money to a firm employing him as a consultant.

The revelation is in a report by Bermuda's financial watchdog.

And Auditor Larry Dennis said he was "unable to determine'' whether or not Government was forking out cash to consultants YVR under two or more different contracts -- contracts worth more than $26 million since the US Navy pulled out of Bermuda.

Mr. Dennis said: "The general manager assures me this is not happening, but there is no documentation in the contracts or elsewhere to demonstrate that contract prices take into account that some services are provided by YVR personnel whose costs are charged under previous contracts.'' Now Mr. Dennis has called for tighter controls over contracts at the Airport -- and a Permanent Secretary's post for the Ministry of Transport. And he said: "The absence of a permanent secretary has created situations of real and perceived conflict of interest.'' He added: "Another concern is that, over the years, many YVR invoices were approved for payment by YVR consultants.

"While this was inevitable under the circumstances, it does not constitute proper control over the expenditure of public funds.'' Mr. Dennis added that there were "deficiencies'' in procedures to ensure that the Department of Airport Operations had received all the services for which it had contracted for and paid.

He said: "For extended periods, the Department and YVR had only limited procedures for monitoring compliance with certain financial and technical aspects of the SERCO contracts.

"There were no processes in place for assessing the quality of services provided or for verifying the validity of certain costs charged by the SERCO contracts.'' Controversy over Airport contracts And he insisted: "The Department of Airport Operations should ensure that systems are in place at all times to verify that the millions paid...are for necessary goods and services actually provided and that technical monitoring and maintenance satisfy, at a minimum, the standards and requirements of the YVR and SERCO contracts and the Department of Civil Aviation.'' He added that consulting firm YVR had been paid $1.5 million to the start of this year.

And he said: "Another $1 million was committed, for services later contracted for over and above those called for by YVR's original management contract.

"These additional contracts, although envisaged in YVR's original management contract, were not put to tender and, in some cases, were not reviewed and formally approved by the Attorney General's Chambers.'' Three contracts are in place at the airport -- SERCO Aviation Services carry out responsibilities which include air traffic control, meteorological and aeronautical information, emergency services and electronic equipment maintenance.

A separate contract, with SERCO-IAL includes maintenance of the runway, lighting, power and communications systems.

YVR provides "core management'' and administers the two SERCO and other contracts.

AIRPORT FLY