Government is still refusing to share financial information about the controversial Berkeley Project says Auditor General Larry Dennis who is planning a legal bid to get the facts.

However Premier Alex Scott told the House of Assembly last night that Works and Engineering does not require receipts for each and every one of the literally millions of items in a project as big as Berkeley ? including the $700,000 bond paid by the contractor as "insurance" for the project.

The $101 million school project is a year late and $13 million over budget.

In his annual report released yesterday Mr. Dennis said his department had sought to find out whether the bonding company, set up by the Bermuda Industrial Union, had sufficient assets to cover the $6.8 million obligation under the bond.

The Auditor General has also tried to find out if the $700,000 paid by the contractor to cover the purchase of the bond was passed on to the bonding company.

He said a request had been made in summer of 2002, in October 2002 and again in November 2002 when it was put in writing to the Permanent Secretary of Works and Engineering. However the Permanent Secretary then asked the Attorney General's chambers to make a ruling on whether the information request was reasonable. The Attorney General's chambers ruled it was inappropriate to decline virtually any request from the Auditor General.

Mr. Dennis wrote in his report: "Despite this opinion the documentation has still not been provided. "In my view by continuing to withhold this information the Ministry is deliberately disregarding my constitutional and statutory right of access to information."

He said he was willing to give ministers time to educate themselves about the responsibilities of the audit process. But he warned: "I am noting before this issue is put to rest I will obtain a writ of mandamus and/or take this issue to the courts for clarification."

Mr. Dennis said lawyers had told him the Bermuda Industrial Union, which owns all the shares of the bonding company, is prohibited from guaranteeing the indebtness of its subsidiary.

"This is important because the President of the Union has stated publicly that the Union has sufficient assets to cover any obligations arising under the bond issued by its subsidiary."

He said he had asked the Registrar General whether she agreed with that legal advice but five months passed before there was a response disagreeing with that view.

In the House of Assembly yesterday Premier Alex Scott said, speaking in reference to battles he had with Mr. Dennis during his term as Minister of Works and Engineering over the Berkeley project, said: "In other jurisidictions the Auditor General doesn't insert himself as much as this one."

Saying he had "responded strongly" to Mr. Dennis at the time, Mr. Scott said: "He seemed to imply the premium (the bond) shouldn't have been paid.

"The auditor would have you believe there should've been a receipt," he added.

"We don't have to receipt each and every item."

But an "astounded" Shadow Health Minister Michael Dunkley immediately spoke out, asking if the Premier was saying Government does not require receipts for its purchases.

Works and Engineering does not require a receipt for each and every item, Mr. Scott replied, adding there were "literally millions" of items in a project the size of Berkeley.

Strict accounting is kept, he added, but items such as the cost of the bond ? which he clarified with Opposition Leader Grant Gibbons as $700,000 ? are listed on the bill of quantities and do not have a receipt. But Mr. Dunkley rose later to say he was "baffled" by that explanation, noting that a paper trail existed for each and every purchase anyway and saying Finance Minister Paula Cox could correct him if he was wrong on that statement. But the Finance Minister remained in her seat.

And Mr. Dunkley asked why a Police investigation, which was still being completed, had been launched into that matter if the Premier was so confident the bond had been paid. "This is the Government of Bermuda ? we don't keep track of our purchases. That can't be true," he said. "This is another smokescreen."

Mr. Dennis said late financial reporting and a lack of co-operation was a big problem for him and his team. He said several Government entities were consistently in arrears with their financial reporting. He said: "Late financial reporting is contrary to legislated requirements, precludes managerial and ministerial accountability, frustrates effective management control, creates an environment where fraud can thrive and prevents the production of consolidated financial reporting by Government."

He said no amount of chasing, cajoling or begging by his staff would shift certain recalcitrants.

He said: "I have reason to believe that, in a few cases, management has intentionally obstructed or delayed the audit process."

Such behaviour frustrated the democratic process said Mr. Dennis and threw open the question of fraud. He said: "Annual financial audits are not designed primarily to detect fraud.

"But if suspicions arise during audits that fraudulent activities have occurred, audit work is extended until such suspicions are confirmed or allayed.

"Regular and prompt annual audits can therefore cause managers and staff to have second thoughts before engaging in fraudulent conduct.

"By obstructing and delaying annual audits those who would perpetrate frauds can create and protect an environment where fraud can thrive and remain undetected, thereby causing the greatest damage to Government."

As well as the Berkeley project Mr. Dennis complained about 17 months of feet dragging at the Bermuda Small Business Development Corporation.

Information which did come was often incomplete and inaccurate. The audit was finally done ? two years after it had started and had wasted public money by the overtime it created.

The Mutual Re-insurance Fund, run by the Hospital Insurance Commission, also took two years to audit because of information delays from management. The actions of the Board of Trustees of the golf courses had prompted a warning that management needed to get serious said Mr. Dennis who added a lack of cooperation had led to audit delays and wasted effort.

Mr. Dennis made his annual attack on Parish councils for reporting late or failing to report at all. "With the exception of Hamilton Parish council this is a problem with no end in sight.

"Despite protestations to the contrary, most Parish councils apparently could not care less about issuing audited financial statements promptly or meeting their other accountability responsibilities."

A bookkeeping company had been hired by the Health Ministry to maintain records for the five parishes which had rest homes but this has not helped said Mr. Dennis. "Instead of chasing the councils for accounting records and information my auditors now have to chase the bookkeeping company. This is a tiresome and time consuming process. Records and financial statements are never presented for audit unless repeatedly requested by my staff.

"Promises to produce them are regularly broken and reminders by telephone, e-mail and fax are seldom answered or acknowledged."

Inaccurate information was common said Mr. Dennis who added on one example the financial statements were prepared to the wrong year-end. Despite spending $60,000 a year for the bookkeeping services the Ministry did not ensure service was adequate. Now an accountancy firm is to replace the bookkeeping company. He said monies may have been mismanaged or misappropriated but there was no way of telling. He suggested appointing people to parish councils who were committed to behaving responsibilities or close them down altogether.