The Federal Government used a $1 billion “slush fund” to hand $3 million to a Perth soccer club after lobbying by a One Nation senator amid frantic horsetrading over government legislation.

The Floreat Athena Football Club grant came from the Community Development Grants program, which has been attacked by Labor as a slush fund to prop up marginal seats and by the Auditor-General for a lack of accountability. Announced by One Nation senator Peter Georgiou, it will be used to upgrade Litis Stadium.

The decision to approve the grant, which blindsided landlord City of Vincent and governing body Football West, was made just two weeks after Finance Minister Mathias Cormann asked then regional development minister John McVeigh to consider it. It was approved by Malcolm Turnbull on August 23, the day before he was deposed as leader, in what may have been one of his last acts as Prime Minister.

The Department of Infrastructure, Regional Development and Cities has not yet done a formal assessment and offered no advice to the Prime Minister on whether it was a “proper use of Commonwealth funds”.

Senator Cormann met the club about its plans on August 9.

Camera Icon WA One Nation senator Peter Georgiou with his party leader Pauline Hanson. Credit: Simon Santi

He would not comment on whether he had asked Mr McVeigh to consider the grant as part of Senator Cormann’s negotiations with One Nation over legislation in the Senate, but confirmed the decision was made after lobbying from Senator Georgiou. At the time Senator Cormann wanted One Nation support for tax cuts.

Senator Georgiou denied he had requested funding as part of negotiations. He said it was a strong community club.

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A National Audit Office report last week criticised the administration of the grants program, saying there was little critical analysis, the Department relied on organisations to self-justify and failed to reveal if criteria had been met.

Labor has described it as a Government slush fund.

Labor’s government waste spokesman, WA MP Matt Keogh, said the grant looked like a “dodgy deal” with One Nation.

“I’m concerned that such a significant amount of money has been allocated frivolously without appropriate viability testing, due diligence or community consultation,” he said.

“Outsourcing announcements to One Nation, no doubt while negotiating for votes in the Senate, and handing over millions of dollars without due diligence is becoming a habit for this Government.”

The Department said “the grant was approved subject to the receipt of a satisfactory project proposal and the response to request for information being consistent with all relevant requirements under the guidelines of the Community Development Program”.