A Northern Territory consulting company that employs Country Liberal Party president Ron Kelly was awarded more than $1.4 million through federal grants intended to tackle Indigenous disadvantage.

Key points: North Australian Remote Management Consultants received more than $1.4 million of Indigenous grant funding

North Australian Remote Management Consultants received more than $1.4 million of Indigenous grant funding The company was founded by a longstanding CLP member and employs its current president

The company was founded by a longstanding CLP member and employs its current president NARMCO "supporting regional and remote people", company says

North Australian Remote Management Consultants (NARMCO) was given the money by Indigenous Affairs Minister Nigel Scullion over a three-year period through the Indigenous Advancement Strategy and the Aboriginal Benefits Account.

The Indigenous Advancement Strategy is a $4.9 billion federal fund that was designed "to improve the way that the Government does business with Aboriginal and Torres Strait Islander people to ensure funding actually achieves outcomes".

NARMCO is not an Aboriginal-owned company, but has previously said it works with Indigenous companies.

It is unclear how the award of funds achieves the stated aims of the IAS fund.

Mr Scullion has recently faced criticism for his allocation of IAS funds, with Indigenous groups calling for an investigation into the awarding of hundreds of thousands worth of Indigenous grants to a variety of non-Indigenous groups to assist their legal opposition of land right claims.

The NT Amateur Fishermen's Association, the NT Cattlemen's Association and the NT Seafood Council received funds.

Mr Scullion told the ABC he issued NARMCO with a "show-cause notice" about how it intended to manage the perceived conflict of interest, but the company declined to comment on how it handled that and said it was following proper processes.

ASIC records show NARMCO was established by longstanding CLP member John Jansen in 2003.

According to Government records, the company received its first IAS payment in June 2015 — nine months after Mr Scullion assumed the role of Indigenous Affairs Minister.

Ron Kelly became Country Liberal Party president in October. ( ABC News: Steven Schubert )

Mr Scullion was president of the CLP until October when he was succeeded by Mr Kelly, who formerly worked as Mr Scullion's chief of staff.

Mr Kelly began working for NARMCO in February 2018.

He previously worked as former NT chief minister Adam Giles's chief of staff before being handed a lucrative role as chief executive of the NT Department of Mines and Energy in 2015.

NARMCO 'supporting regional and remote people'

NARMCO's first grant through the Indigenous Advancement Strategy was awarded in June 2015.

It received $385,000 for a 12-month project that was later amended by the Department of Prime Minister and Cabinet to $330,000 for a 36-month project in Katherine, under the heading of "provide employee management and support".

Later in June 2015, the company received $225,000 listed as money "to provide Indigenous employment and economic development and business support services to indigenous Australians".

It was later changed to a 13-month contract from a 28-month term, which is permitted under the grant rules.

On September 13, 2017, NARMCO was again awarded $251,453 for a 10-month project in Katherine, but this time through the Aboriginal Benefits Account to "deliver outcomes by getting adults into jobs, fostering Indigenous business and assisting indigenous people".

On December 7, 2017, the company received $289,300 for "VRD Quarry Enterprises — Indigenous Business Entity Establishment" to run until June 2018.

The ABC asked Senator Scullion and NARMCO to explain how the grant money was spent for each project listed.

NARMCO said it supported "regional and remote people to establish and develop sustainable businesses and implement Indigenous employment programs", but would not release the names of which companies they worked with, citing confidentiality issues.

It said it could not comment on how it spent the money, and added that it does not distribute the funds to Indigenous companies on behalf of the Commonwealth Government.

"On limited occasions the Commonwealth Government has provided grants to NARMCO to manage infrastructure developments for client's benefit in communities," it said in a statement.

"Outsourcing project management and infrastructure development is a common practice of both the Commonwealth and NT governments, particularly where there is limited capacity at a community or organisational level."

Explanation sought on perceived conflict of interest

Mr Scullion said all grants to the company "have been made in accordance with departmental guidelines and directly benefit Aboriginal and Torres Strait Islander Territorians".

He added that all grants to NARMCO were awarded before Mr Kelly was elected CLP president in October.

But Mr Kelly commenced employment with NARMCO in February of this year — and on July 2, 2018, NARMCO was awarded $341,000 for "business advisory services" through the Indigenous Advancement Strategy to run through October 2019.

Mr Scullion said he had asked NARMCO to explain to him how it would manage the perceived conflict of interest.

"Upon his election [as president], my department briefed me on the potential issues relating to Mr Kelly's position within the Country Liberal Party," he said.

"I agreed with my department's proposed course of action to issue NARMCO with a show-cause notice to explain how it would manage these concerns."

NARMCO would not comment on how they handled that notice, but indicated they were following proper procedures.

"All NARMCO employees are aware of the need to manage their volunteer interests to ensure they do not to impinge on their work with NARMCO," the company said.

"All NARMCO employees are aware … of the need to manage potential and real conflicts of interest."

NARMCO would not reveal how much of the grant money was used to pay salaries for the company's employees, including Mr Kelly.

It said none of the funding had been used to assist the CLP or any of its branches.