By Lucy Carroll and Michael McGowan
A senior education official raised concerns about unsustainable budgets amid an “explosion” of contractors within the NSW Education Department’s school building unit soon after it was set up, an anti-corruption probe has heard.
The Independent Commission Against Corruption is holding a public inquiry into the conduct of Anthony Manning, who led School Infrastructure NSW from 2017 until 2024.
ICAC is probing allegations Manning and others in the school building unit gave friends and associates high-paying contractor jobs, improperly awarded contracts and misallocated funds.
Former finance manager Greg Brown appeared at ICAC on Monday.
On Monday, the inquiry heard evidence from a former finance manager at the NSW Education Department, Greg Brown, who was employed by the department in 1983 and left in March 2020.
“Prior to the creation of School Infrastructure [in 2017], essentially close to 100 per cent of our employees were permanent employees. They were all funded through our recurrent budget,” Brown told the inquiry.
“Once Mr Manning came on board there seemed to be, my words, an explosion of staff that turned up,” he said, with most being contractors. “There were some limited exceptions where positions were permanent employees.”
Brown worked in asset-related finance for the department for several decades and then as manager of budget and performance in School Infrastructure.
Counsel assisting the commission, Dan Fuller, questioned Brown on the impact of the alleged surge in contractors. “We were in trouble with budgets,” he replied. “We couldn’t sustain it. We were far exceeding our current budget ... and didn’t have the funding to support the number of people coming in.”
Brown said he raised concerns soon after Manning started in the top job at School Infrastructure in 2017.
When budget pressure issues were raised, Brown said Manning’s immediate response was “find the money out of the capital program”.
“There was a practice where we reserved some money from the major works program to cover some overheads,” Brown said. He alleged Manning gave him a direction to increase “the overhead allocation” or “management fee” from 1 per cent to 3 per cent for all projects.
Former School Infrastructure NSW CEO Anthony Manning.Credit: Dominic Lorrimer
Brown said he also voiced concerns about the number of communications staff in the unit, and that he told Manning paying those staff using the overhead allocation “could leave us open to an adverse audit report”.
The inquiry has previously heard that under Manning, spending on contractors surged to more than $344 million between 2017 and 2024, and that 26 employees were on salaries of more than $500,000.
The inquiry heard this month that Brown was made redundant “after questioning Mr Manning’s use of overheads, or capital funding, to pay for contingent workers and other contractors”.
Brown told the inquiry as well as warning about contractors and budgets, he also “constantly requested” better resources in the finance area.
But after returning from holidays in early 2020, he was told by then School Infrastructure chief operating officer, Erik Maranik, and an HR representative that a changed structure meant his role would be abolished and replaced with a temporary position.
“They said that means you no longer have a position, and we will be pursuing redundancy for you. I walked out of the room and said to my staff, essentially, ‘I’ve just been shafted’.”
The start of the hearing was delayed on Monday as Tim Hale SC told the commission he was no longer representing Manning.
“Mr Manning has withdrawn his instructions to me and my instructing solicitor, due to financial constraints. We understand that inquiries are under way in continuing to identify an alternative legal representative,” Hale told the commission.
On Monday morning, the inquiry heard from John Taylor, who founded construction firm APP in 1989 and was a director at Health Infrastructure NSW from 2008 to 2014, where he worked with Manning.
Taylor also appeared at Friday’s hearing, but it was cut short after the batteries in Taylor’s hearing aid went flat.
Last week the inquiry heard Taylor’s relationship with Manning was “up and down”. Despite previously describing it as “very close” to ICAC investigators, he said the two men had differences of opinion.
He described being on a subcommittee with Manning and another School Infrastructure employee, Stuart Suthern-Brunt, concerning the agency’s potential use of prefabricated classrooms.
When Taylor disagreed with Manning and Suthern-Brunt on the approach to using that technology, they had a “robust conversation” and the subcommittee never met again, he said.
The state’s first high-rise school in Parramatta.Credit: Edwina Pickles
In about 2018, Taylor, who was a member of the advisory council set up to oversee School Infrastructure, began providing advice on Sydney’s first high-rise school, Arthur Phillip, in Parramatta.
The $225 million project had been plagued by delays and cost blowouts, and Taylor told the inquiry he began providing advice on a “gratis” basis.
However, he said, he eventually was appointed “the lead negotiator” on discussions with the project contractor around re-setting their contract. He issued an invoice for the work based for seven weeks at three days a week.
The inquiry heard that Taylor invoiced School Infrastructure for $57,750 in April 2018.
“My understanding is when I started this seven-week period was I thought I’m not going to get paid, but having put in significant time, I put my hand up to Mr Manning and said I think it only fair that I get remuneration. I suspect he said ‘give me an invoice and I’ll sort the paperwork out’.”
Taylor said the “engagement paperwork, if you like, on this occasion, was made after I submitted that invoice, rather than before. Which I think ... is probably against the principles of the procurement.”
Counsel assisting Jamie Darams, SC, asked Taylor when he became aware it was against the procurement principles. “Probably two or three days ago,” Taylor said.
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