A Housing New Zealand staff member has been suspended on full pay while they are investigated for allegedly taking bribes from prospective tenants.
The corporation says it began the investigation in January after being told a worker was seeking money in return for preferential treatment for people who wanted a state house.
Housing New Zealand says it has information that some tenants in Auckland may have been housed with greater priority than their circumstances warranted, and that money may have been paid to intermediaries in the community.
Housing New Zealand chief executive Lesley McTurk says the allegations are extremely serious.
"We are talking about the potential exploitation of vulnerable tenants and it's a completely unacceptable situation to have any abuse of the system of allocation of state houses."
Dr McTurk told Checkpoint indications are that the case is an isolated incident involving one employee.
The corporation will decide whether to hand the matter over to police after it has completed an internal investigation in the next few weeks, if not sooner, she says.