A lack of control over bank accounts and failure to comply with Government rules and legislation were among the complaints in former Auditor General Larry Dennis' scathing last annual report.

Mr. Dennis' hard-hitting review of 2007/08 had its usual theme of unaccountability, according to Auditor General Heather Jacobs Matthews who released it in the House of Assembly yesterday.

Andre Curtis' controversial faith-based tourism scheme and the National Drug Commission came in for some of the fiercest criticism, with Mr. Dennis recommending Police investigations in both.

He also called for the Ministry of Finance to consider disciplinary action against officers whose entities fail to provide enough documents for audits, and to introduce whistle-blower legislation to encourage public employees to report apparent malpractice or other wrongdoings.

Mr. Dennis spoke of negligence of senior management to carry out their oversight responsibilities, creating an environment conducive to error, misappropriation and fraud.

He also pointed to:

• inadequate control over bank accounts;

• accounts in arrears and late financial reporting;

• lack of proper supporting documentation;

• denials and qualifications of opinions in audit reports;

• lack of tendering for major construction projects;

• failure to comply with Government's Financial Instructions, policies and procedures;

• failure to comply with legislation;

• failure to comply with contractual obligations;

• unaddressed audit recommendations.

Responding yesterday, Finance Minister Paula Cox said: "It is not the role of the Auditor General to report on the very many things that are right in the financial affairs of the public sector.

"The Audit Act requires his reports to focus mainly on observed problems and deficiencies. Accordingly his reports identify deficiencies in accounting and accountability systems.

"Therefore it is sobering to note the former Auditor General's comments that 'financial management, accounting systems and accountability reporting are, in many areas of Government, much better than they were a decade ago'.

"This is a testament to the current administration's commitment to strengthening the way in which it manages and controls Bermuda's public finances. But the Government recognises that there is still room for improvement.

"Overall the Government has placed great emphasis on the need to address the numerous recommendations made by the Auditor over the years.

"Though there are on occasions different perspectives provided by the various departments or agencies concerned, the tone of the responses has been consistent with recognition to adopt a continuous improvement approach that is modelled on best practice.

"Since words mean little without action, I anticipate that very soon there will be some demonstrable improvement in some areas that will be readily apparent. The public should realise also that audit reports are historical documents.

"However, the reporting of the audit results and the Auditor General's opinions in the media gives his reports a sense of immediacy that in many respects is misconstrued. This must be guarded against.

"The reason for this caution is that by the time that an audit report is released, sometimes more than a year has passed. Very often Government officials or boards of public sector entities — who have the fiduciary responsibility for their own accounts — have taken action already to address weaknesses or to make enhancements to financial systems and controls.

"The Auditor's report also includes commentary on various matters that the Auditor General considers matters of ongoing or Government wide concern. Some items may be considered contentious and it is the Government's intention to address them in a fair and practical manner. Indeed certain issues have already been the subject of a Special Auditor General's report and other items have been signposted to require further attention."

Ms Cox said progress is being made improving late financial reporting, while Government is moving to strengthen tendering practices.