THE DEPARTMENT of Finance and the National Treasury Management Agency yesterday clashed over responsibility for a € 3.6 billion accounting error which has reduced the Republic’s outstanding debt by 2.3 per cent of gross domestic product. The error arose due to the inaccurate accounting of the NTMA’s borrowings to the Housing Finance Agency, which provides loan finance to local authorities and voluntary housing bodies.

In a statement, a spokesman for the NTMA said it was the responsibility of the Department of Finance to calculate the general government debt, and that the NTMA raised the issue of potential double-counting “on a number of occasions from as far back as autumn 2010”.

The department refused to comment when asked whether it had been alerted to the issue last year, but in a statement said that it had only happened lately. “The NTMA has recently drawn to our attention the fact that there was a change in their relationship with the [Housing Finance Agency] that has an impact on the accounts of the two entities,” it said.

The €3.6 billion error was discussed at Cabinet yesterday. While a Department of Finance spokesman said the error would have no impact on the Government’s budget preparations there is to be another Cabinet meeting tomorrow focusing exclusively on the budget.

Minister for Jobs, Enterprise and Innovation Richard Bruton is cutting short a five-day trip to the US to attend this Cabinet meeting. A spokesman for Mr Bruton last night insisted he was not being recalled: “The Minister decided that since there’s a Cabinet meeting to discuss the budget, in order to attend that meeting, it would be necessary to depart from his investment mission to the US.”

Meanwhile the Central Statistics Office has taken partial responsibility for the error, which will see Ireland’s gross outstanding debt for 2010 revised to € 144.4 billion rather than the published € 148.0 billion.

The Government had intended to announce the error along with the medium-term fiscal statement, due to be published on Friday, setting out the planned fiscal adjustment path for the period 2012-2015.