A culture of entitlement, coupled with systemic flaws, invited senior Victorian Education Department officials to splash taxpayers' money on wine, parties and holidays.
They are some of the allegations aired during a six-week Independent Broad-based Anti-corruption Commission hearing that wrapped up in Melbourne on Tuesday.
Investigators claim now-sacked department finance manager Nino Napoli was the mastermind behind a scheme involving a "boys club" of top department staff.
These officials allegedly organised for bills to be sent to so-called "banker schools" and the schools would pay the invoices, often for items they did not receive.
Suspended Chandler Park Primary School principal Peter Paul told IBAC he trusted Mr Napoli, so didn't question his school being billed almost $30,000 for wine.
Companies linked to Mr Napoli and nine of his relatives allegedly received more than $2.5 million from Victorian schools between 2007 and 2014.
One businessman Daniel Calleja said he invoiced schools at the direction of Mr Napoli, his distant cousin.
He was then allegedly instructed to transfer the school payments to other businesses linked to Mr Napoli.
Mr Napoli was earning $200,000 a year, overseeing an executive budget of $1 million and delivering $5 billion worth of school infrastructure projects.
He admitted to directing false invoices to schools to avoid being caught out by his bosses.
But the admission followed an alleged scramble to hide the rort, with covertly recorded conversations revealing attempts to get others involved to lie.
Regional director John Allman admitted to tearing up paperwork and throwing it in a Bunnings bin.
Keilor Heights Primary School principal Michael Giulieri said he crafted a fake paper trail and backdated it 10 years to help his "so-called mate" Mr Napoli.
Mr Napoli, Mr Allman and Mr Giulieri all have been sacked.
Department secretary, Gill Callister, on Tuesday said the banker school system had been stopped, and the department was working to retrieve about $5 million in facilities around the state.
The department has sought independent advice and will conduct an audit of all schools mentioned during the IBAC hearing.
Ms Callister, who has been in her role for six months, said an integrity division to assist whistleblowers would be implemented.
A public report will be released in 2016.
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