A large fund for road projects will be scrutinised as more money is tipped into upgrades in a region approaching a crucial by-election.
The NSW government's $334 million Regional Roads Fund - some of which has not yet been allocated - will be examined by the state's auditor-general's office.
It is assessing whether Transport for NSW designed and implemented the grants program in compliance with guidelines around the administration of public expenditure and relevant legislative requirements, focusing on grants to 19 local councils.
Roads Minister Jenny Aitchison said it was a standard investigation selected for audit as part of a continuing focus on the administration of grants.
She said the audit office's ongoing interest stemmed from the previous government's method of funding, which included allegations of pork-barrelling.
"The whole purpose of the Regional Roads Fund was to catch up on things that had not been completed," she told a budget estimates hearing on Tuesday.
One project - the Thornton Bridge duplication project - is near the minister's home in the Hunter region's Maitland electorate.
She denied any conflict of interest.
"There are 20,000 or 30,000 more other people who live in that area," Ms Aitchison said.
"That road is of no material benefit to me or my family."
The project received an additional $35 million allocation in the June state budget, on top of $15 million promised before the 2023 election, after Transport for NSW advised it may cost up to $50 million.
A business case was expected to be completed in February, Ms Aitchison said.
Opposition roads spokesman Dave Layzell called the program a "slush fund".
"It never sat right with me that successful projects required no business case and had no transparency," he said.
"It's in everyone's best interest that it's being investigated by the auditor-general."
Ms Aitchison faced budget estimates while Premier Chris Minns was announcing an additional $20 million for a road bypassing the main street in Albion Park on NSW's south coast.
"Six thousand additional homes have been added to this community in a very short space of time without anywhere near enough infrastructure spend from the state government," Mr Minns said on Tuesday.
The road is located in the Kiama electorate, where voters will elect a replacement for jailed former independent MP Gareth Ward on September 13.
He resigned as the parliament was preparing to vote on his expulsion from parliament earlier in August after being convicted of sexual and indecent assault.
Ms Aitchison said the funding had been announced because of "critical timing" for the local council delivering the project.
"They were getting to the point that they needed to know about the money before they went forward," she said.
