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AAP
Jack Gramenz

Cycling buddies caught up in public funding probe

The Independent Commission Against Corruption is investigating the use of public funds in NSW. (Dean Lewins/AAP PHOTOS)

A broken wrist was the first a top bureaucrat heard that a man facing an anti-corruption probe into his time leading a major infrastructure agency was being overseen by his cycling buddy.

But rather than make him question the closeness of their relationship, the revelation prompted former NSW education department secretary Mark Scott to make a joke.

"I made a comment to (Robert) Rust that surely his duty was to protect the chief executive," Mr Scott told a hearing on Tuesday.

"I was being light-hearted."

Robert Rust was paid $262,500 to chair an advisory council overseeing School Infrastructure NSW and its $6.7 billion project pipeline.

Mark Scott
Mark Scott is giving evidence at a NSW Independent Commission Against Corruption hearing. (HANDOUT/ICAC)

Its former chief executive, Anthony Manning, is facing an Independent Commission Against Corruption investigation into whether he and others might have misallocated funds to benefit friends and business associates and retaliated against those who raised concerns.

The commission is also investigating why potential warning signs might have been missed by the department.

In addition to being Mr Manning's former boss at Health Infrastructure NSW, which served as a model for its schools equivalent, Mr Rust provided him a reference as he sought the role leading the agency established in 2017.

Another former health infrastructure colleague and cycling buddy was Stuart Suthern-Brunt, who was engaged in multiple contract roles, and allegedly paid considerably more than the permanent employees he replaced or who later replaced him.

Payments across two-and-a-half years exceeded $1.7 million, counsel assisting the commission Jamie Darams SC said as the investigation began public hearings.

Mr Suthern-Brunt's initial engagement came after a "perfunctory attempt to recruit an employee to the position".

Mr Manning did not declare any conflict of interest until more than a year later.

Mr Scott said Mr Manning understood his responsibilities and position in the department, which was akin to a deputy secretary, despite his chief executive title.

The title was about external optics to paint him as a decision maker, but did not separate him from the rest of the department.

"We wanted there to be a clear signal that this person was running the enterprise that was delivering the school infrastructure,'' Mr Scott said.

"If you're chief executive of a major construction firm, this is someone for you to work with."

But Mr Manning had been given the latitude to assemble the team he needed to get the work done as the department faced constant pressure to deliver on government commitments.

It included a significant increase in funding for infrastructure projects to address maintenance backlogs, increase before and after school care provisions and expand air-conditioning in classrooms across more than 2200 schools.

Using some contractors was appropriate, particularly in the agency's early stages, to quickly scale up its ability to complete work, Mr Scott said.

Mr Scott, a former ABC managing director and current vice-chancellor at Sydney University, is expected to continue giving evidence on Wednesday.

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