Government is to ask the Auditor General to expand an ongoing audit into the troubled Bermuda Housing Corporation (BHC), following allegations of corruption and grossly inflated sums of money paid out to contractors.

"If there is anything wrong, a separate forensic audit will be done," Housing Minister Nelson Bascome told The Royal Gazette yesterday. "And if anyone is caught they would have to be dealt with to the fullest extent of the law..."

When asked he said anyone found guilty of wrongdoing would lose their jobs.

"Definitely - we've already had people lose their jobs," he said referring to results of an ongoing internal investigation into the Corporation's affairs. "If anyone is found guilty of any fraud, they will be dismissed."

And Mr. Bascome issued a call for anyone with information on corruption or illegal practices at the BHC to inform him and the Auditor General in writing.

"There have been a number of persons who have come to me with accusations. And because of the current situation, I'm encouraging everyone with any information to put it in writing to myself and the Auditor General. That includes the Opposition, the public - everyone."

In a ministerial statement to his House colleagues late Friday night, Mr. Bascome said that he had met with the Premier and the Auditor General following a midday meeting of the Bermuda Housing Corporation's Board of Directors.

"At that time, having determined that the Auditor General has not yet completed his Management Control Systems audit of the Corporation, I asked the Premier if she would request that the Auditor General go further and conduct a full audit of all aspects of the Housing Corporation's financial operations and expand the audit.The Premier has agreed and will follow up the request in writing," he said.

"Mr. Speaker, this House and the Bermudian public can be assured that every effort will be made to conclude this investigation as soon as possible. Further, to ensure that the public is kept fully informed of the outcome, the Auditor's report will be made public... For the record, let it be known that this Government will not tolerate any illegal activity. Should any wrongdoing be uncovered by the Auditor General, he will not hesitate to turn the information over to the proper authorities."He added : "I think it important to note that to date the Auditor General reports that he has found no evidence of wrong-doing."

The Mid-Ocean News published BHC documents Friday showing painter Paul Young had received over $800,000 from the Corporation over a seven month period last year.

Another BHC contractor, gardener Caven Richardson, had received close to $70,000 over a three months period and Borden's Carpentry received 28 cheques totalling $487,193 between May and November last year.

The report contained allegations from unnamed sources that BHC routinely paid out on "inflated bills", and follows a call made by Opposition MP Michael Dunkley for an independent investigation into BHC operations.

Mr. Bascome said the matter is of "real concern" to him and Premier Jennifer Smith.

Asked whether the whole affair could boil down to gross incompetence, he said : "I don't think this is incompetence, I think these are people with illegal practices." And he said he was confident that the BHC would continue with its mandate of providing affordable housing for Bermuda.

"That is their mandate and it's not going to stop them from continuing with the job at hand...

The Premier made sure that the auditor knew that we are very serious about getting to the bottom of any of these accusations and making sure that the proper thing is done."

He reminded The Royal Gazette that he had previously stated on the floor of the House that "we knew that there were issues at the Bermuda Housing Corporation and one would have known that we are and we continue to be very vigilant in making sure that any impropriety would be dealt with as we have with the cases that have come to light."

Asked whether any measures have been taken to prevent anyone tampering with BHC documents, Mr. Bascome said that, so far no one had tried to deny the auditors access to records and the Auditor would put the necessary measures in place.

"The challenge for the auditor now is to go beyond his normal audit - which means he now has to match things up with receipts."

Auditor General Larry Dennis said yesterday that he expects to receive formal instructions to conduct an investigation from the Premier today.

No measures have been taken to secure documents from tampering, he said. "This is not an investigation yet - if we find the information that shows an investigation needs to be done we'll take the appropriate steps. I've met with the Premier and I am supposed to have formal instructions tomorrow."

He said he had no power to have staff suspended, but "I can certainly make recommendations.""I will request the Police involvement if circumstances indicate."

Mr. Dennis added that he left the meeting with the Premier confident that she wanted to get to the bottom of the matter and that he would have Government's full support.