Melbourne High School embezzlement claims first ignored, evidence reveals

Despite numerous complaints and evidence from teachers alluding to Melbourne High’s books being “cooked”, new evidence reveals the claims were largely ignored for years.

Explosive new evidence shows Melbourne High teachers first presented extensive embezzlement of school funds back in 2016, but were largely ignored.

This was five years before business manager Frances Walshe was found to have stolen $432,000 from the selective state school’s coffers to fund her gambling habit.

A damning dossier of more than 50 emails sent from senior teachers to the Department of Education shows claims that “the books are cooked” were brushed off or subject to cursory investigation over five years.

The electronic mail trail shows five senior staff members exposed nearly $2 million in unaccounted money in 2018 and were gobsmacked when a 2019 PriceWaterhouseCoopers audit found “no misuse of funds”.

The emails, obtained exclusively by the Herald Sun, challenge the notion that Ms Walshe’s thievery was only uncovered in 2021 by new principal Dr Tony Mordini.

In fact, a number of frustrated staff spent years telling the department that the school was spending hundreds of thousands of dollars on speech nights, rowing sheds and choral competitions while the “tables and chairs are falling apart”.

Frances Walshe, former business manager at Melbourne High. Picture: NCA NewsWire / Luis Ascui

In December 2019, one whistleblower wrote to education department bosses stating that: “I believe it is corruption, total mismanagement.”

“The books are cooked because the bank accounts don’t match the books.”

The desperate warnings from staff go as far back as April 27, 2016, with a whistleblower telling then Minister for Education James Merlino that: “the amount of money wasted by the school is shameful”.

Another account from June 2016 was sent to then departmental secretary Gill Callister. It said the school “does not have the funds to replace essentials like tables and chairs” but that “large amounts are spent on non-educational items” including $50,000 on house events venue hire, $160,000 on hiring the Melbourne Convention Centre for speech night and almost $200,000 on school rowing.

A 2018 document compiled by another senior staff member shows spending of $1.2m on essential learning items which were not budgeted for, along with $86,000 on reimbursements, $414,000 on computers and IT and $535,741 on optional items.

These warnings prompted the department to hire accounting firm PricewaterhouseCoopers to conduct a review which in 2019 found “no findings of unethical practices or misuse of funds”.

The staff did not give up, once again telling the department in 2019 that “teaching and learning are being squeezed to the point of suffocation” while rowing, sport, cadets, friends of music and air training corps “have such a healthy income”.

Explosive new evidence shows Melbourne High teachers first presented extensive embezzlement of school funds in 2016 but were largely ignored Picture: David Geraghty

They noted that the speech night cost the school $174,000 yet only raised $15,000.

Further discrepancies in budgeting were presented to the department in late 2019, including $300,000 raised by the school foundation for classroom upgrades that was unaccounted for.

And yet by 2020 the department was still insisting that the “matter was open” and a “preliminary report” was being prepared to decide whether “further action is warranted”.

Dr Mordini said the actions of one person didn’t diminish the goodness of the whole school community.

“We are a very strong community, we believe in ethical behaviour and we will put this behind us. It’s regrettable, but we’re not going to be held back by this,” Dr Mordini said.

He said theft and fraudulent behaviour can be very difficult to identify if you’re not on the ground.

“I had the advantage of being on the ground in the school, additionally I have a broad skill set that includes business and governance qualifications.

“I continue to work with the Department of Education to lead a very strong school.

“Academically it’s one of the most highest performing schools in the country and as a public servant I see it as my duty to do the best that I can to support the Department, “ Dr Mordini said.

Gill Callister, now CEO of Mind Australia, said she didn’t recall the specific allegations about Melbourne High but that such issues were taken seriously and given a high priority at the time.

A spokesman for the Department of Education said “concerns raised about financial management at Melbourne High resulted in the department commissioning a review by PriceWaterhouseCoopers which did not identify any corrupt practices or misuse of funds, but did make recommendations in relation to strengthening the financial management practices of the school”.

He said the department commenced working with the school on implementation of the recommendations of the review prior to the identification of criminal activity by the business manager Ms Walshe.

The department is now conducting a full review of the circumstances that led to the criminal activity by Ms Walshe.

Last week Judge Peter Lauritsen sentenced Ms Walshe to 24 months’ prison, with a non-parole period of 14 months.