AUDITOR General Larry Dennis has been thrust into the headlines this week, following his report on the capital project at the Berkeley Institute Senior School. Comments from various quarters have suggested that the Auditor General's role may not be well understood throughout the community, even though he fufils a crucial balancing role in the operations of Government.

The office of Auditor was established in the Bermuda Constitution of 1968. The Auditor General, as the office is now referred to, is appointed independently of Government by the Governor. The Auditor's job, in essence, is to act as a watchdog on behalf of the people of Bermuda, to ensure that their money is being spent wisely. Since the Governor appoints the Auditor, only the Governor may remove him.

A question asked by one politician this week was: "Who audits the Auditor General?" The answer is provided in the Rules of the House of Assembly: "There shall be a Select Committee to be known as the Committee on the Office of the Auditor . . . a Standing Committee appointed for the duration of the life of Parliament . . . consist(ing) of five members . . . (which) shall have the duty . . ." of monitoring the work, fees and behaviour of the Auditor General and his staff.

That committee is not as yet fully funded, which is a decision for Government.

IN Bermuda, the Auditor General has two main responsibilities. One is the regular audit of Government's financial statements and those of its subsidiary entities. In this capacity, the Auditor General serves much like the external auditor of pub lic companies, who act to protect the interests of shareholders. A government has no shareholders, but its equivalent is the public.

The Auditor General's other chief responsibility is to produce special reports when circumstances demand. The goal, broadly, is to see if the Bermudian people are deriving value for their money. Press reports suggesting that a project had gone awry, or information given directly to the Auditor, would be grounds for mounting such an investigation.

This second responsibility can be more controversial, since the audits are likely to be carried out on projects that are not running according to plan. Governments, of whatever stripe, do not enjoy criticism, nor do they usually like their shortcomings made public, especially when things are going astray.

This is why the independence of the Auditor General is enshrined in the Constitution. He serves a higher interest than even that served by governments. Anything that weakens his independence strikes at the very heart of democracy, which can be a fragile flower at the best of times.

In 1990, the Government of Bermuda passed The Audit Act, which carefully lays out the Auditor General's responsibilities. The Act spells out which audits shall be undertaken and how they should be completed. The Auditor General thus has a set of rules that he must follow. Traditionally, the Auditor General makes recommendations, based on his prudent accounting experience, for ways of improving such shortcomings as his audits may reveal. No administration is perfect; there are always better ways to do almost anything. The Auditor's recommendations are sometimes based on law, where its requirements are not being met, and at other times are based on his experience.

An independent and unfettered Auditor General is one of the highest demonstrations of democratic principles in any society.

In Bermuda, Larry Dennis, the present incumbent, has acted in this capacity since 1978, making him the longest-serving Auditor General in the British Commonwealth.

ROGER CROMBIE