The Health department warned Sport Australia about the risk of breaching caretaker convention by administering grants sent over after the 2019 election was called.
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It was also revealed Sport Minister Richard Colbeck met with advisers from Prime Minister Scott Morrison's office and was provided talking points, ahead of the minister and agency's appearance before Senate estimates on Wednesday.
The committee heard Sport Australia asked for advice from the Health department late in the afternoon of April 11, 2019 about a list of $39 million of community sporting infrastructure grants former sport minister Bridget McKenzie's office sent over that day.
The first email, sent at 8.46am, included one project that had been removed, and another added at the request of the Prime Minister's office.
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A second email, sent at 12.43pm, had another project removed and nine projects added.
The changes added an extra $2.7 million worth of grants to the third round of the program, the committee was told on Wednesday.
Sport Australia was told the changes were due to an error in the original spreadsheet, it was told. Similar changes had been made in the first round of the program, the agency said.
However, on April 11 the election had been called and the government went into caretaker mode at 8.30am.
Sport Australia's acting chief executive Robert Dalton said the advice was "basically to consider our actions in the context of the caretaker conventions in so far as they relate to major government decisions and not binding future government".
"We took that into consideration and acted accordingly," Mr Dalton said.
Was any concern raised about the additional projects to fund, given caretaker period had started, Labor senator Katy Gallagher asked.
"No, senator," Mr Dalton replied.
It also emerged Senator Colbeck met with two advisers from the Prime Minister's office around 6pm on Tuesday, including his sport adviser.
Greens senator Janet Rice asked whether he'd been given any talking points during the meeting.
"Nothing I didn't already have," Senator Colbeck said.
He resisted a request to table the points, describing it as "frankly unreasonable".
Senator Colbeck also insisted Sport Australia did not mislead Senate, when it failed to mention the second email during its appearance before a separate Senate inquiry last week.
Sport Australia chief operating officer Luke McCann admitted the agency should have taken the question on notice instead of answering there and then, and done a more thorough search.
However Senator Colbeck said the omission amounted to a "difference in evidence" that had to be corrected, rather than misleading the Senate.
