An audit has found the $444 million grant made to the Great Barrier Reef Foundation didn't come with enough detail about what it should be used to achieve.
The Great Barrier Reef Foundation received a controversial $444 million grant without clear assessment criteria that would determine whether it represented value for money, the auditor-general has found.
But all decisions that led to the grant being awarded were informed by advice from the Department of Environment and Energy, according to a report released by the Australian National Audit Office on Wednesday.
The independent Great Barrier Reef Foundation was paid the grant in a lump-sum by the federal government last year without soliciting it or going through a competitive tender process.
The funding has been highly criticised by Labor as lacking proper process.
Prime Minister Scott Morrison - who was treasurer when the money changed hands - took responsibility for the decision, saying it made "good common sense" to make the investment in one hit.
The audit office - which investigated the grant at the request of the government - says advice from the environment department informed all decisions made regarding the funding.
But it found the department identified the foundation as the "obvious" choice for the grant and only formally considered the Queensland government as an alternative.
It didn't undertake a competitive process because it didn't have time, the department told the auditor-general.
The grant was paired with a set of guidelines, as per commonwealth grant rules.
The audit office says the guidelines included "relevant and appropriate eligibility requirements" for the money.
But they had "two key shortcomings", being the level of detail provided on desired outcomes for the program and a lack of clear assessment criteria.
"The approach taken in the guidelines for this $443.3 million partnership grant did not enable an appropriate assessment of whether a partnership proposal represented value for money," the report states.
Environment Minister Melissa Price says none of the findings affect the conclusion that the government's partnership with the foundation is an effective way to boost the health of the reef.
"This is an investment we are immensely proud of; long-term funding to address the most urgent threats to the reef and to help manage further protection initiatives," she said in a statement on Wednesday.
But Labor environment spokesman Tony Burke said it showed the government is "reckless with other people's money".
"It's clear from this report the Great Barrier Reef Foundation should not have been given this money," he said.
If elected Labor will be demanding all remaining funds and interest are returned in accordance with the contract.