A portion of the agreement the whistleblower was asked to sign.

A portion of the agreement the whistleblower was asked to sign.

A former civil servant was gagged by Housing New Zealand Corporation bosses after alleging serious accounting problems involving millions of taxpayer dollars.

Housing Minister Chris Carter has called for urgent explanations from the agency after being told of a Herald on Sunday investigation into the handling of the allegations.

He has called a board meeting tomorrow and issued a reprimand over the involvement of corporation chief executive Helen Fulcher and senior executive Gerard Coles in gagging a whistleblower.

On Friday evening, Housing NZ Corporation admitted to the Herald on Sunday it was a mistake to ban a public servant from taking the allegations to government ministers.

Board chairman Pat Snedden also confirmed the corporation would call in external auditors to review its books - although Mr Carter has signalled wider inquiries.

The whistleblower, who held an executive position at HNZC, has told the Herald on Sunday that:

* accounting of taxpayer money was being "manipulated" so programmes "come out on budget"

* a senior manager in Housing NZ is aware of the accounting "manipulation" and is "encouraging it"

* management reports supplied to Mr Carter are "untrue"

* there is deliberate lack of scrutiny over invoices being sent to one particular division of the corporation

* overspending of $2.1 million of taxpayer money was hidden and reintroduced in a later period when additional funds were available to balance the books, with accounts falsified to appear on time and on budget.

The whistleblower will not be named - but said he would be identified if called before a parliamentary select committee to give evidence.

"I believe the public have a right to know," he said.

The allegations are among the most serious against a government agency since Labour came to power in 1999.

A spokesman for Mr Carter said the minister wanted an assurance from the agency's board that the Government could have confidence in its financial reporting.

"The Minister is calling the board in on Monday for a full report on these allegations and how they've been dealing with them.

"He does not believe it is appropriate for the confidentiality agreement that the allegations refer to, to prevent members of the public raising concerns with MPs or Ministers," he said.