As the Government’s fiscal watchdog, the Office of Auditor General monitors public accounts for any signs of mismanagement or fraud.

Under the Bermuda Constitution Order, it is independent of any authority — being answerable only to the Governor.

The 1968 Constitution states: “The accounts of the Legislative Council, the House of Assembly, all Government departments and offices (including the Public Service Commission) and all courts of Bermuda shall be audited and reported on annually by the Auditor, and for that purpose the Auditor or any person authorised by him in that behalf shall have access to all books, records, returns and other documents relating to such accounts.

“In the exercise of his functions under the provisions of this section, the Auditor shall not be subject to the direction or control of any other person or authority.”

His mission is described today as: “The Office of the Auditor General, derived from its legislative mandate, is to add credibility to Government’s financial reporting and to promote improvement in the financial administration of all Government departments and controlled entities for which the Government is accountable to Parliament.” Government’s relationship with Mr. Dennis, however, has been marked with friction.

Last month, Mr. Dennis used his annual report to call for more financial independence. He called for legislators to establish his Office as an independent body and that he be allowed to operate its bank accounts and payroll, plus negotiate and arrange office space for his staff.

The Minster of Finance presented a nine-page response to the annual report, but did not broach the subject of greater independence.

In his annual report last month, Mr. Dennis described how in May of last year, the Ministry of Works and Engineering relocated the Office of Auditor General with less than 24 hours notice. Although the move was necessitated by an expiring lease, the abrupt action rendered his department virtually inoperable for three weeks.

The office move was announced between 4-5p.m. on Friday, May 26, 2006, and that it would take place over the weekend.

Mr. Dennis was in Canada at the time and later commented: “I think it is an outright plan to get at the Auditor General and attack his ability to audit.”

The relocation — to a smaller office — came three weeks after his 2006 annual report in which he criticised the Government, stating that $800 million of public funds could not be readily audited because the amount was unaccounted for.

Last month’s annual report reported $523 million unaccounted for, and Mr. Dennis pointed out that delays in accounting and bookkeeping leave the Government open to fraud and misallocation of funds, either by public servants or by the public, notably tax avoiders.

Describing the relocation row last year, Mr. Dennis said in his 2007 report: “Audit organisations operate independent of the Government apparatus, similar to QUANGOs.

“The drafters of the Bermuda Constitution and the Audit Act 1990 presumably supposed, as I did, that such extensive safeguards to auditor independence were unnecessary because the Executive and Government administrators would respect the independence of the Auditor General. The events of May 2006 expose the naivety of that assumption.”