The Northern Territory and federal governments are attempting to recoup almost $2.7 million in unspent funds from the North Australian Aboriginal Justice Agency for the 2022-2023 financial year.

On Wednesday at NT budget estimates hearings senior Territory government officials revealed NAAJA disputes the figure of $2.69million, which has led to the appointment of an auditor to settle the matter.

The ABC reports that NT Department of Attorney-General and Justice chief executive Gemma Lake told the hearings the auditor would investigate NAAJA's 2022-2023 finances.

"We've had a number of meetings with [NAAJA] over that period of time to understand the impact of the service delivery issues," Ms Lake said.

NT Attorney-General Chansey Paech told the committee the Territory government would work with the Commonwealth "around where the funds are, and any moves that are afoot around funding".

The investigation itself is expected to cost of $211,000.

NAAJA has experienced governance problems in recent years, with the board criticised over issues including unproven allegations of financial mismanagement and staffing shortages, the latter resulting in the organisation being unable to take on any new clients for several months before reopening their Youth Court practice in Mparntwe/Alice Springs in March.

Earlier this week, it was revealed NAAJA appointed chairperson Hugh Woodbury knowing he had assaulted his partner in 2020.