MELBOURNE, Feb 16 - The Independent Broad-based Anti-corruption Commission is investigating past and present senior education department bureaucrats involved with the Ultranet computer project that was scrapped in 2013.

The online platform rolled out to state schools in May 2010 was supposed to link teachers, students and parents.

But it was rarely used because technical issues plagued it from day one.

Public hearings as part of IBAC's investigation began on Monday hearing allegations that senior department officials bought shares in the company awarded the project tender.

The hearings were also told a senior official diverted funds from other projects to cover up a $60 million Ultranet cost blowout.

The IBAC hearing was told that diversion of funds 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.

Department officials spent $1.4 million on a one-day event, with dancing singers, to sell the program to principals and assistant principals, the hearing was told.

The public hearings continue on Tuesday and could go for up to three weeks, with as many as 35 witnesses to be called.

IBAC's investigation into alleged corruption in Victorian education department

What is Ultranet?

  • An online learning portal to link teachers, students and parents
  • Rolled out to schools in May 2010 but scrapped in 2013 because of its many failings 

What is IBAC investigating?

  • How contracts were tendered and awarded
  • Connections between department employees and businesses involved in Ultranet project
  • Whether department employees released confidential information, or influenced procurement processes
  • Whether payments, gifts, travel, employment opportunities or other benefits were received by staff due to involvement in Ultranet tender or procurement processes

The saga unfolds


  • Ultranet trial using software from US giant Oracle at Glen Waverley Secondary College
  • College principal promoted to education department as a deputy secretary


  • Victorians promised $60.5 million IT project to link teachers, students and parents


  • Tender released
  • All bids over $100 million; tender cancelled, project reduced
  • Cinglevue Pty Ltd is registered, part-owned by a former Glen Waverley Secondary College staffer


  • Darwin-based IT firm CSG Limited acquires Cinglevue for $5 million
  • Second tender to develop Ultranet released


  • CSG suspended from bidding in February pending legal action by a competitor
  • CSG again allowed to bid in May
  • Contract with CSG signed in July


  • Students get day off when Ultranet is launched so teachers can get accustomed to it, but it crashes
  • All-day presentation with singing and dancing to introduce principals to IT system costs the department $1.4 million


  • Internal report confirms four senior officers bought CSG shares
  • Darrell Fraser resigns as deputy secretary and takes on job with CSG
  • New education secretary Richard Bolt refers CSG share buying to ASIC
  • Education department's Ultranet officer, Dianne Peck, accepts job at CSG


  • ASIC decides not to investigate CSG share trading
  • Auditor-General reports costs of Ultranet reached $180 million and finds serious problems with tender


  • Liberal government scraps the project.