Scott Morrison has denied considering whether proposed sports grant projects were located in marginal or target seats at a meeting with Bridget McKenzie in November 2018 that resulted in a $70m expansion to the program.

In answers to Guardian Australia, the prime minister’s office has addressed new evidence from the Australian National Audit Office about its involvement in the controversial program.

The answers do not dispute that the prime minister’s office received lists of the marginal and target status of seats where prospective projects were located but denied that this determined the decision to expand it, which was done to “meet demand”.

The answers also reveal the government is leaving open the possibility it could fund a further round of grants in the October budget for clubs that missed out due to McKenzie’s intervention.

Last Wednesday, Australian National Audit Office officials revealed that the former sports minister’s senior adviser had drawn up talking points for a meeting between McKenzie and Morrison, asking to expand the sports grant program to $100m on the basis it could fund 109 more projects in target and marginal seats, and noting that these were a “priority” in consultations with MPs.

Over the life of the community sport infrastructure grant program, the prime minister’s office received 15 emails with spreadsheets showing indicative lists of projects to be funded.

ANAO officials said the first of these on 18 October 2018 – one day after McKenzie first requested Morrison expand the program – had been titled “copy of electorate division of applications”.

Asked if Morrison denies considering the marginal or target status of seats when he and McKenzie met on 28 November 2018, a spokesperson for the prime minister replied: “Yes.”

The spokesperson quoted McKenzie’s written submission to the Senate inquiry that: “This former adviser’s memo was not used as a basis for my decisions at any stage in the process. The memo was never provided to me or seen by me.”

Asked why indicative project lists included the marginal and target status of seats, the spokesperson said the CSIG program had received more than 2,050 applications totalling nearly $400m, for a program worth $30m at the time.

“Quite clearly the former minister wanted to lobby for further funding for a program within her portfolio – that’s what ministers do.”

Asked why on 4 March, 2019 the prime minister’s office asked McKenzie for a list of unfunded sports grant projects and an indication of what a third round of the program would look like if approved, the PMO replied it was “not unusual” to request more information when developing policy priorities or when extensions to program funding are sought.

“As has been highlighted previously, the prime minister’s office also works with ministerial offices to coordinate timings of program announcements.”

The prime minister’s spokesperson cited the findings of the secretary of the department of the prime minister and cabinet, Phil Gaetjens, that “the minister did not take political factors as a primary consideration in her decisions”.

“[The CSIG] was extended to help meet demand,” the spokesperson said.

In January, a scathing auditor general’s report found McKenzie had skewed the community sport infrastructure grant program towards key marginal seats by running a parallel approval process, overturning Sports Australia’s recommendations.

But in his report released in February, Gaetjens found the separate funding approval process conducted in the minister’s office was not “unduly influenced by reference to marginal or targeted electorates”.

McKenzie denies any wrongdoing, claiming in her written submission that electorates were used to check there was a geographical spread of projects and that applications in marginal and target seats weren’t given “any precedence or special treatment”.

In January, Morrison said he would “work with the treasurer to see how we can better support even more projects in the future” – opening the possibility that unsuccessful applicants could be given grants in a fourth round.

His spokesperson said: “These matters are still under consideration by the government.”

The Beechworth tennis club, represented by Maurice Blackburn, has challenged the legality of the CSIG program in the federal court.