Embattled Nationals Deputy Leader Bridget McKenzie was reportedly warned a controversial sports grants scheme was being compromised by political interference.
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The former sports minister is under pressure for politicising a $100 million grants program which favoured marginal and targeted seats before last year's federal election.
The ABC on Tuesday reported Sport Australia told Senator McKenzie's office in March last year, two months before the election, the agency's independence was at risk.
It's the latest damaging revelation after a damning auditor-general's report found many of Sport Australia's recommended projects were rejected by the minister.
In the third round of the program, 73 per cent of projects given funding were not recommended by the agency.
Department of Prime Minister and Cabinet secretary Philip Gaetjens is investigating the scheme to see if ministerial rules were broken.
He's also scrutinising a $36,000 grant Senator McKenzie awarded to a Victorian shooting club to which she belonged.
Scott Morrison said he didn't have advice on whether Sport Australia expressed concern to the government about the scheme.
Asked if he supported Senator McKenzie remaining in his cabinet, the prime minister said: "Well, we have a process which I'm following and she remains in the cabinet."
"I initiated that process well over a week ago now and I'll wait to receive the report."
Mr Morrison said Mr Gaetjens was yet to provide advice on the issue despite speculation his report would be delivered last weekend.
Tuesday was the first meeting of the drought and flood advisory board of the National Drought and North Queensland Flood Response and Recovery Agency.
Senator McKenzie, who is now the agriculture minister, did not attend.
Mr Morrison defended her absence from the meeting and a subsequent drought announcement in regional NSW.
He said Drought Minister David Littleproud and Education Minister Dan Tehan were responsible for the two programs which will get extra funding.
Labor's agriculture spokesman Joel Fitzgibbon said Senator McKenzie was "missing in action" and should explain her absence.
"The sports-rorts controversy has sent the minister into hiding at a crucial time for our farmers," he said.
"The prime minister must act to replace her with someone capable of representing our farmers in the cabinet and willing and able to speak out on agriculture issues."
Australian Associated Press
