Auditor General Larry Dennis' special report, tabled in the House of Assembly yesterday, contains many areas of concern, but he views them so seriously that he has qualified his audit for the first time in eight years.

In effect, a qualified audit means that the Auditor cannot give a clean bill of health to the accounts because of unanswered questions.

That can have severe repercussions; lenders might balk at giving credit to an organisation without a clean audit and it can also affect debt ratings, making it more difficult or expensive to borrow.

In this case, the amounts of money Mr. Dennis is concerned about are reasonably small in a $1 billion budget. But the effect in terms of damage to reputation are still serious.

Mr. Dennis' unanswered questions concern payments made on the controversial courts building, some of which were authorised personally by Minister of Works and Engineering Derrick Burgess.

Mr. Dennis' report shows concerns over the administration of the building contract go as far back as the bidding process. According to the report, Cabinet was not informed that Landmark Lisgar (the successful bidder) should have been disqualified because it failed to submit sufficient information.

More questionable actions have ensued since, including a breach of Government's own financial instructions by the Permanent Secretary for Works, personal approval of payments by Mr. Burgess in breach of the contract and a $600,000 payment to the contractor to "ensure its cash flow" – and not for work done.

The report says Mr. Burgess also instructed his Permanent Secretary, on legal advice, to bar the Auditor from the premises of Works and Engineering in breach of the Audit Act.

Mr. Dennis has also unearthed accounting problems in the Department of Tourism, which if true, are also deeply worrying.

Some of the criticisms have already been assailed by the Permanent Secretary of Tourism and Transport, Cherie Whitter, but she has not fully answered the concerns raised, despite a good deal of sound and fury.

What is most conerning is that Bermuda, according to the report was overbilled for its advertising to the tune of something like $1.8 million and that advance payments were made to Bermuda's advertising agency, GlobalHue for purposes which were apparently never carried out.

The Ministry of Tourism says it is now having a value for money audit done on its media buying; and that report should be made public when it is completed, but it also begs the question of what terms Bermuda is now getting its advertising on. Has there been an improvement?

What is more worrying is that soon after a senior manager in tourism began to try to track down the documentation on the alleged overbilling, he suddenly resigned having taken a $440,000 severance package which was conditional on signing a confidentiality agreement.

Similarly, Department of Tourism officials told auditors that they were unhappy with payments they were told to make, but "felt pressured to do so by what they viewed as the close relationship that GlobalHue has, and the influence it has, with the Minister of Tourism and Transport (the Premier)".

If it is true that the Minister of Works is personally able to authorise payments to contractors in breach of signed contracts and Government's own financial instructions, and if it is true that the Department of Tourism's civil servants feel obliged to authorise payments to a contractor because of the Premier's close relationship with the same contractor, then that means the independence of the Civil Service has been compromised.

If these allegations are proven, then Mr. Burgess should resign for unacceptable political interference in his Ministry and a cavalier disregard for contractual obligations and the law. And Premier Dr. Ewart Brown must ensure that his civil servants do not feel intimidated into approving payments or carrying out acts with which they do not feel are justified or where they do not feel Bermuda has had value for money.