Auditor General Larry Dennis released a special report today detailing how lax financial controls mean $6.5 million has been paid out without supporting evidence for the Police/court project — with more likely to follow.

And he questioned what had happened to the $960,000 Government forked out for a performance bond which was then scrapped.

In a hard-hitting report tabled in Parliament this morning, Mr. Dennis voiced grave concerns about the way the $78 million project in the heart of Hamilton was being handled.

He said Works and Engineering Minister Derrick Burgess had urged staff to amend a letter written by the certifying architect to say that a decision to relax financial controls was a Ministry decision, not his own.

Mr. Burgess also ordered staff not to cooperate with Mr. Dennis’ audit team — only relenting when Mr. Dennis threatened legal action.

Mr. Dennis also looked at advertising contracts in the Department of Tourism, revealing the taxpayer has shelled out around $1.8 million in overpayments to US agency GlobalHue.

And when Tourism’s director of Sales and Marketing began to investigate, he was given a massive $440,000 pay-off.

Mr. Dennis said GlobalHue were overpaying media buyers Cornerstone, who were getting markups as high as 171 percent and 186 percent.

A further investigation by auditors revealed the average markup was 51 percent, far higher than the normal agency commission of 15 percent.

And in the final section Mr. Dennis notes that Government still appears to be pushing to get the $13 million owed by failed Berkeley contractors Pro-Active, which has now risen to $15,620,000 with interest and other costs.

Government also gave Union Asset Holdings Ltd. — the Bermuda Industrial Union-backed company that provided the performance bond for the project - 14 days to pay the $6.8 million it says Government is owed under the terms of the bond in a solicitor’s letter sent in mid-January.

Mr. Dennis is due to release his annual report in the summer.

* See tomorrow’s Royal Gazette for in-depth coverage of the Auditor General’s report.