Labor has accused Scott Morrison of being “up to his neck” in the sports grants controversy after fresh revelations of deliberate government funding to projects in marginal and target seats.

Bridget McKenzie directly pitched to Morrison on 28 November 2018 to expand the community sport infrastructure grant program from $30m to $100m, according to evidence obtained by the Senate inquiry from the Australian National Audit Office on Wednesday.

Before the meeting, McKenzie’s office sent the prime minister’s office indicative lists of projects that could be funded under an expanded program.

Central to McKenzie’s pitch was the potential to fund more projects in marginal and target seats. In fact, McKenzie’s staff drafted talking points that noted 109 more projects in marginal and target seats could be funded.

On Thursday, the former sports minister defended her conduct, saying the memo “was never provided to me or seen by me” and was not the basis of her decisions.

In further developments, Centre Alliance MP Rebekha Sharkie obtained information – after lodging questions in February – revealing that McKenzie’s intervention in her seat of Mayo killed off 16 projects recommended by Sport Australia.

It was a novelty cheque to the Yankalilla bowls club in Mayo that sparked Labor’s referral of the grant program to the ANAO, but a supreme irony that the bowls club was actually recommended for a grant by Sport Australia..

In Mayo – which Sharkie held on a 7.5% two-party margin after defeating Georgina Downer in the 2018 byelection – seven clubs received grants, six recommended by Sport Australia and one it did not recommend that was saved by McKenzie’s intervention.

Some 41 clubs were unsuccessful, including 25 that were rejected by Sport Australia and 16 that were recommended but did not get grants.

Sharkie told Guardian Australia that “competitive grant schemes should be just that – merit-based and transparent – and it’s obvious this program did not meet those fundamental criteria”.

“The clubs in my community who put in hours of volunteer work in the mistaken belief they would be considered on their merits, and who ultimately missed out, were justifiably angry, and I don’t blame them,” she said.

Morrison has always claimed the former sport minister was solely responsible for the $100m of grants, despite 136 emails between his and McKenzie’s offices about the program. Fifteen of those emails included attached lists of intended recipients and a flurry of late changes made with input from Morrison’s office after McKenzie signed the final brief on 4 April 2019.

On Wednesday, ANAO officials said they had never seen such a level of interaction between a minister’s office and the prime minister’s office in a grants program. The audit concluded, however, that Morrison was not involved in the approval process, and the ultimate decisions were McKenzie’s.

ANAO officials said the first version of the spreadsheet shared with the prime minister’s office in October 2018 had been titled “copy of electorate division of applications”.

After McKenzie wrote to Morrison proposing to expand the program, her office provided an indicative list of projects that could be funded for $100m on 19 November 2018.

In a four-page document titled “TPs [talking points] for meeting with the PM [prime minister]”, McKenzie’s senior adviser set out that a $100m program could fund 109 projects in marginal and targeted electorates and 298 projects in other areas.

It noted McKenzie’s office has “spoken directly to other members and duty-senators and some crossbench on key priorities – with a priority on marginal and target seats”.

McKenzie and Morrison agreed to expand the program at the November 2018 meeting. On 4 March 2019, the prime minister’s office asked McKenzie for a list of unfunded sport grant projects and an indication of what a third round of the program would look like if approved.

In a joint statement, Labor’s shadow sports minister, Don Farrell, and committee chair, Anthony Chisholm, said the evidence proved Morrison “wasn’t just listening to Bridget McKenzie’s pork-barrelling plans” but his office was “was an active participant in the plotting”.

“The Senate committee inquiry is revealing what Scott Morrison has always been trying to hide – that he was in the sports rorts scandal up to his neck from the start,” they said.

McKenzie told reporters in Canberra that her “comprehensive submission” to the Senate inquiry had addressed the memo, citing passages claiming applications in marginal and target seats weren’t given “any precedence or special treatment”.

“This former adviser’s memo was not used as a basis for my decisions at any stage in the process,” it said. “The memo was never provided to me or seen by me.”

McKenzie did not directly respond to questions about whether she had told the prime minister how many projects in marginal seats could be funded.

“It was a highly popular program, we had applications in for $340m projects for a $30m program,” she said.

“So I’ve said many times my job was to actually fight to ensure the program got more money so we could build more community sporting infrastructure.”

In Senate question time, sports minister Richard Colbeck said it was “quite unsurprising that a minister who’s looking to promote funding into their portfolio would meet with the prime minister proposing to do exactly that”.

Colbeck said Morrison’s involvement was “as he has described” – that is, limited to passing on representations from MPs. Funding increases “were appropriately made through the [expenditure review committee] process”, he said.