The process was described as "problematic" by a senior member of the Bureau of Meteorology.

The Coalition government's Drought Communities Program extension gave councils in eligible areas up to $1 million for drought relief projects.

To determine which areas were eligible, the Department of Infrastructure drew on Bureau of Meteorology rainfall data in the 24 months up to June 30, 2019, as well as other economic and industry data like the percentage of the workforce employed in agriculture, forestry or fisheries.

But farmers in the Moyne Shire in Victoria were left scratching their heads, after $1 million in drought funding was announced for the region in the middle of a good season.

"I'm looking at grey skies, wet grass and plenty of feed," veteran Councillor Jim Doukas told the Warrnambool Standard.

Councillors initially speculated Moyne had been mixed up with Moira, in north-eastern Victoria.

The Coalition government had insisted the area did qualify, due to a Bureau of Meteorology map which showed 60 per cent of the shire was in drought.

However the government later admitted the Infrastructure Department had used the wrong weather data, which triggered a review of the whole process.

But emails released under freedom of information show the Bureau of Meteorology also had concerns about the criteria the Infrastructure Department was using.

After Moyne Council questioned the grant, the Bureau of Meteorology's public affairs director emailed officials in the Environment and Agriculture Departments advising them of questions from journalists about the rainfall data.

"As per the bureau's rainfall deficiency information, Moyne Shire Council has not experienced serious rainfall deficiency during the past two years," the email sent on September 30 said.

Nevertheless, the BOM declined all media requests and directed journalists to the publicly available rainfall data on its website.

But the Infrastructure Department's Regional Development and Local Government Division executive director Diana Hallam was "concerned" about the statement that there had been no rain shortfall in Moyne.

"I have been reviewing the 12-monthly rainfall deciles for Victoria overnight on the bureau's website and can see that large areas of Moyne has very much been below average rainfall, or have indeed experienced periods of serious rainfall deficiency during the past two years," she wrote.

"Can I clarify that you mean Moyne has not experienced serious rainfall deficiency when the bureau data has been processed on the basis of the Department of Agriculture's definition (12 consecutive months) but if the data was processed on the basis of the Department of Infrastructure's DCP definition (any 12 months in 24) you would get a different result?"

Bureau of Meteorology's general manager of community forecasts Peter Stone said he was not convinced that the infrastructure analysis was correct, even when using the infrastructure criteria.

Dr Stone said only eight of the past 24 months in Moyne had below average rainfall.

In only four of those eight months was the rainfall "substantially" in the lowest 10 per cent for that month.

"For this reason I'm sceptical that 12 months (even non-consecutive) fell within the lowest rain decile," Dr Stone said.

"I retain the view that the criteria that have been used by infrastructure are problematic. It is feasible for a few very poor months (occurring in usually high rainfall months) to suggest that an area is 'in drought' even if rainfall in the following 20+ months is average to favourable."

A spokesperson from the Department of Infrastructure said there had been an internal review of the process leading up to Moyne Shire being given drought funding.

Ernst and Young had also been brought on to independently review the effectiveness of the program, to the tune of $327,965.

"It should be noted that there is no formal Australian government definition of drought, and the government does not make drought declaration," the spokesperson said.

"Programs such as the Drought Communities Program extension are assessed according to their objectives so that they can assist regional communities in-need."