Scott Morrison has referred embattled cabinet minister Bridget McKenzie's decision to award a $36,000 grant to a shooting club she was a member of to the head of his department.

The former sports minister is under immense pressure over a $100 million grant scheme the auditor-general found favoured clubs in marginal seats before the election.

Prime Minister and Cabinet secretary Philip Gaetjens will check whether her actions breached ministerial standards.

AAP

In a statement, the prime minister's office said Mr Morrison had referred the auditor-general's scathing report to Mr Gaetjens on Friday.

"The Prime Minister is awaiting the secretary's advice and will continue to follow due process. The matters raised in the media today have also been referred," a spokesman said on Wednesday.

Labor leader Anthony Albanese again demanded Ms McKenzie resign after it emerged, Wednesday, Senator McKenzie gave a grant under the program to a shooting club she is a member of at Wangaratta in Victoria.

The Nationals deputy leader downplayed her ties to the club that received nearly $36,000 under the federal government scheme.

Nine newspapers first reported Senator McKenzie awarded the grant, without publically disclosing she was a member of the sporting club.

Speaking on radio in Adelaide, Mr Albanese said: "she's got to go".

"This is just red hot. This is just a rort," he told FIVEAA.

"It fails the pub test. It fails every test."

The auditor-general found the former sports minister, in charge of the program, allocated the $100 million in grants favouring marginal seats before the last election.

The audit also determined Senator McKenzie, now agriculture minister, ignored merit-based recommendations from Sport Australia in the distribution of funding.

The Wangaratta Clay Target Club received $35,980 to upgrade facilities at the club located in regional Victoria, including the installation of toilets and amenities.

Senator McKenzie announced the grant in February on her Facebook page, with a picture alongside Nationals candidate for the seat of Indi Mark Byatt. The seat was won by independent MP Helen Haines.

Wangaratta Clay Target Club

The shooting club stated it considers Senator McKenzie to be one of its members in its own announcement of the visit on its website.

“Not many gun clubs can claim federal ministers amongst their membership, but the Wangaratta Clay Target Club now can,” the website reads.

"While here to talk to the committee, Bridget signed up to our club as a full fee-paying member.

“She is moving her electorate office to our region and chose our club to show her support for the work we are doing to not only keep the club active, but to continually improve all aspects of our operations.”

In May 2019, the club gave special thanks to Senator McKenzie in a Facebook post showing the upgraded facilities.

Senator McKenzie did not disclose she was a member of the club when her senator's register of interests was last updated on November 21.

READ MORE Constitutional questions loom over $100 million community sports grants

A spokeswoman for Senator McKenzie said the Wangaratta Clay Target Club membership was a “gift” valued at less than $300, so a declaration to the Senate was “unnecessary”.

"Round-two funding became available in December 2018 at MYEFO and funding decisions were made from that time," the spokeswoman said.

This suggests the grant may have been considered prior to Senator McKenzie becoming a member.

It comes as The Guardian found more than $1 million in sports grants was handed to nine clubs that had Coalition MPs as members or patrons.

The memberships are listed in MPs’ register of interests, with the exception of Senator McKenzie's links to the shooting club.

It also reported upmarket tennis and golf clubs were among the list of sports clubs to receive grants under the scheme.

A Perth tennis club boasting “million dollar views” received $500,000 and $190,000 went to a golf club in the Adelaide Hills to upgrade its foyer to attract more wedding bookings.

Senator McKenzie has refused to apologise for her handling of the $100 million program saying “no rules were broken” and all projects that received funding were eligible.

Mr Morrison and Deputy Prime Minister Michael McCormack are backing the under-fire minister.

Treasurer Josh Frydenberg, whose electorate was awarded more than $700,000 from the sports grants program, has also defended his colleague.

"Grants right across the electorate, for Labor and Liberal members, and National party members alike, applied through the proper processes, received the grants, they were all eligible and the money is being well spent," Mr Frydenberg told 2GB radio.

Former Labor sports minister Ros Kelly stepped down from the ministry and then parliament in 1995 following a similar scandal.

With AAP.