditor general’s report, released on Wednesday, found that 70% of projects approved by the minister in the second round in March 2019 were not recommended by Sport Australia, rising to 73% in the third round in April 2019 after an extra $40m was tipped into the program.

McKenzie has defended her handling of the program, insisting that all projects granted funding were eligible and “no rules were broken”.

The program has generated a week of bad headlines for the government including a $500,000 grant to Mosman Rowing Club in Tony Abbott’s seat of Warringah, Labor MP Graham Perrett being excluded from the announcement of a grant he helped lobby for, and a $500,000 sports grant in the rural Victorian seat of Mallee a year and a half after it was first rejected when the seat became hotly contested due to the resignation of Nationals MP Andrew Broad.

An inquiry into the program is likely, as Labor has vowed to expose the projects recommended by Sports Australia that were denied funding by ministerial intervention. The Greens, Hanson and Centre Alliance have offered to support a Senate inquiry.