Europe's Peace programme, which supports projects to bring formerly divided communities together, refused to reimburse some costs for McAdam Design's project management consultancy which was extended without competitive tender. The burden will fall to the Executive at Stormont, said the Audit Office.
The £14 million pedestrian bridge links the east and west banks of the River Foyle and was opened by Taoiseach Enda Kenny and the First and Deputy First Ministers in June 2011. It is expected to feature heavily during Londonderry's year as the first UK City of Culture.
Comptroller and auditor general Kieran Donnelly said: "Because of the non-compliance with procurement rules, it is anticipated that only £110,027 will be received in grant funding from the EU and therefore that £312,573 will be disallowed and, as a result, have to be met by the Northern Ireland Executive."
A business case was drawn up for consultancy services to assist with delivery of the Peace Bridge, which had been approved by Derry regeneration body Ilex in February 2008 for £75,000 and awarded to the successful bidder at a cost of £63,784. This project was subsequently extended without tender and the total cost was around £477,000.
Ilex had previously expected that £422,600 of this would be funded by EU grants, the Audit Office said. Now only around a quarter of that will be delivered and the balance will fall to the Executive.
The Audit Office identified a total of £614,479 irregular expenditure in 2011/12 arising from the bridge, design fees for the transformation of Ebrington Barracks into a public performance space and other issues but acknowledged no new problems had arisen.
Mr Donnelly said: "I am pleased to note that no new regularity issues have arisen this year and that Ilex and its sponsor departments have devoted considerable resources and energy into the ongoing action plan to address the problems that Ilex has had in previous years."
SDLP MLA John Dallat said Stormont's Public Accounts Committee acknowledged that proper practices were not followed. He said: "It would be unfortunate that something as emblematic as the Peace Bridge would end up involved in a controversy with the EU that provided the money and maybe they should look more closely at the circumstances."
Matt McNulty, Ilex interim chairman, said the organisation had moved on from past issues and welcomed the auditor's acknowledgment that no new regulatory problems had arisen.