I've noticed flies in my house,so I went into my basement found more flies down there,and also found mouse crap,can mouse crap turn into flies?

No, but they can feed on it, lay their eggs in it, and be attracted by the destroyed food the mice leave behind. The fastest way out of your dilemma is to kill the mice. Third generation anticoagulant baits have a wonderful desiccant action that minimizes odors in the walls.

Keep in mind mouse crap is like people crap in a lot of ways, they are byproductrs of digestion... it doesn't turn into anything living. But they both can carry a multitude of disease. Depending on where you live mouse crap can carry noravirus (amoung others) which can be very dangerous to humans. Take steps to get rid of the mice and keep them from coming back.