A former top Education Department official asked primary schools to pay thousands of dollars for alcohol and coffee machines to dodge public scrutiny.
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A public anti-corruption hearing was told Jeff Rosewarne, the department's ex-acting secretary, arranged a false invoice for food and alcohol to be sent to Moonee Ponds West Primary School rather than the department directly.
The school paid $6820, which was spent on a Christmas party at a bowls club for senior department officials in 2009.
Mr Rosewarne told the Independent Broad-based Anti-corruption Commission hearing that invoicing schools meant the department could avoid disclosing the purchases if the media lodged a freedom of information request. He said he believed the Moonee Ponds West PS was later reimbursed.
Mr Rosewarne, who now works for the Catholic Education Office, is currently on leave.
Tuesday's hearing was told Mr Rosewarne's former wife was also paid to provide catering services through a false invoice.
On a separate occasion Mr Rosewarne had dozens of bottles of wine delivered to his home that he stored in his garage.
He said the wine was later used as gifts from the department and also drunk by department officials.
A delivery of 24 bottles of wine was also made to another former department official, Nino Napoli, who was sacked this week.
The wine was bought from the son of Chandler Park Primary School principal Peter Paul.
On Tuesday it emerged Mr Napoli had also acted as accountant for Mr Rosewarne. The pair travelled overseas together on work trips funded by the department but Mr Rosewarne did not file a report on a 2009 trip to London nor could he recall who the pair met there.
While working for the department Mr Napoli had been in charge of a $4 billion education budget.
On Tuesday the corruption hearings into the Education Department also revealed Mr Rosewarne had asked another primary school to pay for two coffee machines totalling about $5000, one of which he used temporarily at his home.
He paid for the machines with a credit card that belonged to Brighton Primary School and used a fake invoice.
Mr Rosewarne said the coffee machines were later returned to the school although he could not recall if the school was reimbursed.
On Monday it emerged that relatives of Mr Napoli also paid for a birthday party for Mr Rosewarne.
In his opening statement on Monday counsel assisting IBAC Ian Hill said Operation Ord investigating the Education Department began in September 2013 as a result of information received by the commission.
He said an audit and review of the so-called banker school system conducted in 2010 found governance and controls around banker schools were "wholly inadequate" and opened the department to risks including fraud.
Banker schools were used to distribute funds.
The total value of "suspicious transactions" involving entities and individuals associated with Mr Napoli is believed to be about $2.5 million so far.
The money obtained through banker schools was allegedly used for office furniture, conferences at resorts, domestic and overseas travel.
In the coming six weeks more than 50 witnesses are expected to be examined in the public hearings.
