Auditor General Larry Dennis yesterday slated some Government departments for obstructing his work, and warned of a growing trend of businesses dodging or being late with their payroll and pension contributions.

In his annual report presented to the House of Assembly yesterday, Mr. Dennis called for new penalties to be levied on employers which jeopardise the pensions of their staff by not making pension contributions.

A number of Government-appointed bodies were late submitting their accounts, and there was a serious concern about a lack of proper governance and accountability in quangos - which included the scandal-hit Bermuda Housing Corporation.

Mr. Dennis continued his 'name and shame' policy of publishing the names of companies which are in arrears for pension and payroll tax, which he described as a "serious and growing problem".

Last year, more than 50 employers were more than 90 days late owing more than $40,000 each in pension contributions - a total of $3,732,406.

Some 29 of these appeared in the 2001 list.

The biggest offenders were First Choice Construction ($229,477), Hamiltonian Hotel and Island Club ($202,577), Health Tec Limited ($156,764), Darrell Contracting Services ($143,554), Just Cleaners ($142,290), Beeline Transport Ltd ($109,852), Universal Construction Co Ltd ($107,708), Village Carpentry ($107,034) and Smith and Sergeant Painting Contractors ($106,542).

And 62 employers were more than 90 days late owing more than $50,000 each in payroll taxes, totalling $7,906,135. Again, 29 appeared in the previous year.

The companies with most arrears were: Precision Engineering and Technical Company ($435,862), Hamiltonian Hotel and Island Club ($405,731), Canber Saber Limited ($373,983), Just Cleaners Ltd ($354,709), Fine Touch Construction and Maintenance Ltd ($323,895).

The others included:

Elliott Street Ltd ($314,466), Smith and Sargeant Ltd ($289,428), Darrell Contracting Services Ltd ($243,706), Milligan-Whyte and Smith ($184,430), Swan Brother Ltd ($179,356), and J and C Construction and Maintenance Ltd ($173,088).

Mr. Dennis writes: "I am concerned that these deficiencies have already bred a culture in Bermuda wherein businesses and others view the payment of amounts owing to Government as optional, avoidable or evadable. When past due debts reach their present magnitude, they are a drain on Government cash flows, they increase borrowing costs and the risk of lost revenues and, in the case of pension contributions, they diminish workers' pension benefits.

"When employers fail to remit pension contributions they have collected from their employees, they betray their employees' trust and cheat them of the pensions for which they have paid."

Mr. Dennis also highlighted the need for Government to provide consolidated (summarised) financial statements; serious lack of accountability on government-quangos including BHC; and a refusal of Government departments, particularly Works and Engineering, to abide by the law and provide him information for audits.

His report also raised serious concerns about the $700,000 payment to a general contractor Pro-Active Management Systems Ltd. by Works and Engineering as a reimbursement for a performance bond for the troubled Berkeley School project when it had not proof the money had been paid in the first place. These findings have already been released.

Mr. Dennis touches on his investigation into BHC where he found the board failed in its duties to hold management at the quango accountable, even when the fraud scandal broke.

Bermuda Hospitals Board had to write off more than $1 million in unpaid patient bills due to poor accounting procedures. He complains of obstruction from Government departments, particularly Works and Engineering, which refused to provide him with information on the performance bond for the Berkeley project. The Attorney General's Office under former AG Dame Lois Browne Evans did not respond to a request for a legal opinion on the bond.

"This year again, obtaining documentation and other audit evidence needed to perform or complete audits has, in some areas, been worryingly difficult.

"My report explains some of the worst problems which, at the time of this report, are still unresolved. These problems demonstrate how my access to information provided by subsection 101 (2) of the Bermuda Constitution Order and subsections 14 (a) and (b) of the Audit act is being denied".

He noted there were "two occasions when senior public officials insisted that my staff could not have access to documents without their personal approval. I view these as attempts to obstruct the audit process and, should they recur, I will report the offending parties to the House and, if necessary, obtain writs of mandamus and seek clarification (and remedy) in the Courts of the Auditor General's rights of unfettered access to information".

He criticises Government departments and controlled agencies for being late in submitting accounts.

Even before the US financial crises erupted, corporate rules for improving governance were being reported. Mr. Dennis concluded "few, if any, boards or management committees of Bermuda Government entities operate in a manner that meets these standards".

The Government Employees Health Insurance Fund has been late for the past three years, and Hospital Insurance Fund and Mutual Re-Insurance Fund fund have not been on time for the past two years.

Other government controlled funds which were late last year were Bermuda Arts Council, Bermuda College, Bermuda Small Business Development Corporation, the Board of Trustees of the Golf Courses, and the National Drug Commission.