The Auditor General, Heather Jacobs Matthews, has launched an audit into the 2009 amendment to the Coco Reef lease.

And United Bermuda Party Members of Parliament welcomed the decision, stating several issues raised in the 2004 Special Auditor General's Report on the original lease have not been addressed in the amended version.

Both Opposition parties also welcomed Mrs. Jacob Matthews' statement that contrary to the Government's position she believed the lease is subject to Parliamentary oversight.

Yesterday Mrs. Jacobs Matthews said after a "preliminary review" of the amended lease, which was signed between the Board of Governors of the Bermuda College and Coco Reef Resorts Limited on May 4, 2009, she had decided to conduct an audit. The amended lease was only made public eight days ago and extends its lease from 50 years to 125 years.

She added: "My report on the audit, once tabled in the House of Assembly, will be made available to the public."

Veteran UBP MPs John Barritt and Grant Gibbons have been calling for the amended lease to be made public for the last several months.

Speaking on behalf of both of them, Mr. Barritt said yesterday: "We are not surprised by the decision of the Auditor General for two reasons. "One [reason is] the resistance the Government and Board put up to disclose and answer questions about the lease, until last week's disclosure, and that disclosure was done begrudgingly judging by the Minster's statement," he said.

"The second reason we think its important is in light of the 2004 Auditor General's Report. There were a number of outstanding issues that needed to be addressed.

"We expect the Attorney General wants to review them.

"On a preliminary review of the amended lease two things jumped out that have not been addressed." [See side panel].

Mr. Barritt referred to the first audit, done by former Auditor General Larry Dennis in 2004. It was launched after former Elbow Beach managing director John Jefferis won the Government tender to manage the Paget hotel property in 2002 and then renegotiated the terms, doubling the length of the lease from 21 years to 50 and reducing the amount of rent he was to pay.

In Mr. Dennis' special report he called for the lease to be retendered because it was "considerably more beneficial" to Mr. Jefferis than the tender document specified.

Yesterday, Mr. Barritt added he hoped the Auditor General would also investigate if a professional land valuation had been done before amendments to the lease were made. He said a valuation would have examined the current price of the land and the projected price of the land once Mr. Jefferis has built 66 leaseback condominiums on the property. Mr. Jefferis was granted a Special Development Order to build the condominiums; he plans to break ground this year. Mr. Barritt said a valuation would show if the rental tiers put in place in the 2009 amended lease are reflective of the value of the land.

Both Mr. Barritt and Dr. Gibbons as well as Bermuda Democratic Alliance leader Craig Cannonier said they were pleased the Auditor General said the lease comes under parliamentary scrutiny.

Yesterday, Mrs. Jacobs Matthews said: "The Bermuda College is a Government-controlled organisation and as such is included in the Public Accounts of Bermuda. Its affairs, including the lease of its property to Coco Reef Resorts Limited, are subject to Parliamentary oversight."

Her view went against the opinion of Education Minister Elvin James and Board Chairman Walton Brown. They believe that because the Board, and not the Government of Bermuda own the land, it is not part of an existing law that requires Parliament to approve any lease of Government land for more than 21 years

Mr. Barritt said: "We are encouraged by the comment the Auditor General made in that she said the Board is subject to Parliamentary oversight. That is the very point we have been making regarding the lease."

Mr. Cannonier said: "Yesterday's media release from the Office of the Auditor General demonstrates just how wrong the Government's position on disclosure was."

He said his party has been calling for the disclosure for months and added: "It is clear that the Government has not learned any lessons from past deserved criticism of the Coco Reef lease. Given the Government's conduct to date we will watch carefully how the Public Access To Information Bill is implemented once it eventually passes in the House of Assembly."

Yesterday Board Chairman Sen. Brown said: "We welcome this review by the Auditor General. As an institution which receives most of its funding from taxpayers we recognise taxpayers have a right to know the institutions they fund are making decisions in the public interest. We are confident that our decision to extend the Coco Reef lease to help strengthen and reposition our tourism product will be supported by this review."

Mr. Jefferis did not respond for a request for comment.