A former senior Victorian education department official in charge of a botched IT system called Ultranet has been accused of diverting funds from other projects to hide a $60 million cost blowout.
Others are accused of purchasing shares in the company awarded the Ultranet contract, and they could be hauled back to Melbourne from Saudi Arabia to front anti-corruption hearings.
Previous estimates put the Ultranet project costs at $180 million, but counsel assisting Ian Hill QC said in his opening statement to the Independent Broad-based Anti-corruption Commission on Monday the figure could be as high as $240 million.
That figure was confirmed by a covert recording of a drunken conversation between former department finance manager Nino Napoli and then School Governance Australia's managing director, Graham Lane, in November 2014.
During their phone call, Mr Lane tells Mr Napoli that deputy secretary Darrell Fraser had diverted funds from other projects to cover the blowout.
IBAC's inquiry is investigating past and present senior education department bureaucrats involved with the computer project, which was scrapped in 2013.
The online platform rolled out to state schools in May 2010 was to link teachers, students and parents, but it was rarely used because of technical issues that plagued it from day one.
Mr Hill said IBAC believed top ranking education officials used their positions to benefit from the project.
Some had taken consulting roles with CSG, the company awarded the project tender.
Mr Hill also questioned whether $1.4 million spent on a day-long presentation to principals and assistant principals, that included live singers, was a proper use of department funds.
The Connections 2010 Big Day Out on August 9, 2010 was an opulent attempt to get staff onboard the program despite its numerous technological glitches, including one that crashed the program the day before the presentation, Mr Hill said.
In a video of the presentation shown to the hearing on Monday, singers perform Madonna's song Material Girl with a few changes to the lyrics.
"We're living in a virtual world and I am an Ultranet girl," they sing.
Five staffers linked to the project now work as education advisers in Saudi Arabia.
The hearing will continue on Tuesday.
