A financial control `holiday' at the Department of Tourism should end, Auditor Larry Dennis insisted yesterday.

He added that Bermuda's bus service was also suffering a financial breakdown.

And he warned that action needed to be taken to put accountants back in the driving seat at the Passenger Transport Board.

Mr. Dennis' report revealed that a $540,000 Tourism Department contract had been acted on -- with cash changing hands -- without anyone actually signing the contract.

Mr. Dennis said: "Other large contracts were not signed until after the services had been provided.'' And he warned: "In the event of disputes, unsigned or late-signed contracts could limit the Department's ability to enforce its rights.'' The report covered the financial years ending 1996 and 1997 -- although it contains information up to October last year.

The report added that the Tourism Department had never collected its share of the take under contract with a company to manage a festival -- understood to be Jazzscape.

Mr. Dennis' report said: "The Department was entitled to a share of the net revenues. However, the Department never asked for or received it's share.'' The report added: "The Department did not retain copies of two of the contracts into which it entered.

"It thus lacked a basis for monitoring the contractors' compliance with contractual obligations.'' And the report said: "A contract was entered into that required significant amounts of money to be advanced before the services were provided.

"Invoices for services subsequently provided were not reviewed for contractual compliance or to ensure that they covered the amounts already advanced.'' Finance Minister Eugene Cox did not return calls from The Royal Gazette .

But an official reply from the Tourism Department promised: "A register of contracts will be maintained to provide complete documentation and contracts will be signed before services are provided. "We will also ensure that contracts have reasonable payment terms and that any amounts due to the Department are investigated and recovered.'' The report added that the PTB lacked control over money coming in and going out.

Mr. Dennis said: "Appropriate controls are not in place to ensure that all canisters used to collect passengers' money and tokens are collected from the buses to which they were issued and their contents counted and accounted for.'' He added that he had found no evidence of money being stolen because of sloppy management.

But Mr. Dennis admitted: "If people did, of course, I probably wouldn't be able to find out because the controls are so weak I couldn't tell if anything was going on.'' Other problems at the PTB highlighted by Mr. Dennis included a failure to record who counted cash and that money coming in was not tallied to what was actually banked.

The report added that major purchases of goods and services had been made without tenders going out and that cash was not banked daily -- both against the Accountant General's Financial Instructions.

Other problems included lax control over bus tokens and passes, with no clear idea of how many had been sold and how much money should have come in in return.

Mr. Dennis added: "In many sections, the problems are so basic, if we solve the small problems then we can address the bigger ones.

"But the small issues are left to fester and we don't need the Auditor General to point that out.'' A note attached to the report from the PTB admitted there were problems -- and that rules would be "amended and established'' to get the Board's accounting back on the road.

But Mr. Dennis added: "All these are examples of a pervasive lack of good accounting throughout Government.''