The Government failed to address the "control weaknesses" that allowed Harrison Isaac Jr. to perpetrate his enormous fraud for almost two years after it was discovered, according to Auditor General Larry Dennis.

Mr. Dennis said the crime was possible because bank checks and other controls were months in arrears.

He told that as of the beginning of 2006 this had yet to be tackled, and it was possible, although unlikely, that the same thing could happen again.

According to legal documents in the Isaac case, the fraud went undetected because it coincided with a nine-month period during which time no reconciliation (checking and balancing) of the bank account in question was done due to a software breakdown.

Isaac was able to access the account and make unauthorised transfers because he had requested security cards from the bank in the names of both himself and other department employees but kept them for himself rather than distributing them. According to a source close to the case, the Bank of New York sent statements for this account directly to Isaac ? something that was not supposed to happen. This meant he was able to 'doctor' them by cutting out and pasting different amounts.

"He was doing things that the bank should have known that he shouldn't be doing," said the source. "He set up the account, he had the passwords for it and the statements were being sent to him. That was a 101 error."

The fraud was discovered in April 2004. Last summer, Mr. Dennis criticised the Accountant General's department for failing to tighten up procedures. He said that by February 2005 ? ten months after the fraud was discovered ? the account had not been reconciled since October 2004.

He said the lack of reconciliation on major bank accounts continued throughout summer 2005. He added that in the most recent response to his recommendations, the Accountant-General's department said the backlog of reconciliation had been addressed and a review would be done to assess the need for extra resources in the bank reconciliation section.

Mr. Dennis said he was encouraged by the desire of newly hired staff in the Department to address the problems and noted in his most recent report their confidence that the problems would be eliminated by March this year. However, he told that there were ongoing problems in early 2006.

"That's not up to scratch," he said. "Theoretically something like that could arise (again) although I think the probability is low."

Shadow Finance Minister Patricia Gordon-Pamplin said: "Any clever individual, intent on fraud, can perpetrate such fraud even in enhanced security situations,"

But she added: "When fraud is detected, the government ought to put the resources in straight away to tighten up the loophole. Clearly, these situations are still deficient. Obviously, when someone's pilfered $2 million you want to tighten that up straight away and it should not be ongoing. When a deficiency is highlighted it should be acted upon more expeditiously than leaving it two or three years down the road. Who knows what else will go out of the door in the meantime?"

Speaking after Isaac was sentenced to more than four and a half years in jail yesterday, Accountant General Joyce Hayward said she was satisfied that all necessary measures are now in place.

"We have addressed some issues and have talked to the bank," she said. She added that she could not comment on whether the government is taking any action in relation to the Bank of New York.

The bank declined to comment on the case when contacted by .

Finance Minister Paula Cox, under whose remit the Accountant General's Department falls, declined to comment directly on the case. Instead, she referred this newspaper to the response she gave in the House of Assembly on May 12 2006 to Mr. Dennis's latest report.

In this, she said: "The recent cases of theft in the Accountant General's Department and the Immigration Department have led to a tightening of controls and the re-establishment of the Internal Audit Unit which has has carried out some significant work within the last 12 months. During the course of this work, the Internal Audit Unit has made sound recommendations for more rigorous controls and has uncovered a serious financial lapse in one entity that has led to a dismissal and pending criminal charges for theft. Some people are dishonest and will commit acts of theft and fraud but that behaviour is not indicative of the vast majority of employees or public servants."

Former Acting Director of Public Prosecutions Kulandra Ratneser said that whatever efforts are made to stamp out fraud, situations like the Isaac case will always arise: "I've spent all my life prosecuting fraud cases.

"Society works on the basis of trust and if there's an opportunity for people to commit fraud you will find that someone is tempted to do so. That's why you need checks and balances all the time, but people will still find a loophole," he said.

"As long as there's the human brain, man will find ways and means of using other people's money for his own benefit."