The Auditor General has expressed frustration over the consistently late financial reporting of many Government departments and quangos, noting that not only does the problem create the potential for fraud, but it is getting worse.

?Over the years... I have consistently identified the entities that are late with their financial reporting,? Larry Dennis wrote in his 2004 Report on the Accounts of the Government of Bermuda tabled in the House of Assembly yesterday.

?I urged Permanent Secretaries and financial managers to address the problem. Eight years ago I recommended that the Ministry of Finance use its authority to require these entities to report promptly.

?Last year I recommended that the Ministers responsible for these delinquent entities take action to expedite financial reporting,? Mr. Dennis explained.

?This was based on the Government?s Code of Conduct, which states that ?the individual responsibility of a Minister for the work of his or her Ministry means that ... he/she is answerable for all acts and omissions and ... for any defect of administration?. Despite this, the situation has deteriorated.?

A decade ago most Government entities were many years in arrears, Mr. Dennis said ? but by 2002 great leaps had been taken to rectify the situation.

Nevertheless in 2005 the situation is worsening again, with 26 entities in arrears compared to 17 in 2002.

Accountability is frustrated by failure to report promptly, he said, creating an environment where fraud can thrive undetected. He adds: ?In a well-run organisation it would not be tolerated.

Mr. Dennis could only hope the delays were the result of lack of resources, a laissez-faire attitude, or a lack of ability ? ?Because the alternative is that they are deliberate and designed to prevent or defer the audit process. In which case, suspicions arise about possible wrongdoing or fraud.?

A general audit is not designed to detect fraud, he said, but sometimes they do ? and the prospect could be considered a deterrent for those considering fraudulent conduct. Without timely financial reporting, that deterrent is reduced.

Government entities late with financial reporting include:

All parish councils

Public Funds such as the Contributory Pension Fund, the Public Service Superannuation Fund, the Confiscated Assets Fund, the Hospital Insurance Fund, the Mutual Reinsurance Fund, the Ministers and Members of the Legislature Pensions Fund, and the Government Employees Health Insurance Fund

Government-controlled organisations such as the Bermuda College, the National Drug Commission, Stonington Beach Hotel Ltd., Trustees of the National Sports Centre, the Bermuda Arts Council, the Bermuda Small Business Development Corporation, and the Boards of Trustees of the Golf Courses

School Capitation Accounts such as the Berkeley Institute Capitation Account, the Sandys Secondary Middle School Capitation Account, and the Whitney Educational Trust