Northern Ireland Office 'breached 2014/15 budget by £2 million'
The Northern Ireland Office (NIO) breached its budget by around £2 million last year because of uncertainty over terrorism compensation awards and work at Hillsborough Castle, last year's annual report said.
Delays in the completion of assessments by an independent organisation left the department short by £1.5 million for the spending pot which covers relatively volatile "managed" expenditure.
Officials transferred money between different financial pots aiming to promote realistic budgeting, the document said. But due to an unexpected hold-up in making payments to victims of paramilitaries the department has been left in breach of its accounting responsibilities.
NIO permanent secretary Sir Jonathan Stephens said: "I believe the department acted appropriately based on the assurances provided by the independent assessor and that the breach did not arise as a result of failings of financial management within the NIO.
"The rules on accounting and budgeting for provisions within Government make this a difficult area to manage. This issue was raised by the National Audit Office (NAO) with HM Treasury in 2014."
Annually managed expenditure can be difficult to control as it is spent under a different part of the budget on demand-led programmes like compensation .
The assessor assured the NIO claims surrounding terrorism like damage to property would be finalised by January, the NIO annual report for 2014/15 said.
In response the NIO, in line with a requirement for "taut and realistic budgeting", moved money from managed to resource (day to day running) expenditure.
But the a ssessor did not complete his work by the end of the financial year, meaning no payments could be made and the money was in the wrong place, creating a £1.5 million breach.
Separate grant payments to Historic Royal Palaces as it assumed responsibility for Hillsborough Castle left the NIO £400,000 over a capital works limit.
Required parliamentary approval was not sought as the NIO was relying on Treasury guidance which did not mention it.
Unauthorised capital grant payments exceeded the limit by £406,000. T he audit office has asked Treasury to consider whether budgeting guidance was clear enough.
An NIO spokesman said: "This relates to the way money is accounted for within the overall departmental budget and we have taken steps with the NAO and the Treasury to consider the technical issues raised. It is right that our spending is scrutinised by the NAO, Parliament and the public."
The NIO has undergone a major slimming down as part of wider cuts to Government. It has urged responsible budgeting on Northern Ireland ministers but faced calls from Sinn Fein for more money to pay for public services via the devolved government at Stormont amid a wider dispute over welfare reform which threatens the viability of powersharing.