Shadow attorney-general Mark Dreyfus has asked the Auditor-General to investigate a $2 million federal grant to a trades training school associated with former senator Bob Day.
The request was made as the Senate on Monday referred the 2016 re-election of the former Family First senator to the High Court to determine whether an apparent financial interest in the building that housed his Adelaide electorate office should have disqualified him from standing.
The referral passed with the support of the opposition as Finance Minister Mathias Cormann was forced to answer questions about his role in the lease affair during his six-month stint as special minister of state until July.
As revealed by Fairfax Media last week, the government handed a $1.84 million grant to North East Vocational College in suburban Adelaide after Mr Day lobbied a number of ministers for the cash to fund his pet project, "student builders".
"I ask you to please urgently investigate this expenditure of a significant sum of public funds and determine whether the $1.84 million grant to the North East Vocational College represented value for money for the Australian taxpayer," Mr Dreyfus said in a two-page letter.
"I also ask that you urgently investigate the process by which this grant was awarded and what involvement the Prime Minister, Minister [Simon] Birmingham or their offices had in the making of this decision. In my view, this sizeable grant was not justified by any merits-based decision-making process."
A spokesman from the Auditor-General responded on Monday, saying: "The Auditor-General has received Mr Dreyfus' letter and it is under consideration."
The one-off grant is more than the annual revenue of North East Vocational College, an institution with seven classrooms, and represented $90,000 for each of the 20 builder's apprentices who will take part in the student builders trial.
The program was designed by Mr Day – whose building business has collapsed, leaving 200 families in the lurch – to shift the financial burden of apprentices from the construction sector to the tertiary education budget.
Questions have been raised about the process that led to Mr Day and two other industry bodies – Master Builders Australia and the National Electricians and Communications Association – each being awarded $1.84 million.
Those three groups were the only ones allowed to brief a special apprenticeship review group established by Mr Birmingham in 2015 during his time as assistant minister responsible for vocational education and training.
The advisory group, led by Liberal MP Craig Laundy, made no specific recommendations in favour of Mr Day's pilot, but its generalised findings were used to justify the controversial grant.
Labor senator Doug Cameron has accused Mr Birmingham of being engaged in a "cover-up" after the minister told a Senate estimates hearing that he was only aware that Mr Day "knew" of North East Vocational rather than having a direct role in it.
On Monday, it emerged that Mr Day had claimed in a letter to Senator Cormann earlier in the year that he had been paying rent on the Adelaide electorate office, having sold the premises to an associate for $2.1 million.
But Mr Day, who went as guarantor on the loan that facilitated the sale, could not provide any evidence that rent was paid, according to Senator Cormann.
During Senate question time, Senator Cormann came under pressure to justify the actions he took in relation to the lease, conceding that he knew before the July 2 election that the nominated bank account for rent at the office appeared to still be linked to Mr Day.
"At no stage did I ever receive any advice from the Department of Finance that the lease signed on 1 December in itself, or in the absence of rental payments, could cause a potential breach of section 44 of the constitution," he said.
Prime Minister Malcolm Turnbull defended the government's handling of the Day matter.
"I'm satisfied that my government has conducted itself with respect to this matter with great diligence and great integrity and great thoroughness," he said.