Auditor General Heather Jacobs Matthews has questioned the “tone at the top” of Government after uncovering two instances of the misuse of public funds and being refused information to fully investigate them.Mrs Matthews revealed in a scathing report released yesterday that tens of thousands of taxpayer dollars were used to pay for the private legal fees of former Premier Ewart Brown and Deputy Premier Derrick Burgess, when the latter was Works Minister.When the Auditor tried to obtain information about the sums spent, she was denied access and told by the Ministry of Justice that the “funding of this action was justified as being for a government purpose”.Mrs Matthews also detailed how the publicly funded Bermuda Land Development Company (BLDC), which Mr Burgess was responsible for, paid $160,000 in consultancy fees to the chairman and deputy chairman of its own board, despite being warned more than once of a potential conflict of interest.The Auditor asked for but was not provided with written contracts regarding the consultancy services.Mrs Matthews said yesterday: “The issues discussed in this report involve elected officials and senior civil servants at the highest levels.“Although the amounts at issue may not be seen as significant, these misuses cause me to question the ‘tone at the top’ and whether Government officials at the most senior level will do the right thing.“Both issues indicate a complete disregard for the concept of good stewardship of public money. I continue to be amazed by the lack of awareness of, or the lack of commitment to, good governance.”Premier Paula Cox insisted last night that the legal case on behalf of Dr Brown and Mr Burgess was a “legitimate action in the public interest,” the funding of which was “justified as being for a government purpose”.Government stopped paying the law firm in question on behalf of the two Ministers last September, following Mrs Matthews’s complaints.Transport Minister Mr Burgess, meanwhile, claimed the actions of the BLDC board were “entirely legal”, alleging: “It seems as if Mrs Matthews is on a personal witch hunt and to suggest that any wrongdoing took place is outrageous and clearly an attempt to malign the integrity of those implicated in her report.”The Special Report of the Auditor General on the Misuse of Funds, dated December 2011, will be tabled in the House of Assembly when it reconvenes next month.Governor Sir Richard Gozney said yesterday he had no comment.“I think I should leave the Assembly to give the first reaction, especially as they will be back in session quite shortly,” he said. “While it may be tempting to comment now, ahead of the Assembly, I think that would not be quite right.”Opposition leader Craig Cannonier said: “This is a deeply troubling report because it reveals elected and senior officials working the system to move public money into private hands, regardless of rules designed to prevent such abuses.”Kim Swan, elected as a United Bermuda Party MP, said: “During a time when Bermuda as a country is reeling economically, this latest debacle is beyond disturbing.“It clearly undermines the confidence of government and calls into question the proper protection of the public purse our country requires and deserves.”The Auditor General explains in her report how the legal case involving Dr Brown and Mr Burgess arose after two cheques purporting to be payments to the Cabinet Ministers, in relation to the new police and court building, were discovered in the files of the Works Ministry.The cheques were found to be fakes and police investigated the matter, including the possible involvement of a Canadian architects firm, but decided not to lay criminal charges.Mrs Matthews discovered last April that a legal case had been launched in Canada on behalf of Dr Brown and Mr Burgess, seeking $4 million in damages from a Canadian architect and a Bermuda Government employee for defamation and conspiracy.Cabinet approved the engagement of a Canadian law firm to handle the case and the company was paid more than $31,000 by taxpayers.In her report, the Auditor General states: “I cannot comprehend how a personal legal matter could be justified by the Government and its legal adviser (the Attorney General) as a legitimate Government matter to be funded out of the public purse.”She adds: “In my opinion, this entire situation is deplorable and represents a blatant disregard for the public purse and a lack of transparency and accountability at the most senior levels of Government.“The question to be asked is who will be held accountable? The answer is likely to be no one!”Mrs Matthews said the fact relevant information regarding the legal expenses was withheld by Government, on the grounds it was legally privileged, caused her “serious concern”.The independent Auditor warned that restricting her access to information was a criminal offence under the Audit Act 1990 and that any further denials of access would be brought to the immediate attention of the House of Assembly and the public.She said: “I will also recommend that those individuals who have infringed on my right to information be required to appear before the Public Accounts Committee.”Ms Cox said in her statement last night: “The Attorney General is fully satisfied that the Auditor General has had access to and has received all information to which she is entitled in relation to the funding of this matter.”She added that the funding of the legal case in Canada “was, in the judgment of the Government, an appropriate course to follow in the interest of the Government, the country and Bermuda’s international reputation”.“These very serious allegations of corruption made against the then serving Premier of Bermuda as well as a present senior Minister, went to the heart of Government and therefore the funding of this action was justified as being for a government purpose.”Ms Cox said Government ended its agreement with the Canadian law firm in September last year. Dr Brown and Mr Burgess are still pursuing the case in Canada.In relation to BLDC, the Premier said “changes and corrective steps” had been taken to address “apparent deficiencies and to enhance processes” since 2010.She said she commissioned the public accounting firm KPMG to conduct a review of BLDC governance and internal controls, including its procurement policy, its financial procedures and payments made to Saunders Maintenance Ltd.The Auditor General raised the alarm about the consultancy payments to BLDC chairman Edward Saunders and deputy chairman Leroy Bean, prompting Finance Minister Ms Cox to recommend that the pair repay their fees to the quango.Ms Cox also recommended Mr Saunders and Mr Bean, who have yet to return the funds, be removed from their posts. They refused to step down and, Mrs Matthews noted, Mr Burgess “took no action in that regard”.BLDC was removed from the Deputy Premier’s control by Ms Cox in April 2011, when the entire board was disbanded and delegated responsibility was given to the Environment Minister.Dr Brown did not respond to an e-mailed request for comment from The Royal Gazette yesterday. Mr Bean did not respond to e-mails and phone calls.Asked over the telephone about his time as BLDC chairman, Mr Saunders said: “I don’t choose to comment” before hanging up.Auditor General Heather Matthews has previously condemned a lack of oversight in Dr Brown’s former Tourism and Transport Ministry and reflected that she believes no one has the fortitude to punish government officials who fail to comply with proper financial procedures.