THE Northern Ireland Office (NIO) breached its budget by around £2 million last year because of uncertainty over paramilitary-related 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 £1.5m for the spending pot that 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 assessor 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.
