The former minister had been criticised for promoting the initiative.
But the department has said she and her colleagues were only made aware of the budgetary pressures in February 2016.
They received the information in a letter from the then Department of Enterprise Minister Jonathan Bell.
Another letter from Mr Bell was received in November 2015 which contained details on proposed changes to tariffs, but did not mention the financial crisis.
Mrs O'Neill, who is now Sinn FÃ©in's Stormont leader, previously defended her role in promoting the scheme saying Sinn FÃ©in "shut it down straight away" when the issues arose.
The RHI scheme was set up in 2012, intended to increase the creation of heat from renewable sources.
However, businesses have been receiving more in subsidies than they are paying for renewable fuel and the scheme became highly oversubscribed.
A Department for Agriculture spokesperson said: "While DETI officials may have mentioned the new tariffs during presentations on RHI at some information events connected to the renewable energy training programme in the autumn of 2015, the department itself was given no indication of the budgetary pressures involved.
"On the 5th February 2016 Mr Bell wrote to First and deputy First Minister, copied to all his Ministerial colleagues, seeking agreement to take an urgent decision on the closure of the RHI scheme. It was only in this latter correspondence that Mr Bell mentioned affordability and budgetary pressures."

Northern is implementing increases of up to 50p from 21 May to "bring fares in line with other areas".
The RMT union said the "latest fares rip off is just another example of costs being shifted" to passengers.
Northern, which has introduced rises since September 2016, said fares in the area have been "historically low".
The rail operator said there would be an increase "of no more than 50p" on the majority of off-peak day returns and singles for journeys made within Greater Manchester.
It said there would be no change to anytime day single, anytime day return or weekly season tickets and Transport for Greater Manchester concessions.
There would be reductions on some tickets, it added.
Northern said the rises were to make fares "fair and consistent" across the network.
RMT general secretary Mick Cash said: "This latest fares rip off is just another example of industry costs being shifted to the passenger."
Rochdale councillor Andy Kelly said the hike was "the great rail rip off " and would "affect the poorest".
"Many commuters tell me that they have changed their shift patterns to take advantage of off-peak discounts."
Northern said the travel increases would go towards its modernisation programme which will see it get rid of Pacer trains by 2020.
Rail workers on Northern, Southern and Merseyrail have gone on a number of strikes with the latest on 8 April over proposals for driver-only-operated trains.

The conservationists have described it as a major milestone, there are thought to be about 70,000 coins in the hoard.
By the end of the day on Friday the team had removed 55,014 coins, 63 more than the previous largest Roman Cunetio hoard found in Wiltshire.
The team are clearing the coins in view of the public in a special laboratory at La Hougue Bie Museum in Grouville.
The Jersey Heritage team has spent two years removing the coins one by one from the hoard discovered by two metal detector enthusiasts in 2012.
The value of the hoard will not be known until next year when the States will have to decide whether to pay to keep it in the island.
Michelle O'Neill only learned of the huge hole in the Renewable Heat Incentive (RHI) budget at the time the scheme was closing, the Department for Agriculture has confirmed.
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Rail fares for some off-peak Northern services in Greater Manchester will be increased by up to 10% - the third rise within the past year.
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The team removing coins from the Jersey Celtic hoard have gathered more than in any other British hoard to date.