The commonwealth agency responsible for uncovering sports rorts and the massive overspend on land at Western Sydney airport will be forced to cut the number of its audits without a budget rescue package, according to its own annual report.

The Australian National Audit Office fell six performance audits short of its target this year due to budget constraints, and the auditor general, Grant Hehir, has written to the prime minister, Scott Morrison, saying it needs a funding boost or will be forced to cut back further.

The independent senator Rex Patrick and Labor MP Julian Hill, the deputy chair of the joint committee of public accounts and audit, have both warned that without intervention, scrutiny of the government will continue to fall.

In 2019-20, the ANAO delivered 42 performance audits, short of its 48 target.

The audits revealed, among other issues, that the office of the former sport minister Bridget McKenzie had skewed the $100m community sport infrastructure grant program towards marginal seats. Another report revealed the federal government paid a Liberal donor $30m for land adjacent to Western Sydney airport – 10 times its fair price.

In a preview of its work in 2020-21, the ANAO has proposed more than 50 potential audits on topics including the jobkeeper wage subsidy, Covidsafe app, the joint strike fighters’ capability, the Coalition’s electricity underwriting scheme, the Building Better Regions fund, and the National Covid-19 Commission.

The ANAO also has scope to initiate audits after referrals, such as Labor’s Murray Watt’s request to investigate a $23m taxpayer-funded grant cheque given by Pauline Hanson to the Rocky Sports Club to build a stadium.

In its annual report, the ANAO said it had recorded a deficit of $3.1m in 2019-20, due to “our transition to a lower funding base”. The ANAO’s total revenue from the government fell from $70m in 2019 to $69.2m in 2020.

The ANAO said it had fallen short of its target for audits due to “budget constraints”, which would continue to reduce the ANAO’s capacity to deliver performance audits into the future, as well as Covid-19 and other new duties.

“Without supplementary appropriations, the number of performance audits tabled in the parliament will continue to reduce,” Hehir wrote.

“I have written to the prime minister to propose that the ANAO’s funding is put on a more sustainable basis to meet both mandated financial statements audits and the suite of performance and other reports which are provided to parliament to achieve transparency and accountability in the Australian government sector.”

Patrick said he was worried the government would “quietly starve” the audit office of funds after recent reports “caused great discomfort”.

“The auditor general is one of the last bastions of frank and fearless analysis and advice within the public service – he calls things exactly as he sees them,” the senator said.

In a letter to Morrison, Patrick “expressed support for the auditor general’s submission”, signalling that he had requested a budget sufficient to conduct the full 48 performance audits.

Patrick told Guardian Australia funding must be restored to that level and anything less would be seen as “silencing the auditor general”.

Hill said “it’s clear now that the auditor general’s budget has been cut over a number of years and is now in serious trouble”.

“Without extra funding in next week’s budget, the number of performance audits and level of scrutiny he applies to government will fall rapidly in coming years,” Hill told Guardian Australia.

“This means scandals like sports rorts, dodgy airport land deals and multibillion defence blowouts may never come to light. Less scrutiny may be convenient for Scott Morrison, but weakens our democracy and independent scrutiny of government.

“The government must provide the funding requested by the ANAO in next week’s budget.”

Patrick has also written to the audit committee chair, Lucy Wicks, calling on her to “openly advocate” for restoration of funds to the ANAO.