NT funding under scrutiny as finance minister travels to Darwin - ABC News & Headlines – Australian Broadcasting Corporation

Katy Gallagher has raised concerns over what she says is the NT government's failure to distribute Commonwealth money where it is needed.  (ABC News: Pete Garnish)

The Northern Territory government is under scrutiny from the Commonwealth, with Finance Minister Katy Gallagher travelling to Darwin for a meeting with the acting chief minister.

Ms Gallagher says the Commonwealth has concerns about how federally-funded programs are being administered by the NT government.

Acting Chief Minister Gerard Maley says it is "a bit rich" for Ms Gallagher to "come up here and tell us what to do" and has reiterated calls for an audit of programs directly funded by the Commonwealth.

Federal Finance Minister Katy Gallagher has met with the Northern Territory's acting chief minister over concerns the NT government is not spending Commonwealth money where it is needed.

With more than 70 per cent of the NT government's revenue coming from the Commonwealth, Ms Gallagher travelled to Darwin today to take issue with how the funds were being distributed.

Ms Gallagher said she and Indigenous Australians Minister Malarndirri McCarthy had initially organised to meet with Chief Minister Lia Finocchiaro, who is now on leave, and instead met with Acting Chief Minister Gerard Maley.

"We had hoped to meet with the Chief Minister," she said.

"We made that appointment some two weeks ago and the reason behind that was we were certainly, from the Commonwealth's point of view, experiencing some concerns about how particular programs are being run."

Malarndirri McCarthy and Katy Gallagher met with Gerard Maley this week after Lia Finocchiaro went on leave. (ABC News: Pete Garnish)

Ms Gallagher pointed to areas such as disaster relief, domestic violence service provision and housing, where she believed the tough-on-crime NT government had dropped the ball.

The federal parliament heard last month that $330 million allocated under a Commonwealth housing agreement had not been spent, and the NT government was seeking to reduce its 10-year housing target from 2,700 to 1,800.

Ms Gallagher also said the federal government was concerned a lack of money hitting the ground was exacerbating social dysfunction, as the NT goes backwards on seven Closing the Gap targets — the worst performance of any jurisdiction.

A string of serious crime incidents have occurred in the territory this month, including one where two boys, aged eight and 11, allegedly held up two Darwin businesses at knifepoint while wearing balaclavas.

"The money that we are investing is to reach the outcome that we want, which is to provide better services and better supports in housing, in particular in relation to overcrowding, in domestic, family and sexual violence, to make sure the service system is able to cope with the level of violence that exists right across the country," Ms Gallagher said.

"So when we're seeing delays or reductions in the Northern Territory's own expenditure, that concerns us. 

"That was why we wanted to put it on the table — we wanted to come up to the chief minister and say 'Look, these are all of our concerns, it's across a number of portfolios'."

Ms Gallagher said if the NT government did not act, the Commonwealth would bypass it and deliver more funding directly to frontline services.

"If we are going to ... not see the money getting to where it's needed ... we would look to directly fund those organisations," she said.

Katy Gallagher says the federal government isn't afraid to pull funding from the NT government and give it directly to service providers. (ABC News: Pete Garnish)

"The Commonwealth is serious that we are not going to see our investments sit there and not get progressed.

"In housing, we want the houses built, in domestic, family and sexual violence, we want the service system supported."

Before the meeting, Mr Maley said it was "a bit rich" for Ms Gallagher to "come up here and tell us what to do".

"They need to have a good, hard look at themselves in relation to the non-government organisations they fund and the funding that they put in to the Northern Territory and where that money is spent," he said.

Gerard Maley says the federal government should look more closely at the services it funds directly. (ABC News: Pete Garnish)

"We have asked for a full audit in relation to that money many times and it has fallen on deaf ears.

The Northern Territory experienced a series of natural disasters over the most recent wet season, including Cyclone Fina and floods which caused the displacement of hundreds of people.

Ms Gallagher said the NT government still had not applied for disaster relief funding for events that occurred last year.

"What that means is those communities are still waiting for Commonwealth funds to flow under those arrangements."

But Ms Gallagher said "we made some progress in the meeting on that front".

"The Northern Territory government [is] committed to having the paperwork for various projects they want funded under that category in to the Commonwealth by Christmas, but it has taken a long time to get here," she said.

A spokesperson from the Office of the Chief Minister said the meeting was "productive" but "it was clear the federal ministers had come with closed minds and pre-prepared press lines".

"The CLP government will continue to focus on reducing crime, rebuilding the economy and restoring lifestyle and leave the carping and hand-wringing to Canberra," they said.