Government needs to improve its tendering processes if it wants to avoid fraud, Auditor General Larry Dennis has warned.

In his annual report he said tendering was the fundamental control feature which supported propriety in Government.

He said: ?I am not greatly reassured by many of the tendering processes I have encountered over the past few years.?

He said Government?s tendering rules were not being applied consistently.

?The failure to implement a tendering system or to compromise the processes of an existing one would be the first line of attack if someone wished to create an environment where fraudulent activity would be difficult to detect.?

Tendering inadequacies were a red flag for auditors to probe deeper and civil servants needed to take steps to open up tendering to avoid a potentially hazardous environment said Mr. Dennis.

?There is a worrying tendency in some parts of Government not to tender when letting material contracts for the procurement of goods and services or to change the tendering criteria after selection is made. ?Governments need to demonstrate to all concerned that goods and services are required without favour and with due regard for economy, probity and value for money.?

He said the Accountant General issued guidelines for tendering to ministries and departments.

?Unfortunately, some ministries and departments do not fully comply fully with these rules and the Accountant General?s department does not monitor for compliance.?

Mr. Dennis noted the Bermuda Hospitals Board did not seek tenders for the $1.5 million reimbursement project while a project for kitchen flooring was not formally tendered. The BHB responded that tendering should be done but it said the reimbursement project was being efficiently handled by one consultant with excellent knowledge of the local health care system, resulting in significant time and expense savings.

He said Government controlled organisations (quangos) are not required by law regulation to comply with the financial instructions though some have adopted them voluntarily.

?I believe that compliance with the tendering requirements of the financial instructions should be mandatory for all quangos.?

He said he had recommended monitoring for better compliance but he did not believe ministries shared his concern.

He said fraud was inevitable in large organisations like Bermuda?s Government and he called on the Accountant General to develop procedures about who should be notified when fraud is detected or suspected.

Such people should be the minister, the permanent secretary, the Accountant General, the Attorney General and the Auditor General.

However in his response the Accountant General said it was the job of the department head or accounting officer to flag up the fraud and the Accountant General would then take a view of who else to contact.