Premier Ewart Brown yesterday had to defer a bill improving oversight of Government policies and programmes after Opposition MPs complained it didn't go far enough.

In the morning, the Premier had introduced the Internal Audit Act, which sets up a new Internal Audit Department to provide an overview of the managing and cost of all Government activities to ensure there's no wrongdoing.

However, in the afternoon he asked the House to "rise and report progress" following complaints from the United Bermuda Party and Bermuda Democratic Alliance that the legislation didn't give enough independence to the overseeing team. No PLP MPs spoke out against yesterday's legislation.

Dr. Brown told MPs Government had some concerns after listening to the debate and conceded the legislation needed to be redrafted. The last time Dr. Brown made the rare move to "rise and report" was over the controversial cruise ships gaming bill when he was threatened by a rebellion of Progressive Labour Party MPs.

After the debate Dr. Brown said: "We took the step today because we believe that we can strengthen the bill with respect to the composition and reporting mechanisms."

Shadow Minister for Legislative Reform John Barritt told The Royal Gazette last night: "We are obviously pleased — any time as an Opposition you can prompt a Government to rethink, you are doing your job right."

Reading the brief for the bill in the morning, Dr. Brown said the creation of an Internal Audit Department would give people reasonable assurance that "persons entrusted with public funds carry out their functions effectively, efficiently, economically, ethically, equitably and in accordance with the law".

Dr. Brown said the legislation — hot on the heels of his pledge to bring in retroactive Public Access To Information laws — shows Government is "leading in the area of good governance and efficiency".

Currently, internal auditing is done directly through the Accountant General, with reporting responsibility to the Financial Secretary — creating a conflict of interest when reviews are performed for the Ministry of Finance.

The Premier said accounting firm Ernst & Young had helped carry out a risk assessment and recommended the internal audit function should become its own separate department.

"There are some observers who have questioned the need to create another Government department during a period of economic stringency," said the Premier.

"I am sensitive to those concerns but I would urge Honourable Members and members of the public to weigh the dividends that efficiency in the public service can yield.

"In this case, the establishment of this department of Internal Audit is a worthwhile investment and one which strengthens our public service and adds to the confidence that citizens should have in their Government."

However, the UBP and BDA both complained that the Cabinet Secretary will be the chairman of the Internal Audit Committee.

Former Finance Minister Grant Gibbons said the bill was flawed in concept because, with the committee chair being the Cabinet Secretary, it would be like "Caesar reporting to Caesar".

BDA MP Shawn Crockwell said his party had shared the legislation with auditors in the private sector, who had highlighted similar concerns.

"People say the intent is good, but they could not understand how the structure is going to be effective," said Mr. Crockwell.

Responding to a suggestion from Energy Minister Michael Scott that the civil service and Cabinet Secretary are apolitical, Mr. Crockwell said: "They were not concerned about a political affiliation ... they said it needs operational and administrative independence.

"How can you have a head of a department investigate himself? We live in the real world. The real world is that people have personal relationships in organisations and departments which can compromise an agenda."

Shadow Finance Minister Bob Richards said tougher legislation was needed because of the many millions of dollars he claimed had disappeared in projects such as the Dockyard terminal, TCD building, court building, Berkeley building and Coco Reef.

"You can easily count overruns in excess of $100 million in these capital projects," he said.

"I can't argue with the intent of this act, but if it's merely to codify what already exists on the ground — an already broken system — then we can't go along with that.

"We need to have pointed out to us how we are going to have an improved system." Mr. Richards said this is particularly important in the current climate, when "Mother Hubbard's cupboard is already bare" and "we must make sure that every crumb is accounted for".

Finance Minister Paula Cox said the bill showed Government was committed to accountability, responsibility and answerability.

UBP MP Charlie Swan and Opposition Leader Kim Swan both spoke to suggest the Auditor General's ability to do her job effectively is compromised by a budget and staff which has hardly changed in ten years, in spite of huge increases in Government spending the auditor has to oversee.

Minister Derrick Burgess said he was in favour of the bill noting that the intent was right. He added that if anyone tried to interfere with the internal auditors' investigations it was up to the auditors to report it.

Opposition MP Patricia Gordon-Pamplin said the aim of the bill was correct, however it did not seem practical.

Mrs. Gordon-Pamplin said the make-up of the committee — with the Cabinet Secretary in charge — was like "the fox ruling the hens".

She added that it was imperative the civil service realised money allotted to various departments was not the department's money, the Minister's money or the Permanent Secretary's money at stake, rather it was the public's money that must be guarded.

She also questioned if the internal auditor's recommendations would be listened to, noting that some queries and concerns raised by the Auditor General, who makes his comments public, have not been followed up.

Premier Brown then stood and thanked the House for the "potpourri" of recommendations and comments in particular those by Opposition Finance Minster Mr. Richards who said: "We are generally pleased with this bill".

He added that the former President of the Institute of Internal Auditor's in the UK and Ireland had been following the bill closely and said he believed it could be a blueprint for the rest of the Commonwealth.

And he added: "The Director of Internal Audit is appointed by the Governor, that should really be comforting to many members of this House."

But he concluded with: "After listening to the debate this morning and afternoon the Government has some concerns so I am asking that we rise and report."

The bill was adjourned.