EING an Auditor General can be a lonely business. To suffer criticism from the Government whose finances they vet is part of the job description in many countries.

That certainly applies in Bermuda, as Larry Dennis, who has been the island's Auditor General for the best part of a quarter of a century, can testify.

He was verbally mauled last year by Government politicians and was even accused of racism after his office published a special audit report on the Berkeley Institute construction project.

But that was mild in comparison with the problems suffered by the former Auditor General of Grenada some time ago.

Again, it was a case of an auditor carrying out an audit of public finances and the Government not liking it. In her case she went to work one morning and found herself locked out of her office.

In Bermuda, the Auditor General's position is enshrined in the Constitution, a Crown officer independent of the Government to serve as a check and balance on the management of public finances. In the process, his work sometimes involves highlighting mismanagement and corruption.

More and more, the Auditor's work is including not just financial audits, but also value for money or performance audits.

The work of Mr. Dennis's office has illustrated good management of the public purse as well as bad and has helped to bolster Bermuda's financial integrity to the extent that international companies have incorporated here by the hundred.

But still he can expect to be lambasted by the Government, whichever party is in power. Where do Auditors General turn when they are taking flak from the authorities? The answer would appear to be, to each other.

"I often call Auditors General in other countries, or get calls from them," said Mr. Dennis. "We each face the same problems and it's good to talk about how we get through them."

strengthen those bonds, this week the island has been hosting the sixth Congress of Caribbean Organisation of Supreme Audit Institutions (CAROSAI), which winds up today at the Hamilton Princess Hotel.

It is the first time the island has hosted the event, which takes place every three years. Around 60 delegates and observers arrived from numerous Caribbean islands, as well as the UK and the US.

On Tuesday a Memorandum of Understanding was signed by CAROSAI Secretary General Jocelyn Thompson, UK Auditor General Sir John Bourn and Magnus Borge, director general of the INTOSAI International Development initiative.

The agreement was dedicated to improving the quality of audits and resource management throughout the Caribbean and built on the foundation of a continuing long-term training programme.

Corruption was a hot topic on Monday, when delegates heard presentations from Jamaica Auditor General Adrian Strachan and forensic audit specialist Michael Peer, of global accountancy firm KPMG.

Forensic auditing is aimed at gathering evidence of corruption that would be presentable in a court of law. Mr. Peer has been hired by ten jurisdictions to head their forensic auditing efforts.

He said fraud was on the increase and quoted UK statistics showing that there were more fraud cases involving more than ?100,000 ($160,850) in the first half of 2003 than in the whole of 2002.

And in 61 percent of major fraud cases, the victim was the Government.

Mr. Peer said he believed auditors should concentrate their efforts on detecting fraud involving senior figures in organisations, rather than the more common lower-level theft.

"A study in the US showed that where management is involved in fraud, the cost involved is three-and-a-half to eight times more expensive than when fraud is committed by an employee acting alone," said Mr. Peer.

"I believe there should be a zero-tolerance approach to high-cost fraud. Measured against the cost of this type of corruption, the costs of taking measures to prevent it are negligible."

Three elements existed in all fraud, Mr. Peer added - opportunity, motive and rationalisation, the ability of perpetrators of fraud to convince themselves that they had done nothing wrong.

"Controls and rules are there to prevent opportunity, but we all know that rules are made to be broken," said Mr. Peer.

"The motive will always be there. Wine, women and song will always drive men to need wealth," he said.

Defence against corruption depended on strong procedural controls within an organisation, the eradictaion of unnecessary layers of bureaucracy and a high level of awareness of the risk and potential damage of corruption, said Mr. Peer.

Most of the corruption that came to light was not revealed by auditors. "Historically, auditors have detected around a third of all reported fraud," said Mr. Peer. "Around 46 percent is discovered by anonymous tips from employees, clients and customers."

Effective interviewing of sources was crucial in gathering evidence of corruption.

Mr. Peer said: "Paper is not responsible for committing fraud, people are. The paper will leave a trail, but you need to interview the people effectively to fill in the gap."

Not all auditors had the skills necessary for this type of work, he added.

In his introduction of Mr. Peer, Mr. Dennis had touched upon the need to hire experts in the forensic audit field when dealing with big fraud cases, to lend certainty that the job had been done as well as possible in producing material that might be used as court-room evidence.

Mr. Strachan said that in his experience, one of the most common forms of corruption came in the award of government contracts - an issue which has long caused controversy in Bermuda.

"Sometimes contracts are awarded to people who are not properly qualified for the job and the bidding process is not carried out in a transparent or competitive basis," said Mr. Strachan.

"And there are occasions when substantial cost overruns make a mockery of the original contract price."

The allocation of government jobs was another key area where corruption was happening.

"Jobs can be given as favours to friends, either through nepotism or through political connections," said Mr. Strachan.

"They may be employed in jobs that are not necessary jobs, or for which they are not qualified. They may be remunerated at rates higher then established ones.

"There may be 'dummy employees' on the payroll, excess overtime claimed and persons being paid inflated amounts."

In Jamaica, other areas of corruption were in collection of taxes and duty, in the granting of permits and licences, money laundering, and the allocation of government housing.

Mr. Strachan described bodies dedicated to detecting and preventing corruption in Jamaica, including a Contractor General, who keeps a list of approved contractors and recommends contract awards.

An Integrity Commission investigates any allegation of corruption made against MPs and a Corruption Prevention Commission does the same for public officials, including police officers.

Whether Auditors should play an expanded role in identifying corruption suspects through forensic auditing was also brought up by Mr. Strachan, who said although the machinery was in place in the region to tackle corruption, its effectiveness appeared to be lacking.

"It is frustrating for auditors when we recognise cases of what appear to be straightforward corruption, which remain under investigation for a long time without anyone being charged," he added.

Mr. Strachan said corruption could inhibit private investment, distort public investments, slow growth, deprive the state of resources, undermine a country's legitimacy and undermine people's confidence in government institutions.

Linda Fealing, representing the Organisation of American States (OAS), reiterated that sentiment.

Quoting OAS Secretary General C?sar Gaviria, she said: "Corruption is a terrible cancer that undermines the legitimacy of institutions and the rule of law."

This week's conference also covered the promotion of good governance, a topic Mr. Dennis said had grown in public interest in the light of recent corporate scandals, such as the Enron case.

Also discussed was how Supreme Audit Organisations could support one another and how the independence of an Auditor General could be improved.