"Or was the budget spent on hiring the one person?"
Hugh's salary probably WAS the IT budget.
In a previous job, my salary came out of the furniture budget for several months. I had this recurring nightmare of the auditors coming round and the boss-man having to drape a tablecloth over me - "fine, but don't you dare stick that 20" CRT on my back again !"
(Yes, it's the one with the emergency antimacassars in the pockets...)