The New South Wales government funded a $16m education project closely associated with the spouse of a state minister despite a cost-benefit analysis showing the project would be unlikely to deliver a positive benefit to the state.

The 2016 analysis of the proposed Country Universities Centres has surfaced after a call for papers by the NSW Legislative Council. The project was proposed by Duncan Taylor, husband of the upper house Nationals MP Bronwyn Taylor, who at the time was parliamentary secretary to John Barilaro, the state Nationals leader and deputy premier.

The funding of the CUCs has led to fiery exchanges in question time and has been the subject of a parliamentary demand for documents following reporting on the project by Guardian Australia.

The latest documents show Barilaro pushed for the Country Universities project to be funded even though the 2016 analysis found the proposal to set up five study centres in country NSW would not deliver value for money for the taxpayer.

Bronwyn Taylor has said she played no role in securing the state funding for her husband’s project.

The documents confirm that the grants – $8m in 2017-18 and a further $8m in 2019 – were made without tender following a direct approach by Duncan Taylor to Barilaro.

Barilaro, who has boasted that his nickname should be “Pork Barrelaro”, and who is highly skilled in getting money for the regions, took an active role in funding the Country Universities Centres.

One bureaucrat noted she was “getting pressure from Dep Prem office” to get the CUC project funded, while several others noted the project was urgent.

At the time Duncan Taylor was the chair of the Cooma Universities Centre, which had been established with support from Snowy Hydro. Taylor was seeking state funding to set up five more centres to allow country students to study close to home. He later became chief executive of the CUC network.

The documents show Country Universities Centre planned to pay the chief executive $170,000 a year. Duncan Taylor, who eventually took the job and stepped down as chair, has told the Guardian that he took the job on a voluntary basis and is not paid.

The CUCs subsequently also received $5.1m funding in 2018 from the federal government, including $830,000 for a centre in Goulburn in the seat of Hume, the seat of the federal energy minister, Angus Taylor. Angus is the brother of Duncan, and Angus Taylor’s wife, Louise Clegg, is on the board of the Goulburn CUC.

A spokesman for Angus Taylor said he “had no influence in the decision to award any of the grants to Country University Centres in NSW, including the Goulburn CUC”.

Minister Taylor made no representations to the minister for education or his department. Spokesman for Angus Taylor

“Minister Taylor made no representations to the minister for education or his department in relation to this matter.”

The 2016 cost-benefit analysis, which was done in a matter of days before Christmas by the industry department’s investment appraisal unit, found the project’s claims of benefit to the state due to increases in country students completing degrees were “unrealistic”.

It said that completion rates would need to rise by 10.6% just to reach break even. But given the project was targeting part-time students whose completion rates were below 50%, this was “highly optimistic”.

It concluded “that a cost benefit analysis using realistic student completion assumptions … is unlikely to find that the project would generate a positive net benefit to the state”.

It did note there could be equity reasons for funding the centres, as country students include larger numbers of poor and indigenous students.

Highlighting the rushed nature of the project, the analysis noted it was done on “a preliminary basis with insufficient time to conduct a full and rigorous cost benefit analysis”. It said there had been much less testing of the information provided than was normal and there had not been time to conduct due diligence on the proposal.

The documents also highlighted concerns the CUC proposal would duplicate Tafe. But this issue appears not to have been pursued in the face of the urgency to fund the program.

The 2017-18 grant of $8m was made from unallocated funding within the industry department that was “repurposed”. Barilaro announced the initiative at a Young Nationals conference in April 2017.

In one email, bureaucrats discuss whether the matter needs to go to cabinet or go through the expenditure review process.

“As discussed, I expect it is the DP’s [deputy premier’s] call as to how he would like to proceed, but if there are rules or expectations to follow then we should advise him of that in the brief,” one bureaucrat said.

In February this year, the second grant of $8m was being considered by Barilaro’s department to open CUCs in Mudgee, Tumut, Deniliquin, Young and Parkes.

A briefing document shows the departmental secretary directed his department “to examine whether there is a basis for direct negotiation with CUC”. The memo notes that direct negotiation is generally not advised but could be justified if the project demonstrates “uniqueness”.

While grants are not subject to the procurement rules, the memo noted that “care must be taken to adhere to the Independent Commission against Corruption guidelines which state: ‘as a general rule, direct negotiations should be avoided unless they clearly fall within the the government’s legislative and policy framework and/or the risk of corrupt conduct has been managed in accordance with these guidelines’.”

The second $8m grant was announced by Barilaro in February 2019, just before the state election.

It is unclear from the documents whether the project went to cabinet. A spokesman for Barilaro said: “The NSW Government followed all procedures as recommended and approved by the NSW Department of Industry.”

The shadow treasurer, Walt Secord, said the documents prove that no due diligence was undertaken.

“In short, these documents show that the Berejiklian government should have not funded the project,” Secord said. “With the release of these documents, the Berejiklian government has many questions to answer including why they funded this project when the advice warned against it.”