Mr Morrison on Wednesday referred Senator McKenzie's decision to award a $36,000 grant to a shooting club she was a member of to Prime Minister and Cabinet secretary Philip Gaetjens.

It has also been revealed Mr Gaetjens was last Friday asked to investigate the former sports minister's conduct after a scathing auditor-general's report into a $100 million grant program.

The auditor-general found most of the cash for sporting clubs was splashed in marginal seats before last year's federal election.

The damning report found Senator McKenzie ignored Sport Australia's advice on which organisations should get grants, with 73 per cent of the projects not recommended by the agency.

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.

The pressure on Senator McKenzie intensified on Wednesday after it emerged she awarded a $36,000 grant to a Victorian shooting club she is a member of in February

Senator McKenzie failed to disclose she was a member of the club when her register of interests was last updated on November 21.

A spokeswoman for Senator McKenzie said the Wangaratta Clay Target Club membership was a gift worth less than $300, making a declaration to the Senate unnecessary.

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

Opposition Leader Anthony Albanese ramped up calls for the minister to be dumped.

"This is a rort. Bridget McKenzie must resign - and if she won't, Scott Morrison must sack her," he said.

But Attorney-General Christian Porter, who is looking at legal questions raised by the auditor-general, defended having ministerial oversight on grant programs.

"What I fundamentally don't accept is that ministers should not be involved in final approval for projects. That's their job," he told 6PR radio.

He said his Perth electorate, which was a marginal seat before the election, received three grants under the scheme.

Health Minister Greg Hunt was unable to explain why a pony club in his electorate needed a $30,000 grant two years after receiving $8000.

A video on social media also shows a yacht club member in his electorate thanking Mr Hunt after the organisation received more than $170,000 through the scheme.

"Thanks Sports Australia and your office in particular because I know there's been a little bit of work behind-the-scenes on your behalf to support our club and thank you very much for that," a club member said to Mr Hunt.

The minister made no apology for "advocating for projects" in his electorate and said there was no reason for Senator McKenzie to resign.

Australian Associated Press