• Santa Teresa Aboriginal Community, 80 kilometres to the east of Alice Springs in the Northern Territory. Kids play on the town oval (AAP)
A troubled Aboriginal council in outback South Australia will get no new Commonwealth funding until it improves its governance.
Myles Morgan

25 Jun 2015 - 4:25 PM  UPDATED 25 Jun 2015 - 5:54 PM

The Indigenous Affairs Minister Nigel Scullion said he's had concerns about the APY Executive Council for months.

Mr Scullion visited the APY Lands a number of times in the past and said he's happy to give Federal Government money to Aboriginal organisations which are getting results there.

But he said the current council is not is not performing well after a KPMG audit revealed serious issues with its accounting practices.

“This isn't a virus it's simply bad behaviour in one organisation,” said Mr Scullion.

“It hasn't been evident in other organisations, we do need to assist organisations with capacity and organisations when things start getting off track.”

The Council has been subject to an independent investigation commissioned by the South Australian Government which found a number of problems with the APY accounts in the last six months of 2014.

A KPMG report revealed staff had been paid in excess of their salaries, public money was spent without proper approval, and a lack of staff experience with record keeping.

It also found over $100,000 in expenditure 'did not match the scheduled budget'. 

“I know that those people who are in receipt of the funds in the Lands would want to know where we're up to. If there's any dodginess, I'll be seeking advice about what my options are,” said Mr Scullion.

“We'll move to build capacity because I've always said we need Indigenous organisations to deliver these programs and I'm very confident RASAC has a good history of delivery of services in a much more transparent and appropriate way”.

NITV News did approach the APY Council for comment but we are yet to hear from them.