Police have completed a five-year investigation into the use of $700,000 of taxpayers' money handed to former Berkeley Institute contractor, Pro-Active Management Systems.

Auditor General Larry Dennis yesterday confirmed the inquiry has finished, although Police would not reveal if the file has been sent to the Department of Public Prosecution and e-mails to that office were not returned. The $700,000 had been intended to pay for a performance bond, a necessary insurance covering ten percent of the cost of a project should it fall behind, go over budget or not be completed.

In 2002, Mr. Dennis sounded alarms, claiming that the Ministry of Works & Engineering had failed to provide a receipt proving how the money was spent and that Cabinet awarded the contract to Pro-Active before a bond had been secured, despite the fact that it was a prerequisite of the job.

The bond was eventually posted by Union Asset Holdings Ltd., a subsidiary of the Bermuda Industrial Union (BIU) which was then headed by Works & Engineering Minister Derrick Burgess.

Controversy had surrounded the secondary school's construction since Cabinet awarded the project to the little-known general contractor. Its bid of $68,164,841 for the contract, was the second lowest submitted. Work began on the site in September 2001 with a projected finish of September 2003 – and a budget of $70 million.

Pro-Active was sacked as the project contractor in 2004, accused of failing to meet deadlines and cost targets.

Somers Construction was then given the key role. When the school was finally completed in 2006, it was well over budget, with a total cost of approximately $125m.

An investigation into the bond was launched following a special report by the Auditor General on the senior school's capital project, submitted to the Speaker of the House of Assembly in 2002.

Arbitration meetings between Government and Pro-Active began in 2004. Held in private, they awarded Government around $13m – Union Asset Holdings stands to pay $6.5 million of that figure. An appeal has been launched.

Results of the Police investigation into the bond document had been outstanding.

Said Mr. Dennis yesterday: "I have recently been informed that the Police investigation into the Berkeley bond has been completed.

"I shall not comment on the investigation until I release my 2008 Annual Report, sometime in the spring of next year."

Contacted yesterday, Mr. Burgess said he "didn't know anything" about the investigation and BIU president Chris Furbert did not return calls.