Bushfire-affected East Gippsland communities have launched an official complaint over a rejected grants application to upgrade their recreation reserve.
The Sarsfield Community Association has received legal advice that the rejection may have gone against the National Resilience and Recovery Agency's guidelines
The community hall and recreation reserve was a refuge for the 2019-20 bushfires, but the application to upgrade it was rejected due to a technicality over their ABN, which identified them as a state run entity.
Sarsfield Community Association group president Simon Hof said their advice showed that their applications should have been assessed properly.
"When we asked for feedback, the NRRA simply said that we weren't eligible because of the ABN of our hall committee," Mr Hof said.
He said the same situation has affected the bushfire-impacted towns of Ensay and Wairewa, who will also be attached to the action.
Mr Hof said guidelines were followed to the letter when applying and believed that the ABN technicality meant the applications weren't even read, which he said was a "kick in the teeth".
"We were assisted by professional grant writers, and Ensay's application was also prepared by professional grant writers," he said.
"Even those companies, who are experienced in reading guidelines like these, are clear that we are eligible to apply and have our application assessed for funding."
Local Ensay resident Kym Skews, who is a representative of the Activating Ensay group, said she was encouraged by the legal advice.
"My understanding is that one of the clauses explains that if you're an incorporated not for profit organisation, you're eligible," Ms Skews said.
"If you have a ABN which is registered as a state government entity, you're not eligible unless you fall into the first category, which is what we fall into."
But she didn't think the NRRA will revisit the applications and that the rebuilding of their relief centre will wait a little longer.
"I'm not confident that they will reopen the black summer grant and reconsider applications based on those guidelines," she said.
While Ms Skews said she was happy other surrounding communities were successful in their grant funding, she said the competitive grant process was sometimes too bureaucratic for non-for-profit community entities.
"I think the competitive grant process where you are required to complete these extensive applications is very difficult for small communities," she said.
"We were able to complete the application because we had the help of a consultant provided by Bushfire Recovery Victoria.
"If you're an eligible, non government not for profit committee of management, made up of volunteers, you shouldn't actually have to jump through all those hoops where you actually require a consultant to complete a satisfactory application."