Tourism is tightening up its procedures after coming under fire in the Auditor General's special report.

And Government labeled the report unprofessional for ignoring explanations sent to the Auditor General dated February 20, 2009.

Mr. Dennis said the taxpayer had shelled out around $1.8 million in overpayments to US advertising agency GlobalHue.

And he said when Tourism's Director of Sales and Marketing began to investigate he was given a massive $440,000 pay-off more than three times the going rate.

However the Ministry's letter to the Auditor General said some of the 2006 paper trail concerns raised in the special report had been addressed.

The letter states: "Issues relating to lack of third party support for media invoices have been resolved and the Department can confirm that they are now receiving third party invoices as support for all broadcast media."

Meantime, Tourism will soon have an independent value for money audit to determine the value of the broadcast media purchased in 2007/2008.

The report will help determine if Tourism overpaid or underpaid for advertising given the typical industry standard.

This was explained to the Auditor General but was not included in his special report, according to a Government press release.

Government said Mr. Dennis had ignored the fact that New York Tourism Office employees are subject to a different pension plan than Bermuda-based civil servants.

The New York Office's pension scheme was devised decades ago and has created a significant cost burden on the taxpayer.

The February letter stated: "Most employees in the overseas office are not in the Public Service Superannuation Fund (PSSF) programme but rather the Bermuda Tourism Overseas Pension Programme (BTOPP).

"Under BTOPP employees cash out upon termination. There is no option to become vested in a retirement plan with deferral until age 60."

More recently, in the reorganisation of the New York Tourism Office, departing employees were paid out amounts in excess of $200,000 in some cases as a result of the BTOPP programme.

This was a non-contributory pension plan wherein the Government paid ten percent of each employee's annual salary.

Government's statement went on: "Therefore any insinuation that an employee was paid off to meet some suspicious motive is completely unsubstantiated by the facts.

"The employee referenced in the report was awarded a severance package in line with a pension programme that had been in place for decades."

And the press release said it was important to note Tourism is working to phase out the BTOPP programme because of the enormous and unsustainable cost burden it places on the taxpayer.

The following areas of concern were also presented to the Auditor General in a February letter, but similarly not included in his special report, said Government:

l GlobalHue was retained as the Agency of record in 2006 and not 2004 as stated; in 2004 GlobalHue was retained on a project basis to manage a marketing programme in the Miami market for the sole purpose of launching the American Airlines Bermuda flight.

l Following a Department of Tourism Audit several years ago (late '90s or early '00s), matters regarding pre-payment for various services inclusive of the production of advertising campaigns and media billing were exempt from any conditions that prohibited prepayment. An agency contract template was prepared by the then Director of Tourism, the then Information Coordinator, Accountant General and Attorney General's Chambers.

This same contract template, with the same payment clause has been utilised in the retention of a minimum of the past three to four agencies of record without issue, said Government.

The statement ended: "It is not clear why many of the issues raised in the Ministry's February letter were left out of the final draft of the Auditor General's special report."