Scandal-hit Bermuda Housing Corporation is just one of many of Government entities lashed by Auditor General Larry Dennis for failing to provide financial information.

His team spent extra time auditing the organisation which is under Police investigation, with charges pending against at least one individual.

His report has a denial of opinion because deficiencies in controls over the valuation of properties and the purchasing of products and services were so serious.

He said: "I am not satisfied that all revenues and expenses of the Corporation have been recorded and that all recorded transactions are proper.

"Furthermore, management could not provide written assurances that the records presented for audit reflect all assets and liabilities of the Corporation and all transactions and agreements entered into by the Corporation.

"Management also could not provide assurance that the effects of any illegal acts or irregularities involving the Corporation, management or employees or violations of the law or regulations are appropriately reflected in the financial statements."

Police investigations into the organisation began after an audit by Mr. Dennis's office in 2002. He said the audit for the year ended March 2002 was completed in late 2003. "It is well known the Corporation's internal and management control systems and general control environment had broken down.

"Auditors could therefore not rely on the honesty and good faith of management. This necessitated a considerably more in-depth examination of transactions and balances than would be acceptable where the control environment was good.

"Records were incomplete and difficulties were experienced obtaining information and documentation because many managers and staff were new and unfamiliar with events and practices."

Mr. Dennis said the 2003 audit would be delayed as it had started late and had to be put on hold until records could be found. BHC was joined by a number of other organisations which failed to provided information to make a proper audit possible.

He said: "It is a sad commentary at the quality of Government's financial accounting that more than half of the financial statements completed during the year resulted in qualified or denied opinions.

"An auditor issues a denial of opinion only in very series situations.

"Professional standards call for a denial where deficiencies in accounting records and controls are so significant and pervasive that they limit the scope for the auditor's work to the extent that there is no basis of the expression of an opinion."

He issued denials of opinion on the financial statements of the following entities for several parish councils, Bermuda College, the National Drug Commission and several other Government bodies.

Bermuda College

His team were only able to give a qualified opinion because the College receives donation revenue which cannot be audited satisfactorily.

Mr. Dennis rapped the institution for failing to comply with the Bermuda College Act which requires it to submit an annual report to the minister.

He said Bermuda College is a flagship institution in Bermuda and its board needed to ensure its annual report was tabled in the House. "The failure to place this report before the legislature since 1985 is not acceptable."

Management responded by submitting the 1999, 2000 and 2001 reports to the Minister.

He attacked the lack of segregation in the payroll area which meant employees who prepare payroll have access to the personnel system master files and can change pay-rates and employee information. Management reported a new human resource system had been purchased to address some of the concerns, with some problems resolved and others to be investigated. But Mr. Dennis said: "Most of the above and other concerns were reported to the College following several previous annual audits. "The College is an example of an entity whose annual audits reveal the same problems every year, that each year agrees to address them but does not do so."

National Drug Commission

The Board of The National Drug Commission (NDC) should get a grip of its financial affairs or resign, said Mr. Dennis. He revealed the NDC was two years in arrears with its financial reporting when he wrapped up his report in January 2004. He said NDC audits were laborious and drawn-out because accounting records were inaccurate and incomplete.

The bookkeepers hired in 2001 to sort out the problem made a bad situation worse, said Mr. Dennis. "When the 2001 records were received for audit, they were so confused and convoluted that my staff took twice as long as usual to perform the audit. Thirty eight journal entries representing more than a million dollars were needed to correct the financial statements.

"Considering that the Commission's financial operations are relatively straight forward this almost defies belief."

He said many of the inaccuracies began when the bookkeepers attempted to restart the Commission's computerised general ledger system half-way through the financial year with some of the balances brought forward being inaccurate, wrongly named or regrouped. He said: "The last audited financial statements issued by the Commission were for the year ended March 2001 and they were not issued until December 2003.

"Those statements show cash in hand at March 2001 of $974,000, Government grant revenues of $2.7 million and programme costs of $2.4 million. For an organisation to hold, receive and spend public monies of this magnitude, and not present timely accountability reports to the Minister and the House is, in my opinion, unacceptable.

"Members of the Commission must collectively accept most of the responsibility for this state of affairs."

He said history showed late reporting and auditing often concealed fraud. "If members of the Commission feel their efforts have not made a difference in improving management controls and reporting practices, in my opinion they should consider notifying the Minister and resigning."

The Health Minister should do more to improve financial control at the NDC said Mr. Dennis. "The 2002 and 2003 audits have not begun by January 2004. Management stated the 2002 accounting records were ready for audit in November 2003 (20 months after year-end) but a review by my staff indicated that they were incomplete in a several important respects.

"Despite assurances that the deficiencies would be remedied promptly, the accounting records are still not ready for audit. E-mail and voice mail requests by my staff for information as to the status of the records mostly go unanswered."