The government has continued to claim public interest immunity over the report by top bureaucrat Phil Gaetjens, with the decision labelled a blow for transparency and for the public service.
Leader of the government in the Senate Matthias Cormann said the report was cabinet in confidence, and that to make it public would reveal and harm cabinet deliberations.
The report, prepared by Mr Gaetjens as secretary of the Department of Prime Minister and Cabinet, found that Bridget McKenzie had breached the ministerial code of conduct by failing to declare a conflict of interest after a grant was awarded to a shooting club of which she was a member.
While the document hasn't been released, Prime Minister Scott Morrison has said the report didn't find anything wrong with the awarding of grants under the $100 million program, despite the Auditor General's finding that grants were doled out according to which seat they were in.
The Senate had voted to compel the government to table the document, but Minister Cormann said its contents must remain under wraps.
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Labor senator Katy Gallagher argued the document should not be considered cabinet in confidence as it wouldn't reveal cabinet deliberations.
"Without the full release of this report it is impossible to understand just how the nation's most senior public servant could form the complete opposite view to that of the independent Auditor General," Senator Gallagher said.
"Instead of owning up to the sports rorts saga, the Prime Minister is trashing the public service in the process."
Senator Gallagher, who is Labor's spokeswoman on the public service, said Mr Morrison had "attacked the role of the APS to conduct merit-based assessments of grant applications".
Independent Senator Jacqui Lambie said the failure to release the document was shameful.
"This is why there is no trust from the Australian people," Senator Lambie said in an impassioned speech.
"Does [the Prime Minister] take millions of Australians out there for absolute morons?"
Senator Lambie used her response to call for an independent anti-corruption commission with the power to investigate such matters.
"[Senator McKenzie's] behaviour was disgraceful, and that by pinning her resignation on a conflict of interest, the government is trying to pretend that using taxpayers' money to bolster their re-election campaign is acceptable behaviour."
"Instead of putting our trust in the Auditor General, the PM is asking us to believe a PM and C review into whether Senator McKenzie breached ministerial standards."
Senator Lambie said Mr Gaetjens should be an objective observer, but his history as the Prime Minister's former chief of staff meant he also had a conflict of interest.
Mr Gaetjens has told the Prime Minister he intends to make a public statement on his report and he is expected to be asked to front up to a Senate select committee into the saga.