Auditor General Larry Dennis issued his annual report on Government finances last week.

As ever, it made for grim reading.

A good deal has been reported on the backlog in presenting financial statements for Government funds valued at an estimated $500 million.

Some of these concerned parish councils, aided schools and other small quasi-autonomous organisations, whom Finance minister Paula Cox defended, pointing that their officials often give their time voluntarily.

But the bulk of the money, some $400 million, is held in a number of major Government funds, notably the Contributory Pension Fund, the Government Employees Health Insurance Fund and the Hospital Insurance Fund (HIP) and the Public Service Superannuation Fund.

In many cases, the money in these funds is effectively held in trust for pensioners, future retirees and patients.

While it should be clear that this money is not missing, delays in financial reporting raise the risk, as Mr. Dennis noted, of abuse and theft going undetected. This is not an potential risk; it has already happened.

Mr. Dennis rightly also again raises the problem of businesses failing to pay pension and payroll tax deductions on to Government.

Despite a crackdown a number of years ago led by Ms Cox and former Attorney General Larry Mussenden, this problem is clearly worsening again.

Almost $50 million of these taxes and contributions were more than 90 days in arrears at July 31, 2007, an increase of almost $8 million on the previous year.

With the economy apparently slowing down, this is a problem that is likely to get worse, not better.

Mr. Dennis also points out that Government is breaching its own policy in continuing to do business with businesses in arrears, and went so fas to cite three of them, in addition to his annual name and shame list.

Of those companies in arrears, the most serious offence, to this newspaper's mind anyway, are the failure to transfer pension contributions.

This is not a tax, and it is money that belongs to the employee, not the employer or the Government. When it is deducted and not passed on to the Contibutory Pension Fund, it is theft, pure and simple, and it remains a mystery that more employers are not prosectuted.

On that note, it is ecouraging that the pension law was amended in Parliament this month to increase the fine for non-remittance from a paltry $250 to $1,000. That's still an inadequate deterrent, but it is better than nothing.

It is not secret that relations between Mr. Dennis and the Government have been poor, to put it mildly, for some years, and reached a nadir last year when he was arrested and detained.

It would be tempting for the Government, on that basis, to assume that Mr. Dennis' criticisms are driven by animus, and some might even argue that that would be a natural human reaction.

But the report appears to be wholly objective. Government, now more than ever, should act on the recommendations contaned in the report.