Projects including the Bacchus Marsh Little Athletics club upgrade to its change rooms and toilets, Hepburn Shire's planned upgrade to the pavilion at Laurie Sullivan Reserve and Victoria Bowling Club plans for the installation of lighting, installation of a solar system and an extension of the clubhouse decking were all rejected.

However, two Ballarat projects were successful including $500,000 for upgrades to Russell Square's changerooms and $106,800 for Webconna Bowls Club in Wendouree.

It comes as Auditor General Grant Hehir released a damning report saying there was evidence to suggest 'pork-barreling' played a key role in which clubs and organisations would receive funding.

The report states that "the successful applications were not those that had been assessed as the most meritorious in terms of the published program guidelines". It directly implicates the then Federal Sports Minister Bridget McKenzie's office as signing off on who would receive grants.

"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 report said.

"Applications from projects located in those electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines.

Victoria Bowling Club president Barry Clark said his club had applied for $70,000 of funding under the scheme, having already raised $43,000 for the $113,000 project.

He said while he understood not all clubs could be successful, he added that transparency in the process would have helped the club understand why it was not successful.

He said he was disappointed to know that there was a suspicion that grants were chosen based on where marginal seats were.

"We've received great support from the city council who helped pay for our synthetic green, the State Government has been outstanding, but we do lack federal funding and it seems to be the case for a lot of organisations in Ballarat," Mr Clark said.

The report found that Sport Australia's assessment of applications was largely in accordance with the published program guidelines, "but in parallel, the minister's office had commenced its own assessment process to identify which applications should be awarded funding. The minister's office drew upon considerations other than those identified in the program guidelines, such as the location of projects, and also applied considerations that were inconsistent with the published guidelines."

Ballarat MP Catherine King said sporting clubs deserved better.

"The Community Sports Infrastructure Program was designed to provide much needed funds to local sporting groups - not to help Liberal candidates be elected," she said.

"Ballarat has already seen a lack of investment from the Morrison Government, and now we find out that our local sporting clubs weren't even competing on a level playing field.

"We had many worthy projects across our region that put themselves forward for funding, and now we don't know if they missed out to better projects or if they just missed out to worse projects in Liberal target seats.

"Our local sporting groups deserve better."

Rejecting Labor calls for her resignation, Senator McKenzie told media that "no rules were broken" in the delegating of funding across the three rounds it was open.

"Every single one of those 684 projects that were funded was eligible for funding under the guidelines," she said.

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