INTERNATIONAL auditing officials have rushed to the defence of Auditor General Larry Dennis who came under fire in the House of Assembly last week.

Premier Alex Scott, in what may be a first for Parliamentary leaders in Westminster system administrations, castigated Mr. Dennis for being too assertive and suggested that Government did not require a receipt for all expenditures.

But this week Jocelyn Thompson, Auditor General of Trinidad and Tobago and Secretary General of the Caribbean Office of Supreme Audit Institutions (CAROSAI), insisted that international standards dictate that " be accounted for, and that all funds in government hands are "the property of the people".

Also in support, through the Department of Communication & Information, Joyce Hayward, acting Accountant General, pointed to the rules laid out clearly in the Government's Financial Instructions, which mandate that all Government expenditures must be provable by way of a receipt, except per diem travel allowances.

Instead of complimenting Mr. Dennis for his tenacity, and for exercising his responsibilities in accordance with standard international rules of auditing, Premier Scott complained in the House on Friday that "in other jurisdictions, the Auditor General doesn't assert himself as much as this one".

Referring to previous requests by Mr. Dennis for information on the now notorious $700,000 Berkeley Institute construction bond paid to a subsidiary of the Bermuda Industrial Union, at a time when he was Minister of Works and Engineering, Mr. Scott said: "The Auditor would have you believe that there should've been a receipt."

Mr. Dennis was too modest to accept the unintended compliment that he was more assertive than his professional colleagues in other jurisdictions.

"It's not true, and when Mr. Scott was in the Opposition he never made that complaint. I don't know what the Premier would know about the assertiveness of Auditors General in other jurisdictions, but I would say that I'm certainly not the most assertive.

"I have said to the Governor, and I say to my colleagues, that I am never concerned when any Government accuses me of being assertive. My concern will always be if the Opposition of the day accuses me of not being assertive enough."

As to the Premier's comment that the Ministry of Works & Engineering did not require a receipt for every expenditure, Mr. Dennis also referred to the Financial Instructions, and to the most basic common sense and business practice.

"Any clerk in any office who pays out money knows to get a receipt, or to give one for moneys received. That comment is just for consumption by the man on the street, whom he must hope will not know the difference. Not only does the Government need a receipt for every dollar of Government expenditure, they must also prove that they got what they paid for."

Ms Thompson would not be drawn on matters relating to Bermuda's internal affairs, but did not mince her words about the importance of good governmental practices and the need for all Auditors General to impose the highest international auditing standards.

"We are bound by general international auditing standards and those set by INTOSAI, the International Organisation of Supreme Audit Institutions, based in Vienna, the body which governs all Auditors General."

When asked if the audit practices of the members of CAROSAI would or should differ from the standards laid down internationally, Ms Thompson's denial was emphatic.

"No! Not at all. That is why we have congresses, to meet and make sure that we are working along the same lines and interpreting standards the same way, and maintaining these standards."

Ms Thompson attended the CAROSAI conference in Bermuda last August, and was interviewed for local television. She remembered being asked if she was aware that there had been accusations that Bermuda's Auditor General was too aggressive in the pursuit of his duties.

"I responded that the job of the Auditor General is to help Government, and to be a tool for good governance. That is always the case, and it is why, in the constitution of Trinidad and Tobago, the Auditor General is constituted as an independent office, as it is in Bermuda.

"We are not here to take sides with anybody, but to ensure that government funds are spent appropriately and correctly, and that there is good governance."

When asked if the audit practices imposed by international standards, and by INTOSAI and CAROSAI, demanded that there be a clear and provable audit trail for all government expenditures, Ms Thompson was unmistakably assertive.

"Of course. There must be audit evidence. There must be checks and balances. We must be able to trace from inception to the end of a transaction. Whether it is a computerised or a manual system, there must be an audit trail."

Asked whether it was her understanding that international governmental standards demanded a full accounting of every dollar expended, Ms Thompson spoke forcefully and unequivocally.

"Not every dollar, is supposed to have an audit trail. It is not the property of the government, it is the property of the people of the state, and (governments) are accountable for it, because the cents add up."

Ms Thompson insisted that the post of Secretary-General of CAROSAI adheres to the Trinidad & Tobago Auditor-General's office rather then to her personally, and that at the last meeting, she intimated that Trinidad and Tobago was willing to hand over the secretariat to another SAI, but that there had not yet been a show of interest.

She accepted that it may be the type of thankless task for which there would not be a long queue of volunteers.

"It may well be, but my satisfaction is that, by doing it, I am satisfied that it is promoting good governance in the Caribbean region.

Ms Thompson was effusive in her praise of the organisation and effectiveness of the CAROSAI conference held last year in Bermuda, and stressed the quality and geographical diversity of the 60 or so participants.

"The conference was excellent. It was well organised, and if there were any flaws, I did not see them. it was very well executed, and the participants had absolutely no complaints. We were well housed at the Hamilton Princess, and well treated, and the accommodation for the conference itself was well prepared.

"We were very comfortable. The recording procedures were very efficient, and the sessions were carried out very professionally. CAROSAI has 22 members, and we had participants from about 15 SAIs, as well as observers from the big SAIs, representatives from the Auditor General of the United Kingdom and the General Accounting Office of the United States. They were there to support us."

Asked if the members of CAROSAI and the other international organisations all saw themselves as being independent of their respective governments, Ms Thompson said: "That is right. There is a great deal of fellowship amongst us. We transcend governments, because we are independent of the governments of the day."

At last year's conference in Bermuda, forensic audit specialist Michael Peer of KPMG said he believed auditors should concentrate their efforts on detecting fraud involving senior figures in organisations.

"A study in the US showed that where management is involved in fraud, the cost involved is three-and-a-half to eight times more expensive than when fraud is committed by an employee acting alone.

"Defence against corruption depended on strong procedural controls within an organisation, the eradication of unnecessary layers of bureaucracy, and a high level of awareness of the risk and potential damage of corruption."

Mr. Peer said that, historically, auditors had detected about one-third of all reported fraud. About half was discovered by anonymous tips from employees, clients, and customers. Jamaican Auditor General Adrian Strachan said that, in his experience, one of the most common forms of corruption came in the award of government contracts.

"Sometimes, contracts are awarded to people who are not properly qualified for the job and the bidding process is not carried out in a transparent or competitive basis," said Mr. Strachan, "and there are occasions when substantial cost over-runs make a mockery of the original contract price."

Mr. Strachan asserted that jobs may be given as favours to friends, either through nepotism or through political connections.

"They may be employed in jobs that are not necessary jobs, or for which they may not be qualified. They may be remunerated at rates higher than established ones. It is frustrating for auditors when we recognise cases of what appear to be straightforward corruption, which remain under investigation for a long time without anyone being charged."

Given that Ms Thompson gave an assurance that Auditors General never discuss the internal affairs of other jurisdictions, we can be certain that Mr. Strachan was not referring to the Bermuda Housing Corporation, the Berkeley Project, the Bermuda Small Business Development Corporation or the other numerous projects, quangos, boards, and parish councils which are unable to account for their revenues or expenses in a timely or accurate manner, and with a clear and transparent audit trail.

Mr. Strachan said that corruption could inhibit private investment, distort public investments, slow growth, deprive the state of resources, undermine a country's legitimacy and people's confidence in government institutions.

Quoting her Secretary General C?sar Gaviria, Organisation of American States representative Linda Fealing, underlined these views.

"Corruption is a terrible cancer that undermines the legitimacy of institutions and the rule of law."

At press time, the Premier had not responded to requests that he identify the jurisdictions in which he believes that Auditors General are less assertive than Mr. Dennis, and at what dollar level he believes that it is appropriate to account for governmental expenditure.