And the organisation?s role in dealing with the island?s drug addicts and homeless in the future was also cast in doubt after the Premier revealed that ?there are differences that have to be discussed?.

In an extraordinary statement yesterday, Mr. Scott revealed concern over how the charity was spending its annual $700,000 Government grant.

And he said his own reservations were backed up by an encounter with one homeless individual who asked not to be sent to the organisation.

Premier Scott alleged that nearly 90 per cent of Government funding for the various Salvation Army programmes was spent on staff salaries.

And he also pressed on with the claim that some Salvation Army cash was sent overseas ? an allegation already denied by the charity.

?My wife and I walk mornings and about a month ago we came across some gentleman who obviously had spent the night under that stars,? the Premier told a packed press conference.

When the Premier suggested the Salvation Army as a source of help, the vagrant said he did not want to go there.

?They expressed dissatisfaction, not with the physical plant, not with whether the ceiling had paint on it or whether the windows were pristine but it was the programme that they questioned,? Mr. Scott said.

?I won?t go into the details because it?s anecdotal and their view but the Minister has had discussions with the Salvation Army about the programmes there.?

The Premier conceded that the Salvation Army was having some success with a new programme providing life skills and tuition to homeless people. But he questioned whether such programmes were providing value for money.

?The Minister of this Government puts about $700,000 to $800,000 into the Salvation Army via grants,? he said.

?Recently, they had the Dreaming in Colour programme. I hear it is far more successful than probably the other programmes before. It provides life skills and opportunities and tuition.

?Generally, programmes such as this are run by volunteer staff. Eighty per cent to 88 per cent of money given by the grant goes into wages ? that could be going into the programme so in actual fact there is dissatisfaction with the way the programme is being run and the Minister and Major Rowe will sit down and discuss that.

?Until recently, they took ten per cent out and it went overseas. No longer I am informed is that ten per cent taken out and sent overseas but it may be taken out now as a management fee.

?Again, we would not be responsible if we didn?t judiciously manage any grant as large as three quarters of a million or more and that?s what?s happening here.

?We are looking at ways in which we might be able to expand a shelter service to more clients. Whether it is going to be run by the Salvation Army, that?s to be determined.

?The Government works with Salvation Army with clear common objectives yet there are differences which have to be discussed.?

Last night the head of the Bermuda Division of the Salvation Army, Major Lindsay Rowe, could not be reached for comment.

But Shadow Health and Family Services Minister Louise Jackson reacted angrily to the Premier?s comments.

?Frankly, I was embarrassed by what I heard,? Mrs. Jackson said.

?The Salvation Army is adored world-wide. There are countries out there hoping that the Salvation Army will go and help them.

?You can?t do the work that they do just with volunteers. You have to have professional, qualified ? and paid ? people. How can you deal with drug addicts on a volunteer basis?

?What has the Government done in the last seven years? All they have done is turn the problem over to the Salvation Army and then set it up to fail by cutting its budget in half for two years.?