Police will be meeting with the Auditor General to discuss alleged fraud in the National Drug Commission.

The former Auditor General Larry Dennis' final report was released in the House of Assembly last week.

In it he said it was clear there was "an almost total absence of internal and accounting controls and board oversight" for the NDC, which was granted $20.2 million of taxpayers' money between 2002 and 2006.

He recommended a Police investigation, saying the board of directors "failed" in their fiduciary responsibility to manage the NDC affairs as they were required to do by law.

Last week's Auditor General report also revealed the NDC executive secretary "fraudulently secured" $3,290 for airfares for her relatives in 2005. It is not yet known who the individual is and The Royal Gazette has been unable to find any court hearings on the matter.

The report also stated a staff member used a Government credit card taxpayers' money — to shop at Victoria's Secret, a top lingerie company in the US. It was just one of 90 credit card payments totalling $13,000 which were "suspect as to their legitimacy".

Yesterday a spokesman said: "The Bermuda Police Service will be meeting with the Auditor General in the near future to discuss the findings of the Auditor's report released on Friday 19 February 2010, including the National Drug Commission item.

"The Bermuda Police Service will investigate formal complaints into circumstances where there is apparent criminal conduct."

It now appears that the Police did not conduct an investigation last year as the Public Accounts Committee indicated in March.

Members including Shadow Finance Minister Bob Richards, former Shadow Finance Minister Patricia Gordon-Pamplin and Progressive Labour Party backbenchers Zane DeSilva, Walter Lister and Patrice Minors then said a Police investigation into the NDC was taking place.

"Management control systems and oversight were simply not working properly, and it appears that there may have been some collusion between certain staff members resulting in fraudulent or improper purchases and transactions.

"A Police investigation was initiated as a result of the serious problems in the NDC accounts and records, including missing invoices and destroyed documents," a PAC report stated.