A soccer club from the Prime Minister's electorate was a beneficiary of federal funding from a sports grants program embattled in scandal.

Key points: Scott Morrison's local soccer club started the first phase of a construction project without having enough funding to complete the second phase

Scott Morrison's local soccer club started the first phase of a construction project without having enough funding to complete the second phase The Club received a $200,000 sport grant less than two months later for the second stage

The Club received a $200,000 sport grant less than two months later for the second stage The Prime Minister's office insists "at no stage" did Scott Morrison or his staff suggest the club would be successful in getting a grant

The Lilli Pilli Soccer Club began the first phase of a construction project of its clubhouse without having secured enough funding to complete the second phase.

Months after the work began, the club received $200,000 from the Commonwealth for the second stage of the project.

A spokesperson from the Prime Minister's office said: "At no stage did Scott Morrison or his staff suggest the club would be successful or even urge them to apply."

Former sports minister Bridget McKenzie is facing growing pressure to resign over the handling of the $100 million community sports grant program.

According to a report from auditor-general Grant Hehir that found bias in the scheme, Senator McKenzie's office received representations from MPs, including through Prime Minister Scott Morrison's office, during her assessment of applications.

"The evidence available to the [Audit Office] is that representations were received across the three rounds both directly and indirectly, including through the Prime Minister's Office," his report read.

A spokesperson for Mr Morrison said the club had sent a letter to the Prime Minister's office once it had submitted its application on September 15, 2018, "to inform him they had made an application through the proper process and attaching the application for reference".

"Subsequent to the letter, the club asked Scott Morrison's electorate staff if there was anything further they could do to strengthen their case for funding and were told it was a matter for the independent experts to assess."

The new clubhouse, opened by Mr Morrison last year, was built in two stages by the same builder.

The first was commenced in October 2018 and was funded by club savings and a local council grant.

The second stage was funded by the Commonwealth grant announced in December 2018.

Lilli Pilli Soccer Club insists it followed grant processes

Club president Greg Storey, in a statement, said it contacted Mr Morrison's office following its application.

But said he said the club was already looking at other funding options if its application was unsuccessful.

"In our application to Sports Australia, the club explained in detail it was committed to start a major project (phase one) at the oval imminently and sought government assistance to fund a second project," he said.

"On October 19, 2018, the club signed contracts with builders and commenced the Lilli Pilli Oval upgrade works (project one). Funding this project was 20 years of hard earned savings (and a $210k contribution from Sutherland Council to replace outdated public toilet infrastructure).

"The scope at that time (October 2018) excluded desired change-rooms and several community amenities."

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ABC analysis of the 684 grants awarded found Lilli Pilli's grant was the largest awarded to people in Mr Morrison's electorate of Cook.

On October 31, 2018, responding to the club's post announcing stage one of the project, a club representative said on Facebook the work would be finished by March or April.

"Depends on weather/timing of final stage funding.

"But we'll be in for 2019 season."

Mr Storey, in his statement, said in December 2018, while the first phase was under construction, the club was pursuing fundraising and sponsorship opportunities to fund the second phase of the project.

"The club was advised in December that it was a successful recipient of a Community Sports Infrastructure grant," he said.

In 2017, Mr Morrison appeared at the opening of Lilli Pilli's upgraded barbecue and seating facilities, funded by a $17,000 grant from the federal Stronger Communities program.

Scott Morrison appeared alongside Lilli Pilli club president Greg Storey (right) in 2017. ( Supplied: Facebook/Scott Morrison )

Mr Storey is director of an online male underwear store who was picked by Mr Morrison for a government board role when the now-Prime Minister was treasurer in 2018.

His five-year role with the Payments System Board required him to attend four meetings last year. He will be paid more than $300,000 over five years.

Mr Storey told AM the club did everything by the book in applying for money to help upgrade its change rooms to better support female players.

"We want to be able to attract and retain girls to play soccer, so we applied for the grant," Mr Storey said.

"We had absolutely no engagement with our local MP [Scott Morrison] through that process.

"We applied for the grant and when we completed the application we informed the local member."

Mr Morrison said when launching the clubhouse last year that he and Mr Storey had known each other since before he was an MP.

"That grants program — that we not only do here, we do all around the country — it actually isn't about sport, it's not about football," he said.

"It's about community at the end of the day, because in Australia, that's how Australians come together."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 14 seconds 1 m 14 s The Prime Minister opens the Lilli Pilli Oval Clubhouse in 2019

Lilli Pilli Football Club, one of the largest in the Sutherland Shire, is located close to Mr Morrison's home in the southern beachside suburbs of Sydney.

It has previously had an application for a turf field rejected by the local council.

In rejecting the proposal in 2016, the Sporting Facilities Development Fund Panel noted the project would have given exclusivity to one club, and would have limited wider community benefit.

The field was returfed with new irrigation in 2017.

The new clubhouse has been planned for several years.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 41 seconds 41 s The Lilli Pilli Football Club shows off its new facilities

It was funded by club fundraising, council grants and the $200,000 in federal funds. Council documents show $210,000 had been earmarked for the oval's toilet upgrade.

According to the club, "over half a million dollars of accumulated community funds" were invested into the project.

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Speaking earlier on Monday, Mr Morrison said: "We had local sports clubs raising money for a decade and these grants came in and made these projects a reality on the ground, now people are going to argue the toss about this one versus that one."

"But money's finite and it can only go to so many projects."

Mr Morrison has rejected calls for Senator McKenzie, who oversaw the program, to resign, and has maintained that all projects were eligible.

Editor's note (28/01/2019): This story has been edited to include responses from the Lilli Pilli Soccer Club and the Prime Minister, and to remove references to a Facebook post inaccurately suggesting the club may have had prior knowledge of the Sport Australia funding.