More than $520 million in Government money is unaccounted for, according to the Auditor General and he has raised the possibility of fraud.

The alarming information was revealed in the latest annual audit report from Larry Dennis who shows that the unaccounted $523 million is the result of consistently late financial reporting from Government quangos and public funds.

A press release from his office explains that late reporting “creates an environment where fraud can thrive”.

Mr. Dennis has reported on this problem in the past and says the tardiness is getting worse. Only nine of the Government’s 36 quangos and public funds had reported within ten months of the fiscal year’s end date. Some of the offenders haven’t reported since 2001.

The Auditor says in his report: “I would hope that these reporting delays are the result of resource shortages, or even a laissez-faire attitude to responsibilities, or even an inability to maintain adequate and up-to-date accounting records. Because the alternative is that they are deliberate, and designed to prevent or defer the audit process. In which case, suspicions arise about possible wrongdoing or fraud.”

Minister of Finance Paula Cox released a nine-page statement in response to the Auditor General’s 230-page report. In the statement she deals with the issue of late financial reporting.

She said: “This has been a long-standing problem that has now reached the tipping-point, and must be rectified without delay.

“Those organisations that do not respond in a timely manner will be at risk of having funding withheld until their financial records are current.”

Mr. Dennis points out that he has made numerous attempts to rectify the problem — his first effort was a meeting ten years ago with the then Minister of Finance. Despite the work, he says “the situation continues to deteriorate”.

Minister Cox argues there is progress, as evidenced in the fund status section of the report which she recommends members of the public read. Some of the late funds are shown slowly coming into compliance.

She also explains that a list of funds was recently brought up to date by the Finance Ministry; there have been new Government employees hired to help stop the on-going problem; and there’s a new system of internal auditing in place.

Mr. Dennis said late financial reporting is a problem because it has “now reached the point where legislative control within the Government of Bermuda is impaired”.