Government deserves credit for attempting to meeting and resolving some of the longstanding problems that Auditor General Larry Dennis has uncovered about Government's approach to accounting and protection of the public purse.

The embarrassing situation of Government audits being years overdue is now largely resolved and given the past record, the release of the Audit some 14 months after the end of the financial year is quite credible.

But that does not mean that Government should be complacent about the quality of its financial management; a close reading of the Auditor General's report reveals a frightening number of "pockets of sloppiness" within Government.

One is the Bermuda Hospitals Board where a combination of ever increasing medical expenses and poor accounting procedures is draining the public purse. Mr. Dennis' account of how $300,000 was thrown away on useless laundry equipment is just one example of how hopeless the board's financial control has been in the past.

Another area is the weakness of Government tax collection procedures towards employers who deliberately fail to turn over pension contributions or to pay payroll and land tax. The slow approach to collecting overdue taxes, combined with the feeble penalties which can be applied against errant employers means that there is virtually no penalty for dishonest employers. In the meantime, employees and honest employers suffer, as does Government.

The third area of concern in the Auditor's report is in the now infamous Bermuda Housing Corporation.

The audit conducted last year revealed that controls within the BHC were already collapsing in the 2000-2001 financial year. The vast majority of $1 million in financing for the restoration of derelict and vacant homes was lent without any form of security or even written agreements. Aside from the extraordinary financial risk that the BHC was taking with the public's money, this lack of documentation is a virtual invitation to the corrupt to steal.

What is disappointing is that these problems have taken more than a year to be made public; some of the subsequent problems revealed about the BHC might have been avoided if these issues had been caught 12 months ago, as they should have been. Somewhere in the Government, alarm bells should have been ringing long before the media came across the problems.

These disparate areas have one thing in common; lack of effort in the collection of taxes and sloppy financial controls all mean that the honest taxpayer ends up paying more. In a Budget of hundreds of millions of dollars, the waste of $300,000 at the hospital or the fact a company went bankrupt owing $100,000 in payroll tax and so on that will never be collected now may not seem to be a major disaster on its own.

But when these "pockets", as future Finance Minister Eugene Cox described them in the 1998 Election campaign, are put together, they start to look like real money -- millions of dollars worth.

Indeed, Mr. Dennis said that at March 31, 2001, $25 million in land tax, payroll tax and social insurance payments were more than 90 days overdue. That is $25 million that Government now has to find from somewhere else, at least in the short term. Added to the waste uncovered elsewhere, this means that the honest taxpayer will end up paying more in the future.

Mr. Cox needs to commit his Ministry to closer control of spending and quicker and more aggressive collection of taxes owed by companies and individuals. In that way, he will be able to boast of a truly efficient Government.