The Northwest Territories Development Corporation Act requires the corporation to obtain Financial Management Board approval when subsidies to subsidiaries exceed the maximum amounts approved by the board. During the year ended March 31, 1996, the corporation exceeded the approved subsidy for Northern Forest Products Limited by $747,320 without acquiring the proper approval from the FMB.

For these violations of expenditure guidelines to occur, there must have been a complete lack of monitoring and a disregard for legislative authority. Concerns were raised as to how many other government programs are operating under the same parameters as the NWT Development Corporation. This issue is addressed again in this report under the heading of "Monitoring Third Party Compliance".