In 1994, at the height of an eerily familiar sports rorts scandal, John Howard stood up in parliament and fired a question at besieged Labor sports minister Ros Kelly.

Does the minister agree that, whatever debate there may be concerning the principle of ministerial responsibility, the practice has almost invariably been that a minister resigns when his or her continued presence is causing damage and embarrassment to that government?

The scandal Kelly faced was a near carbon copy of the one now embroiling Nationals minister Bridget McKenzie.

In both cases, audits found damning failures in the administration of sports grant programs. In both cases, ministers were found to have been influenced by political bias in deciding where money went.

But, for now at least, there’s a critical difference.

Kelly resigned within weeks of Howard’s question. McKenzie looks as though she’s going nowhere. She’s dug in, branding suggestions she resign as “ridiculous”.

So how is McKenzie defending herself from the damning findings of the auditor-general? And does her defence stack up?

Former Labor sports minister Ros Kelly was forced to quit over a scandal that was almost identical to the one currently facing Bridget McKenzie. Photograph: Lee Besford/AAP

1. ‘No rules were broken’

The chief defence of the former sports minister, now agriculture minister, is simply that no rules were broken.

This may well be true. The projects that received funding were all eligible to receive it, and the usual rules around Commonwealth grants don’t apply in this case.

But as Melbourne University integrity expert George Rennie observed this week:

It’s been said before, but worth repeating: the rules are broken.

Let’s test this proposition. The rules – if none were broken, as McKenzie says – allow a minister to divert taxpayers’ money for political gain, in the process overriding their department’s considered recommendations on where the money would be best spent.

No pub in the country would give that a pass mark.

But there’s another, more fundamental problem. There are serious questions over whether there was any legal basis whatsoever for McKenzie’s office to decide where the money should go.

To appreciate this, you’ll need a rudimentary understanding of how the program in question – the community sport infrastructure grant program – works.

The scheme first came into existence in 2018. It was designed to dole out $100m across three rounds to fund worthy projects proposed by sports clubs, councils and sporting associations nationwide.

The aim was to improve sport infrastructure – oval upgrades, lighting improvements, new changing rooms, for example – and boost community sports and physical activity in the process.

So far, so good.

It was wildly popular. When it first opened, Sport Australia, the government body that administered the program, received 2,056 applications for projects worth $397m.

Clearly, not all of them could be winners.

So, to work out how to best spend the money, Sport Australia assessed each project against a set of criteria, giving each proposal an overall aggregate score.

The scores are important for two reasons. They ensured the most needy and worthwhile projects got the money, and also prevented taxpayer funds from being wasted on risky endeavours.

There’s no dispute that the vast, vast majority of projects proposed by local sporting clubs were worthy. But they can’t all be funded. Photograph: Darren England/AAP

To be successful, a project would generally need a score of 74 out of 100.

Yet a staggering 417 projects, or 61% of the total approved projects, received money despite being assessed below this score.

One of the projects that got the money received a score of 39. Scores that low were considered by Sport Australia to be “too low to fund without significant risk to the completion period and/or safe passage of the project”.

For its part, Sport Australia did nothing wrong when examining the merits of the projects. It made its guidelines for assessing projects public and largely stuck to them.

So, how on earth could this happen?

Well, it all comes down to ministerial discretion.

The projects were sent up to McKenzie’s office for a final sign-off. McKenzie’s office ran its own parallel assessment process, and doled out the money as it saw fit. The minister’s assessments took into account extraneous factors, outside of Sport Australia’s guidelines.

The intent was clear: direct money to marginal and targeted seats to help the Coalition win the election

The approvals, the auditor found, were plagued by distributional bias and tended to go to electorates that were marginal, or that the Coalition was targeting in the upcoming election.

So, according to the auditor, it was at this ministerial level that an otherwise sound process was warped.

The auditor-general Grant Hehir said it was not clear what legal basis McKenzie had for taking on an “approval role” in the program. “It is not evident to the [Australian National Audit Office] what the legal authority was,” his report said.

Sport Australia had recognised in mid-2018 that the relevant law – the Australian Sports Commission Act – required it to authorise the grants, not the minister. The health department raised a similar issue and said that if the minister wanted to be the final decision-maker, her office would need to seek legal advice.

No such legal advice was sought.

So is McKenzie right that no rules were broken, when there is a cloud over the entire legal foundation she used to exercise power as a decision-maker?

If so, then surely, as Rennie argues, the rules are in serious need of reform.

2. ‘My intervention helped Labor’

McKenzie coined an interesting term in her defence this week: “reverse pork-barrelling”.

She used the term to claim her intervention had, in fact, led to a greater level of support for projects in Labor seats. McKenzie said 26% of the recommended projects were in Labor electorates. Her interventions raised the final proportion of approved projects in Labor seats to 34%.

Ministerial discretion was actually written into the guidelines for a purpose. And what that actually meant was that there were more projects supported and funded in Labor seats than if that ministerial discretion had not been deployed.

This is a flawed argument on a number of levels.

But, most importantly, it conflicts with the clear findings of the audit report.

The report states unequivocally that the minister’s approach in deciding where to distribute the money was influenced by the Coalition’s pursuit of marginal and targeted seats at last year’s election.

It’s all there in the minister’s own records.

Documents show that in November 2018 the minister had identified 705 projects in marginal or targeted seats, including 481 projects in 30 Coalition-held electorates, 126 projects in 13 Labor-held electorates, and 98 projects in four electorates held by independents.

“The award of funding reflected the approach documented by the Minister’s Office of focusing on ‘marginal’ electorates held by the Coalition as well as those electorates held by other parties or independent members that were to be ‘targeted’ by the Coalition at the 2019 Election,” the auditor found.

The office also took into account “representations” from senators and MPs about where the money should go, and spoke directly to other parliamentarians about their key priorities “with a priority on marginal and target seats”.

The proportion of Labor-held seats that received funding is a red herring. The intent was clear: direct money to marginal and targeted seats to help the Coalition win the election.

3. The projects we funded are benefitting the local community

In defending the program’s administration, current sports minister, Richard Colbeck, said the projects funded were having “positive impacts” on their communities.

McKenzie herself said the program was “hugely successful” and cited the fact it had been “oversubscribed”.

Quite clearly, this is not the point. There’s no dispute that the vast, vast majority of projects proposed by local sporting clubs were worthy.

But they can’t all be funded.

That’s why it’s so critical that the government let Sport Australia use an objective, transparent process to assess each project on its merits, without political considerations muddying the waters.

In so doing, the money goes where it is most needed and the maximum “positive impact” is derived from a limited pool of funds.

Instead, the process was warped in a way that allowed money to go to projects which Sport Australia deemed as a “significant risk” of not being completed.