More than $500,000 meant for Victorian community groups was allegedly used to pay the private legal fees of Framlingham Aboriginal elder Geoff Clark.
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Some of the transactions were labelled "community activities" in financial documents.
Another $100,000 from a government-funded house painting contract was allegedly taken from one community organisation controlled by Mr Clark and paid back into the account of another group, also controlled by him.
Mr Clark, 67, the former head of the disbanded Aboriginal and Torres Strait Islander Commission, was once one of Australia's most senior Aboriginal leaders.
He and members of his immediate family are facing 1000 fraud-related charges following a major police investigation into more than $2 million in allegedly stolen funds meant for Aboriginal communities in Victoria's south-west.
In Warrnambool Magistrates Court on Wednesday, Mr Clark's former accountant was forced to give evidence about her knowledge of transactions between a number of Aboriginal community organisations that were under Mr Clark's control.
Sandra Campbell, the Ballarat accountant who oversaw the books of a string of Aboriginal organisations across the state's south-west over almost 20 years, told the court she had no recollection of how nearly $120,000 in Commonwealth funding that was meant to help paint Aboriginal housing at Halls Gap ended up in the accounts of another group connected to Mr Clark, based more than 200 kilometres away.
Prosecutor Roxanne Bird told the court that documents showed the money had allegedly been paid to a contractor working for Brambuk Gariwerd in Halls Gap in 2009 before Glenn's Painting Services deposited the payment into the accounts of Framlingham Aboriginal Trust.
During lengthy questioning, Ms Campbell also denied knowing how or why more than $550,000 in community funds were allegedly used to pay Mr Clark's private legal bills.
"I can't recall," Ms Campbell said.
Mr Clark, his wife Trudy and son's Jeremy and Aaron Clark say they plan to fight the charges against them.
On Wednesday, the court heard almost $550,000 in legal fees, paid to Melbourne-based law firm Coadys between 2000 and 2009, was allegedly taken from Aboriginal community group accounts.
They included five transactions paid out of Kirrae Whurrong Aboriginal Corporation accounts in 2003 alone, totalling $99,000. They were labelled in financial documents as "community activities".
Police say that money was never listed in end of year financial statements Ms Campbell was responsible for.
When repeatedly questioned over her recollection of her work for Framlingham Aboriginal Trust, Kirrae Whurrong, Maar Land Council and Brambuk Gariwerd - all of which Mr Clark controlled in the 2000s - Ms Campbell said she barely recalled the details of any conversations.
But she said it took up to seven years to gain relevant documents from the organisations in order to file audit reports. On one occasion she was told that a computer had been stolen.
Police from the major fraud squad began investigating Mr Clark and the community groups he controlled in the late-2000s before laying charges in late 2018.
Mr Clark's wife Trudy is facing 481 charges, while their sons Jeremy Clark, 45, of Abbotsford, and Aaron Clark, 37, of Bellfield, are facing 114 and 32 charges respectively.
Mr Clark is facing 550 charges. They include allegations that he perjured himself in the Federal Court, mismanaged $150,000 meant for Aboriginal communities in Victoria's south-west, and siphoned off tens of thousands of dollars in government grants to build a deck at his Framlingham home.
Mr Clark has vehemently denied any wrongdoing, labelling the case a "witch hunt" for political purposes.
The Clark family is due to return to court in February.
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