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Senator Bridget McKenzie was criticised in the report for her role in a process where $100 million of funds were distributed to sports clubs around the country.Credit:Alex Ellinghausen

The report found Senator McKenzie,the former sports minister,had breached ministerial standards by failing to declare she was a member of the Wangaratta Clay Target Club before awarding it $36,000 for a new toilet block under the grants program in February 2019.

In a statement,Senator McKenzie said she had always taken her role as a minister"very seriously"and she understood the community expected parliamentarians to abide by the highest standards.

She said she accepted the Prime Minister and Cabinet report and maintained that"at no time did my membership of shooting sports clubs influence my decision making".

"However,I acknowledge that my failure to declare my memberships in a timely manner constituted a breach of the Prime Minister’s Ministerial Standards,"Senator McKenzie said.

"Elected representatives are responsible for public expenditure and take advice,not direction,from the public service and others. The operation of ministerial discretion is important to our democratic process."

Senator McKenzie said she had been"humbled and heartened"to be given the opportunity to serve in two governments as a minister.

"The importance of having a strong National Party voice in cabinet ensures that regional Australians are not left behind. For a century,the Nationals have unashamedly championed the interests of Australian agriculture."

The review found Senator McKenzie had not breached any other ministerial standards during the decision-making process despite a damning audit of the scheme released last month.

Mr Morrison said standards were"about accountability".

"What has been identified here through this process has been a lack of transparency and a lack of detail on the processes used by the minister and exercising discretion,"Mr Morrison said.

"Minister McKenzie has shown a great respect for the statement of standards. She has honoured those,that statement of standards and the decision that she has taken today by offering her resignation to me this afternoon."

Mr Morrison referred Senator McKenzie's alleged misuse of a $100 million sports grant program to department secretary Phil Gaetjens to investigate,following a damning report from the Australian National Audit Office and a string of revelations in the media.

She had visited the club a month earlier,her"second visit in months"according to the club website,and been gifted membership for 2019.

Senator McKenzie had dug in since the Auditor-General's report into her administration of the program and previously refused to resign despite causing two weeks of severe political damage to the Coalition.

Treasurer Josh Frydenberg conceded on Sunday morning that voters wanted"more accountability,more transparency,more explanation of reasons"in funding decisions.

The review found the former sports minister had ignored without apparent legal authority before last year's federal election recommendations by government agency Sport Australia on which applications to approve,favouring marginal and targeted seats.

"What they would appreciate I think is more transparency and accountability following up the recommendations of the Auditor-General's report,and as I've said,we've accepted those
recommendations,"Mr Frydenberg told the ABC.

He would not speculate on a replacement for Senator McKenzie as Nationals deputy leader,saying that as a Liberal MP it would be"a bit like asking a Rabbi to be in the conclave choosing the Pope".

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