Council assisting the Independent Broad-based Anti-corruption Commission, Ian Hill QC, told the inquiry on Tuesday the TAFE received over $500,000 in state government grants as part of a third-party training agreement with TayTell Pty Ltd.

More than $220,000 of those Education Department funds were pass on to TayTell.

“Over the course of Operation Lansdowne, IBAC has found evidence suggesting a sustained pattern of suspicious conduct involving a group of people employed in, or contracted by, the Victorian TAFE and transport sectors, and involving the flow of millions of dollars of public funds to some of those individuals and to entities associated with them,” Mr Hill said.

“The evidence found by IBAC so far gives rise to serious concerns that some of those individuals have, over several years, been able to exploit weaknesses in these industry sectors, and perhaps to influence the conduct of a number of public officials, in order to derive significant financial benefits for themselves and for their friends and family.”

Under the arrangement with Bendigo TAFE, Mr Hill said TayTell would enroll students purported to be employees of Jetstar in engineering and business management courses at a time when a “former colleague and close associate” of company director, Rebecca Taylor, was employed as a manager at the airline.

He said TayTell was responsible for conducting the training and assessment of the Jetstar workers, while the TAFE’s role was “limited, largely, to the accreditation of the enrolled students with the relevant qualifications”.

“The circumstances of the negotiation, oversight and management of Bendigo Kangan’s agreement with TayTell are matters to be explored in these examinations,” he said.

“So too are the circumstances surrounding payments made to TayTell by Bendigo Kangan, and the sufficiency of its systems and controls relating to third party training agreements.”

Ms Taylor is expected to appear before the inquiry, which is also examining allegations concerning South West Institute of TAFE in Warrnambool and regional rail operator V/Line, today.