On Sunday, the prime minister, Scott Morrison, announced that Bridget McKenzie, once the government’s sport minister, would be standing down. This was meant to end all scrutiny of McKenzie’s mismanagement of the community sport infrastructure program.

Morrison referred to the report from the head of his department, Philip Gaetjens. The report found no political bias in the minister’s decision-making, and it saw nothing wrong with McKenzie’s use of ministerial discretion. But usefully for the prime minister, it did find that McKenzie had failed to manage a perceived conflict of interest when awarding one grant.

McKenzie’s resignation allowed the government to decree that everything was resolved. As the government’s deputy leader in the Senate, Simon Birmingham, said, the grants program had been exhaustively examined. Now was the time to move on.

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Except.

There are two reasons for not moving. The defences mounted for McKenzie by Morrison are wholly inadequate, and the lessons we should learn from the mismanagement of this program go to the heart of good government. To ignore them, as the government wants of us, is to permit corruption in the federal government.

Morrison had directed his departmental head to report on McKenzie’s behaviour because the commonwealth has no anti-corruption body.

Gaetjens, who for 13 years had been a chief-of-staff for senior Liberal ministers, including for Morrison, suffers from the perception that he is more a politician than a public servant. His employment depends on Morrison. The auditor general, an officer of parliament, is independent of government. Morrison, who talks about the need for transparency, kept Gaetjens’ report a secret. The audit report is reviewed by departments before publication. It is open to public and parliamentary examination. Of the two reports, you know which you can believe.

The little Morrison revealed about the Gaetjens report demonstrated its shortcomings. Gaetjens apparently found that, even after McKenzie intervened in selecting sports grants, the success rate of applicants from marginal and contested electorates was lower than the rate from other electorates. But this is irrelevant to the audits’ central finding: McKenzie discarded nearly 300 applications to choose 300 of lesser merit mainly because her grants benefited contested electorates and they politically benefited the government.

The lessons we should learn from the mismanagement of this program go to the heart of good government

Gaetjens noted that the guidelines of the community sport infrastructure program “clearly and publicly identified the Minister as having final approval authority and the right to consider other factors”, Morrison said. He said the guidelines did not constrain this discretion in any way. Accordingly, Gaetjens concluded there was no basis for Morrison to find that the minister has breached ministerial standards in this matter. Morrison, and Gaetjens, overlooked that the guidelines conflicted with the law. Law trumps guidelines, and law gave McKenzie no discretion and no right to select grants.

Morrison mumbled – and it was mumbling – about the auditor general’s inability to find any legal basis for McKenzie’s decision making. Quoting the attorney general, Christian Porter, Morrison said the auditor general’s view was, “with respect, not correct”. But we do not know what Morrison’s legal advice said. We do not know if indeed he has any formal advice. If he does, we do not know who prepared it. And notwithstanding Morrison’s advocacy of transparency, we shall never see it. But we do know that any such advice would contradict the views of experts, including of Anne Twomey, professor of constitutional law at the University of Sydney.

Every government minister who has defended McKenzie has carelessly, even intentionally, misled the public. Yes, ministers receive advice from departments which can be accepted or rejected. But that is irrelevant: Parliament provided the appropriation for these sports grants not for the Department of Health but for the Australian Sports Commission. It was up to the ASC to make the grants. And the ASC was established by law to act independently of the minister. McKenzie had no right to select individual applications.

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Unfortunately, the ASC acquiesced when it had the power to stand up to the minister for sport. The ASC board complained, but it caved in. ASC board members should offer their joint resignation for their weak, complicit response. Their resignation would empower members of other government boards to protect their independence as parliament intended.

Government ministers also ignore the constitution. It does not permit them to provide grants for kitchens, barbecues, toilet blocks or elevators. And they do so while ignoring real commonwealth responsibilities, including for dental services.

Most importantly, the mismanagement of grants offers evidence of electoral bribery. And there is evidence of misconduct in office. Each proven offence allows the possibility of imprisonment. If we move on now as the government wants, we tolerate government illegality. That is how important this matter is.

• Tony Harris is a former senior commonwealth officer and former New South Wales auditor general