Family trips on the Manly ferry and to the cinema were expenses former NSW RSL president Don Rowe was allowed to rack up using the charity's money, an inquiry has been told.
Councillors of the state league understood Mr Rowe, who lived in Armidale, could use the charity's funds to "sustain himself" while in Sydney for business, the charity's former treasurer Rod White says.
"The expenditure of funds was somewhat at his discretion," Mr White told the public inquiry in Sydney on Thursday.
"I understood his day-to-day living would be paid."
This included toothpaste and entertaining his family while they visited or stayed with him in Sydney.
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"There was an understanding he may have been and was contributing to the sustaining of family members while in Sydney at various times," Mr White said.
It was up to Mr Rowe to decide what was ethical and proper and where to draw the line.
"It's at their discretion ethically and legally," Mr White said.
The public inquiry led by Patricia Bergin SC was set up by the NSW government after the misuse of the charity's funds became public.
Mr Rowe revealed to the inquiry two weeks ago he used the charity's cash to pay for his mortgage, family phone bills, flights, meals and accommodation at a Sydney hotel during his 11 years as president.
He also admitted the reason behind his resignation in November 2014 was because he received an ultimatum from Mr White to either quit or face an audit into his expenses.
But, at the time of his resignation he cited ill health as the reason.
The same reason was given by Mr White in his evidence on Wednesday.
But on Thursday Mr White admitted he did deliver an ultimatum to the then-president - he just forgot about it until he was reminded by counsel assisting Anthony Cheshire SC.
"Until you reminded me this morning, I didn't recall the ultimatum," he said.
"I did say to him I'm fed up with this ... I was very disappointed by his performance on a number of fronts and I said 'Why don't you go'."
After his resignation, an audit was carried out into Mr Rowe's expenses, but it only went back a year.
Mr White said he was committed to getting the charity's money back but it wasn't up to him to refer the matter to the police.
The inquiry continues on Friday.
