The Independent Broad-Based Anti-Corruption Commission heard the department's sacked finance chief Nino Napoli asked his brother-in-law Ralph Barba, director of Four Diegos, to inflate an invoice made out to the department by up to $9500 to cover the travel and accommodation costs for the wife of former deputy secretary Jeff Rosewarne in 2009.

Mr Barba said he was told Mr Rosewarne's personal life was in "turmoil" and "he needed to take his wife overseas with him to try make things better".

The original $15,241 invoice was in support of Mr Barba's proposal to link sporting programs at disadvantaged schools with the Manchester United Football Club and the David Beckham Academy.

Mr Barba said he was "shocked" by what Mr Napoli asked him to do, but agreed to falsify the invoice, calling the decision the "biggest mistake of my life".

It was heard 18 months later, when the commission launched its investigation, Mr Rosewarne asked Mr Barba to pretend that the added sum was actually a personal loan to Mr Rosewarne which would was being repaid.

It was also heard that Mr Napoli asked Mr Barba to pay $6000 for his wife's trip – a sum he repaid through a distant cousin Daniel Calleja, who ran a company Innovating Visuals, which received tens of thousands of dollars in allegedly false invoices from Victorian schools between 2007-14.

Earlier in the day, the corruption watchdog heard that nearly $5000 of department funds was used to pay off the credit card belonging to Mr Napoli's wife, Josephine.

In 2010, an amount of $4950 was transferred by the department for printing work to businesses owned by Mr Napoli's relatives, and then transferred into the account of a company owned by Napoli himself. It was subsequently used to pay off his wife's credit card, it was heard.

Mr Barba said he was "sickened" by the alleged racket and "felt he was taken advantage of".

In a recording played to the commission, he said there were two types of people caught up in Mr Napoli's alleged scheme – those such as himself, who were "dragged" into the scheme and did not benefit from it, and those who "had plenty of time to reflect on what they were doing" and would receive financial benefits.

Earlier in the day, the commission  heard that Nino Napoli was "uncomfortable" with the department paying companies owned by people sharing his surname, so cousins with a different surname would invoice the department directly for work performed by and paid to his brother, Robert Napoli.

Nino Napoli got a cut of the profit made from this work, the anti-corruption commission heard.

It was also heard that he hid documents in his mother's roof in wake of the commission's  investigation as he was "scared" of what the investigators would find.

Under investigation are claimed that 17 companies linked to Nino Napoli and nine of his relatives received more than $2.5 million from Victorian schools between 2007 and 2014.