The members of Castlemaine Bowling Club in Victoria range in age from 11 through to 93.

Key points: Castlemaine Bowling Club applied for a Government grant to upgrade its outdoor lighting

Castlemaine Bowling Club applied for a Government grant to upgrade its outdoor lighting The club's grant application was rejected and it wants to know why

The club's grant application was rejected and it wants to know why The Australian National Audit Office found a number of grants were directed towards marginal seats

"The Castlemaine Bowling Club provides a really important function in our community," club secretary Peter Williams told 7.30.

"We have a number of people who are no longer playing who just love to come and have a cup of tea and enjoy the social interaction. I think it's really important in that regard."

To attract more members, the club decided in 2018 that it wanted to start offering bowls later in the evening, which meant it would need to install outdoor lighting.

It applied for what Mr Williams described as a "modest" $40,000 grant through the Federal Government's Community Sport Infrastructure Scheme.

The club reduced the cost down from $100,000 by working out a way to modify their existing lightning.

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"I must admit we were pretty optimistic that we might be successful," Mr Williams said.

Months later they received a response from Sport Australia informing the club its application had been rejected.

"The club [members] were extremely disappointed to miss out on those funds, because it was going to offer so much for the community," Mr Williams said.

That disappointment has now turned into growing frustration.

The Castlemaine Bowling Club in regional Victoria applied for a grant to upgrade their lighting ( ABC News )

The Federal Government has been embroiled in a growing crisis over the grants program after the Australian National Audit Office released a damning audit last week.

The audit found Bridget McKenzie, who was sports minister at the time, overruled some of the recommendations made by Sport Australia and adopted a "parallel" process that favoured some marginal Coalition electorates in the lead up to the 2019 election.

"The fact that it's hit the press about how funds were allocated has been really a shock to us, and really disappointing," Mr Williams said.

"We could accept if we missed out on merit because that's the nature of those sort of applications. But to hear that funds have been dispersed in that way is extremely disappointing, to say the least."

It is unknown whether Castlemaine Bowling Club's application would have been approved on merit.

'We tried to get feedback'

Castlemaine Bowling Club was unable to get feedback on why its application was rejected. ( ABC News )

The Castlemaine Bowling Club now wants answers about why their application was rejected.

Sport Australia ranked clubs using a point-based system with scores of up to 100. The audit into the scheme revealed that some high scoring clubs missed out on grants.

"We tried to get feedback on our application, and we've just been told feedback's not available," Mr Williams said.

7.30 asked the minister's office what score the Castlemaine Bowling Club received from Sport Australia. The minister's office did not respond to questions.

7.30 also asked Sport Australia whether it would release the full scores and names of all clubs who applied for the grants. It has declined to provide the information.

On Wednesday it emerged Prime Minister Scott Morrison had asked the head of his department to investigate Senator McKenzie's handling of the program and whether she may have breached ministerial standards.

It was reported on Wednesday that the minister had awarded a $36,000 grant to a sporting club where she was a member. Her membership has not been disclosed on her pecuniary interest register.

A spokeswoman for the minister said that the membership was a gift worth less than $300 and that she was not required to make a declaration to the Senate.

Sports grants saga an 'abuse of process'

Anthony Whealy says some sporting clubs were reluctant to speak out for fear of being blacklisted. ( ABC News: Tom Joyner )

Former New South Wales Supreme Court justice Anthony Whealy QC, who is a member of the Centre for Public Integrity, told 7.30 the fallout from the Audit Office's findings highlights the lack of integrity measures that bound federal politicians.

"Those who, on the merits deserved getting the grants, didn't get them, and the process was informed, not by impartiality but by a desire to improve the Coalition's chances at the next election," he said.

"So any way you look at it, that must be regarded as an abuse of process."

Other clubs 7.30 spoke with who were denied funding were reluctant to speak publicly because they feared it could jeopardise future funding opportunities.

"If you come forward and complain now you would immediately suspect that you'd be on a blacklist and you'll never get that money," Mr Whealy said.

"If you keep quiet, maybe you'll get it next time. But that's a very sorry state of affairs too, isn't it? That really only happens because people don't trust the Government."

Senator McKenzie denies the allegations and maintains she followed the rules.