Auditor General Larry Dennis has recommended that two major Government health insurance funds be contracted out if they can't be brought up to date.

In his latest hard-hitting annual report to Parliament, Mr. Dennis voiced concern about the Government Employees Health Insurance Fund (GEHI) and the Hospital Insurance Fund (HIF).

He said financial reporting on the GEHI was four years behind because of poor record keeping and missing documents with management being inordinately slow to issue the last items of information.

With weak procedures there was a risk of fraud warned Mr. Dennis who noted a claims assessor misappropriated nearly $160,000 from the GEHI in the period up to mid-2003.

Mr. Dennis said: "The lack of accountability provides little comfort to the House that misappropriations are not continuing."

He said management had explained that documents needed to support medical claims paid during 2003 which totalled $25.6 million had been sent unlabelled to the Government archives and could not now be retrieved.

"They cannot even determine the archive location to which the boxes were sent."

The situation for 2004 was little better with documents only able to be located for a few of paid claims totalling nearly $30 million.

Mr. Dennis asked: "How did GEHI expect to access the information if it hadn't labelled the boxes?"

He said staff turnover meant there was no one still around to provide explanations.

GEHI's financial statements had been late since the mid 1990s leading to qualified or denied audit evaluations, said Mr. Dennis.

"If anyone seriously believes that the current management and administrators can resolve the operating and accountability problems besetting GEHI, they are indeed optimists."

He said Parliament must have been tired of the litany of excuses spanning 15 years.

Mr. Dennis recommended the Ministry of Finance set a deadline by which time the annual financial reporting should be up to date.

"If that deadline is not met, the Fund's administration and accounting should be contracted out to a service provider."

In response, the Ministry of Finance said it was closely monitoring the situation and would ensure the problems were solved.

Mr. Dennis listed similar problems and the same possible solution for the Hospital Insurance Fund which he said was beset with inefficiencies and delays.

Again Government pledged to deal with the situation.