Culture Minister Carál Ní Chuilín has faced fresh accusations of diverting money to "pet projects" over a £900,000 grant to an Irish language initiative.
The award to the Liofa campaign was cited during a heated Stormont committee meeting which looked at funding cuts to the arts.
DUP MLA William Humphrey questioned why money had been allocated at a time when other groups were facing severe cuts.
The Arts Council has seen its funding reduced by £870,000 because of a £10m shortfall facing the Department of Culture, Arts and Leisure.
Ms Ní Chuilín has faced criticism recently over the awarding of six-figure grants to Féile an Phobail in the context of falling budgets.
Appearing before MLAs yesterday, the Sinn Fein minister and senior departmental officials were further challenged on funding for Liofa.
Mr Humphrey said that £831,000 had been spent on the initiative since September 2011, with a further £70,000 allocated for salaries.
The North Belfast MLA added that a similar amount had been cut from the Arts Council, the Ulster-Scots Agency had seen its spending halved and funding to marching bands had also been removed.
He said the money for Liofa had been spent "on a pet project for the minister".
But Ms Ní Chuilín replied it was "completely inaccurate" to describe it in such a way.
Denis McMahon, the top civil servant in the department, added: "That's a value judgment and, in a sense, it's a political judgment."
Mr Humphrey queried where the Ulster-Scots equivalent to Liofa was. In response, Mr McMahon said proposals and a business case had been drawn up but had yet to be approved.
Ms Ní Chuilín told the committee she had been campaigning for it since 2011, and would give it full support.
Later, she was involved in a fiery exchange with committee chair Nelson McCausland on the subject of Tory austerity cuts.
Mr McCausland accused her of putting words in his mouth.
She hit back: "It's a pity I couldn't put words in your mouth, chair, you might have a bit more respect and a bit more manners."
Mr McCausland responded: "It is demeaning to you, minister, and degrading to behave in that manner."
She also clashed with Gordon Dunne, a DUP MLA who had questioned her on the geographic spread of festival funding.
He said the vast majority of funding was awarded to Belfast, with Ms Ní Chuilín pointing out the 10% of most deprived wards were located here.
She listed a series of other projects in south Armagh, Newry and Newcastle. But Mr Dunne added: "You didn't touch on many unionist areas, I noticed."
She replied: "I think it is an absolute disgrace that you have accused me of being sectarian," - a claim Mr Dunne immediately denied.
The pair had earlier clashed when Mr Dunne accused the minister of spending £12,000 on a "Sinn Fein pipe-dream" over the awarding of funding for an Irish language strategy.
But Ms Ní Chuilín claimed it was value for money.
"I think it is important that when you're putting strategies out, particularly in languages, that you do it in the language that people feel comfortable with, as well as English," she replied.
The Belfast Telegraph previously reported on the awarding of grants for Féile an Phobail.
In a column for this newspaper last week, Mr McCausland said the festival was funded by cuts to the Arts Council and that other organisations were not given an opportunity to apply.
Ms Ní Chuilín was questioned on the matter by Rosie McCorley, a Sinn Fein MLA for West Belfast.
"I don't believe it is controversial - I believe other people have made it controversial for political reasons," she replied.
Speaking afterwards, Mr McCausland accused the minister of piling Sinn Fein cuts on top of Conservative cuts. "These Sinn Fein cuts are ideologically driven and claw back money that was allocated to arts and cultural organisations in order to redistribute that money on a politically driven agenda," he said.
"It is clear that the Sinn Fein cuts will inflict serious and potentially permanent damage on the arts infrastructure in Northern Ireland."