Goolwa District Pony Club applied for almost $40,000 to replace an old ex-army hut with new rooms, while the Coromandel Valley Ramblers Cricket Club wanted new rooms to replace a six-by-six metre tin roof without walls.

But both South Australian clubs were snubbed, despite their high Sport Australia merit scores, with the pony club scoring 82 out of 100 and the cricketers earning 90.

Clubs that missed out in the $100 million program, which the auditor-general found favoured targeted and coalition-held seats, gave evidence to a Senate committee in Adelaide on Tuesday.

The scheme has put heavy pressure on the Morrison government, with former sport minister Bridget McKenzie forced to quit.

Many projects received high scores from the assessing agency but missed out after ministerial intervention.

"We put our heart and soul into these applications. To have it tinkered with in such a disingenuous way is just disappointing really," the pony club's president James Meyer told senators.

"Politicians might look at why we distrust them - well it's activities like this that fosters distrust."

Dr Meyer said the club was devastated to learn through media it had beaten the 74-point threshold before being overruled by the minister.

"It doesn't really matter whether the community benefits, it's whether the person handing out the money is going to benefit," he said.

The cricket club's president Matt Smith said the club had been pushing for the project for 10 years, with hundreds of hours spent on multiple grant applications.

The project also would have built new public toilets at the club's ground.

"The existing toilets are from '50s or '60s and disgusting to put it mildly. Virtually everyone refuses to use those toilets," he said.

Liberal senator Eric Abetz questioned whether the clubs were aware of a section of an application form which noted other factors could be taken into consideration.

"This was not in the small print. This was not a footnote," he said.

Emeritus law professor Geoffrey Lindell said he had serious doubts over whether the minister had the legal power to approve the grants.

He also raised legal doubts about the potential involvement of the prime minister's office or other ministerial officials making late changes to which projects got funding.

"The cloud hangs over all of them because we go back to the central starting point - the commission (Sport Australia) is the legally appointed decision maker," Professor Lindell said.

Barmera Monash Football Club former vice-president Nigel Dillon said they had scored 76 out of 100 only to miss out.

"To be blunt, we're in a safe Liberal seat here in the Riverland. It was very disappointing," Mr Dillon said.

Senator McKenzie resigned after an investigation found she failed to declare potential conflicts of interest associated with the scheme.

Australian Associated Press