Manitoba's auditor general says she was stunned to find fraudulent activity in the province's fire commissioner's office that went on for four years.

In her latest annual report, released on Wednesday, Auditor General Carol Bellringer detailed collusion involving high-ranking officials at the commissioner's office, which investigates fires in the province.

Manitoba Auditor General Carol Bellringer speaks to reporters Wednesday about her office's latest annual report. (CBC)

The audit identified more than $300,000 worth of financial irregularities from April 2007 to July 2011 and alleged that five employees received payments they weren't entitled to having.

Bellringer said documents were fabricated and, in one instance, may have been forged.

"I still cannot understand how so many people could have been involved … and it was not found sooner," she told reporters in Winnipeg.

The financial irregularities were flagged by the office's controller, but no action was taken and the employees continued to receive payments, Bellringer said.

Action was finally taken in 2011, when Jones's credit card was cancelled, according to the audit.

"They didn't have to play the same game as everybody else. There was a certain culture in the organization … that certain things could be done differently," Bellringer said.

Former commissioner fired

The five officials, including former commissioner Chris Jones, are no longer employed at the office.

The Manitoba government confirmed that Jones, who served as fire commissioner between 2009 and 2011, was one of three officials who were fired after the financial irregularities came to light.

Also fired were Justin Panagapko, who was deputy fire commissioner at the time, and Scott Ritzer, who was an emergency services officer, according to the province.

The government would not disclose the names of the two remaining officials who were implicated, since one was allowed to retire and the other was no longer working there by the time the allegations came to light.

"The auditor general didn't release the name in her report," said Dave Dyson, the assistant deputy minister who now oversees the fire commissioner's office.

"She didn't release it, and so it's in the hands of the police and we'll just have to see what the police come up with."

The case has been handed over to the RCMP, but it could be months before criminal charges are laid in the case.

Dyson said the problems at the fire commissioner's office date back to 2007, before Jones became commissioner.

"When you have senior people colluding together, I think that's exactly how these things happen at such a high level," he said.

"Combined with the collusion, it's pretty hard to stop. But we did catch it."

Dyson said new measures have since been put in place to prevent a similar situation from happening in the future. A dedicated team now tracks expense claims, he said.