Former NSW deputy premier John Barilaro’s office effectively excluded Labor electorates from urgent bushfire recovery funding in an “inconsistent and poorly documented” Black Summer grants program.

A report by the NSW Auditor-General revealed although there was no designated role for the then National Party leader in the grants program, his office implemented a $1 million threshold for bushfire recovery projects, denying anything less than that amount.

The Department of Regional NSW gave the then deputy premier’s office a list of 35 projects to be funded in a fast-tracked first round in 2020, listing their electorates, but the threshold ruled out projects in areas held by the Labor Party, the audit found.

The report said it was unclear why the department listed the electorates as they did not form part of the selection process and that Mr Barilaro’s office’s role in implementing a threshold “deviated from the guidelines”.

The $541.8 million Bushfire Local Economic Recovery program was jointly funded by the state and federal governments and administered by NSW to pay for projects in bushfire-ravaged communities to help create jobs and protect against future disasters.

The report, tabled in NSW parliament on Thursday, described the fast-tracked first round of the economic recovery program as having “significant gaps”.

“The administration process lacked integrity, given it did not have sufficiently detailed guidelines, and the assessment process for projects lacked transparency and consistency,” it said.

The report noted most of the worst-affected regions were held by coalition MPs but badly-ravaged areas including the Blue Mountains and Tenterfield were among those excluded.

The department told the auditor-general’s office projects in some of those rejected regions were funded either in later rounds of the economic recovery program or by the Commonwealth.

“It is also noted that the overwhelming majority of bushfire impact was in government-held electorates and therefore the majority of funding in early fast-tracked rounds would flow to those communities,” department secretary Rebecca Fox told the auditor-general.

Mr Barilaro denied pork barrelling over the grants at a 2021 parliamentary inquiry into the integrity of the program. He said the first round focused on destroyed buildings, 90 per cent of which were in Coalition seats.

Premier Dominic Perrottet said he would consider possible improvements after the report but denied the program was the subject of pork barrelling.

“I know from my time as premier dealing with the flood response, we’ve ensured that every community across NSW got back on their feet as quickly as possible,” he said.

“That’s been my focus – and previously during the bushfires – was to allocate as much funds as possible to provide assistance.”

The report recommended the department establish stronger guidelines, including clear assessment criteria.

Treasurer Matt Kean said he had established a strong governance model.

“The public can have confidence that taxpayers’ money is going to its intended purpose,” he said.

The report said other rounds of bushfire grants largely aligned with guidelines and were supported by documentation but could have been strengthened by more detail on cost-benefit analysis.