TORONTO - The provincial auditor general's discovery that Ontario Provincial Police diverted funds earmarked for the sex offender registry to other policing matters is "concerning, obviously,'' Premier Dalton McGuinty admitted Monday.

Auditor General James McCarter's annual report comes out Tuesday, but the Progressive Conservatives said Monday word has already leaked that the auditor found some of the $4-million annual budget for the sex offender registry was spent elsewhere.

"Where did the money go?'' Opposition Leader Bob Runciman asked in the legislature. "What other policing initiatives did it cover, and for what period of time where you failing to properly monitor and track registered sex offenders?''

McGuinty deflected most of the questions, but admitted he too had heard the leaked report about the diversion of money from the sex offender registry, which is used by authorities to keep track of anyone convicted of sex-related crimes in Ontario.

"I'm not going to prejudge the auditor general's report,'' McGuinty told the legislature. "It's concerning, obviously. We look forward to getting more details from the auditor general's report, and more importantly, the recommendations that flow from that.''

Runciman suggested the OPP diverted some of the money for the sex offender registry to pay for policing the nearly two-year aboriginal occupation of a disputed housing development in Caledonia.

"We know the OPP is faced with tremendous financial pressures; Caledonia has to be the most significant,'' Runciman said. "At last count, 124 OPP officers were taken off patrol in other areas to police Caledonia because of your failure to deal appropriately with the issues in that area.''

But Public Safety Minister Rick Bartolucci insisted police had adequate funding to cover the costs of keeping the peace in Caledonia, and said the government would wait for the auditor's report to be tabled before responding any further.

"The OPP budget has risen $155 million over the course of the last four years,'' Bartolucci said. "We will allow the auditor general to make his submission tomorrow without comment until that time.''

Runciman wasn't happy with the government's failure to respond to the report about police diverting money from the sex offender registry, and suggested it's not the kind of thing the OPP would do without prior government approval.

"I find it curious, to say the least, that they would do that without the tacit approval, at least, of the government,'' he said. "If that happened, I think it's a crime in and of itself, and I want to know who was involved in making that decision, and what impact it had on the operations of the registry.''

The auditor general's annual report will look at 13 other areas of provincial responsibility in addition to the sex offender registry, including driver exams, GO Transit, medication management at long-term care homes, the retail sales-tax program and the management of universities and hospitals.