A top Victorian Education Department official accused of running a corrupt scheme to siphon off money earmarked for schools has been sacked.
Former Education Department financial management general manager Nino Napoli is the first scalp claimed by Independent Broad-based Anti-Corruption (IBAC) hearings into the department which began in Melbourne on Monday.
Some of the money earmarked for needy schools was used by department "big cats" to pay for a 50th birthday celebration, a Christmas party and a home office.
Counsel assisting, Ian Hill QC, said 17 companies linked to Mr Napoli and nine of his relatives received more than $2.5 million from Victorian schools between 2007 and 2014.
School funding was allocated to a number of "banker" schools, which paid invoices from companies linked to Mr Napoli - even if the school had not received goods or services.
A similar technique was used for some expenses by department heads, the hearing was told.
Brighton Primary School was invoiced $4385 for a Christmas party in 2008, and a $4587 bill was sent to Moonee Ponds West Primary School in 2009 for a home office for former department assistant general manager Jeff Rosewarne.
Emails showed a $5000 bill for Mr Rosewarne's 50th birthday party was invoiced to Mr Napoli's company and education department contractor Encino Pty Ltd, Mr Hill said.
Mr Rosewarne, the first of more than 60 witnesses expected to be questioned over the next six weeks, told the IBAC hearing he was short of cash at the time, despite earning almost $200,000 a year.
Mr Rosewarne said he had asked Mr Napoli for a loan, but couldn't recall much detail.
Mr Hill opened the hearing saying it appeared some principals and business managers at the "banker" schools either suspected or knew the payments were not above board.
"There is some evidence that certain principals and business managers received bonuses including invitations to conferences, overseas and domestic travel as well as other benefits related to their school's participation," Mr Hill said.
The Education Department said Mr Napoli's job has been terminated.
"The public deserves better than the allegations we have heard today," a spokesman said in a statement.
"Clearly, the way some people have chosen to behave is deeply concerning - and we are determined to weed this conduct out."
SCHOOLS ALLEGEDLY INVOLVED:
Moonee Ponds West PS
Kings Park PS
Norwood PS
Sale College
John Fawkner College.
COMPANIES LINKED TO NINO NAPOLI:
Quill Investment Pty Ltd
Encino Pty Ltd
Bammington Pty Ltd
RS Media Productions
RD Diamond Nominees Pty Ltd
Innovating Visuals Pty Ltd
SD Design and Print
Customer training and consulting Pty Ltd
On the ball Pty Ltd
The Four Diegos Pty Ltd.
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