The political battle over the Auditor General's latest scathing report continues to rage with Finance Minister Paula Cox claiming Government had exhibited good stewardship in its ten years.

But United Bermuda Party finance spokesman Bob Richards saying Bermuda was in real trouble and Ms Cox seemed to be in denial.

Auditor General Larry Dennis had listed a litany of problems in a report released last week on the financial year 2006-07. Mr. Dennis complained about late financial reporting, pension contributions and taxes in arrears and unaddressed audit recommendations going back as far as 1992.

He said during the past two years half of Government's entities have submitted insufficient evidence for some of the numbers in their annual financial statements to be audited and he called for financial managers to suffer disciplinary action and even be fired. On Friday Ms Cox told the House of Assembly there had been a demonstrable improvement in timely financial information across the entire public sector but she conceded more needed to be done.

She said the Consolidated Fund, which is the Government of Bermuda's main operating account, received a clean audit opinion. She added: "More than $1 billion of expenditure on current programmes and capital outlays as well as $884 million of revenue were audited and accounted for."

However, Mr. Richards said: "She made a big thing about how the consolidated fund had a clean audit. And that is fine. But if you haven't got that right we would have to throw our hands up in despair."

He said the Contributory Pension Fund and the Public Service Superannuation funds totalled more than one billion dollars but had been flagged up as having problems.

"But to have that kind of money not having a clean audit is really alarming and she had glossed right over that.

"That was the most glaring problem — pension funds of everybody who works in Bermuda and we don't get a clean audit on those funds. It's just not acceptable."

Mr. Richards said Ms Cox had listed some problems flagged up by the Auditor General which were peripheral such as the parish councils but the real problems were in the Accountant General's office.

Ms Cox told the House on Friday it was the job of the Auditor General to point out problems and deficiencies. But she said: "However, this Government, and I dare say more so than any other Government in Bermuda's modern history, has taken on the 'baggage' from previous administrations and tidied what was handed over.

"It has left this Government with more to do as a result of the sequential manner in which accounting and auditing principles must be applied, but we accept that. We have the responsibility and we are acting with a plan, with determination and in the searing heat of transparency."

But Mr. Richards hit back: "It is a joke. When I heard her say that in the House I couldn't help but roll my eyes that that excuse could still be valid. Not that it was ever valid.

"I don't believe we had Auditor General reports as scathing as this one, although we always had criticism. But to make that statement ten years down the track is ridiculous and needs to be shown as that. It's grasping at straws."

By the time an audit report is released, sometimes more than a year has passed said Ms Cox and Government had already taken action to address weaknesses or to make enhancements to financial systems and controls.

"Changes, advances and enhancements have been made between 31st March 2007 and 18th July 2008," said Ms Cox.

She added: "Even though Government considers it is performing in a credible manner and has launched several initiatives to raise the bar in financial governance, we remain open to suggestions for improvement to the stewardship of the public purse.

"The three-year plan is on track to bring the accounts under the direct remit of the Ministry of Finance up to date for the next audit cycle.

She said relevant government entities, such as parish councils, school boards and countless others were eager to play their part to rectify this problem by bringing all outstanding accounts up to date and delivering them in an auditable state to the Office of the Auditor General.

"It is not helpful to these dedicated people, who on balance volunteer their time in the spirit of civic-mindedness, to hear ill-informed and spiteful political remarks cast against them in the media."

Mr. Richards said he was disturbed the Minister of Finance continued to look at the world through rose-tinted spectacles.

"She's talking about improvements and progress, that sort of thing. I guess if you lower the bar low enough then everything looks like progress. But if you were looking at having the standards in the civil service you would expect in private industry then the performance is woefully inadequate."