AUDITOR General Larry Dennis said yesterday that his investigation into the Bermuda Housing Corporation was on schedule and his report should be completed by next week as promised - but the public may have to wait longer to hear about his findings.

Mr. Dennis has carried out a full-scale audit at the BHC at the request of Premier Jennifer Smith, following allegations of corruption made by Shadow Housing Minister Michael Dunkley and revelations of large payments made to contractors revealed by this newspaper.

Mr. Dennis said the final report would amount to some 15 pages and he said he would be ready next week to release copies to the Premier, Health Minister Nelson Bascome, whose department has jurisdiction over the BHC and the chairman of the BHC board, Valerie Dill.

But he explained why it was possible he might have to delay the release of the report.

"We are getting legal opinions right now on whether the report should be made public, because of possible legal ramifications," said Mr. Dennis.

Only when he got the go-ahead to release the report could he do so, added the Auditor General, and he said he was not in a position to elaborate now.

What is known is that Mr. Dennis passed on some of his findings to the Department of Public Prosecutions, a fact revealed by Alex Scott at a time when he was Acting Health & Family Services Minister last month.

Thus, it is possible that the "legal ramifications" could relate to a criminal investigation into the BHC by the police.

Mr. Dennis' investigation team comprised seven chartered accountants, a quantity surveyor and a painting contractor who assessed BHC contracts.

BHC general manager Raymonde Dill and finance manager Robert Clifford were suspended by the BHC executive pending the outcome of the probe.

The executive said the suspensions did not imply wrongdoing on the part of the men and had been carried out to protect their reputations and the integrity of the investigation.

The pair were replaced on a temporary basis by civil servants Richard James and Nas Jetha. Mr. James, chief architect at the Ministry of Works & Engineering, took over as interim general manager while Mr. Jetha, a consultant to the Cabinet Office, is working as interim finance manager.

The Mid-Ocean News reported in early March that painting contractor Paul Young was paid more than $810,000 by the BHC last year for seven months' work and published documentary evidence to back up the story. A gardener was also paid $68,000 for 12 weeks' work.

Mr. Young has never commented publicly on the payments and no representative of the publicly-funded BHC, nor any member of the Government has attempted to explain them.

It was later revealed that Mr. Young's wife Dale Young was a close friend of the Premier, and helped a group of volunteers to decorate her official residence, The Laurels, after the Progressive Labour Party were elected in November, 1998.

It is understood that the Opposition UBP are preparing to ask Parliamentary Questions relating to Government decorating contracts awarded to Mrs. Young. She won contracts to decorate the VIP Lounge at Bermuda Airport and some rooms in the Cabinet Office. It is understood that Mrs. Young had no formal background in interior design.

Mr. Young, who has convictions for larceny and possesion of cocaine in the US, had been on the Bermuda Stop List, preventing him from living and working on the island, but his name was removed from the list in December, 1998.

Mr. Dennis is also involved in a more routine audit of the Berkeley Institute project, another publicly-funded scheme which has been the subject of controversy in recent days.

"We had started doing a systems audit of the Berkeley project last October, but that had to be put aside," said Mr. Dennis. "We will pick it up again. The person who has just done the BHC will continue through the Berkeley project."

United Bermuda Party approved candidate Raymond Russell claimed in a sworn affidavit published this week that he understood the $70 million project was running well over budget and would more likely cost between $95-100 million.

Works & Engineering Minister Alex Scott had, without naming Mr. Russell, accused him of trying to obtain a document on the Berkeley project by illegal means and said the police were investigating the matter.