The state’s peak body for Catholic schools is under pressure from its own teachers to show greater transparency over funding after allegations that $165,000 was funnelled to right-wing Liberal Party operatives.

Former Catholic sector leaders also fear the allegations will threaten future funding negotiations, and warn the actions of a few within the sector are undermining the work of its schools and teachers.

The Independent Commission Against Corruption investigation has aired allegations Catholic Schools NSW, which distributes federal funding to almost 600 of its schools, employed operatives in the organisation who used work time to stack local branches with more conservative members.

Federal Education Minister Jason Clare has labelled the allegations aired in the corruption hearing “very concerning”.

Catholic Schools NSW chief executive Dallas McInerney, who has stood aside, is due to provide evidence at the anti-corruption inquiry on Thursday and Friday. It is alleged the organisation made undeclared political donations exceeding legal caps under a scheme McInerney authorised.

Independent Education Union (IEU) NSW and ACT branch secretary Carol Matthews said the NSW government closely scrutinises expenditure at the individual school level to ensure the $3.8 billion it receives in state and Commonwealth funding is used solely for the operation of each school.

“However, similar scrutiny is not applied to organisations such as Catholic Schools NSW that receive funding on behalf of Catholic diocesan schools,” Matthews said.

“The union considers that legislative provisions should be broadened to provide greater transparency at all stages of the funding process.

“IEU members would be deeply concerned if any public funding for non-government schools has been diverted from its intended purpose.”

Concern about a lack of oversight comes as the NSW Education Standards Authority investigates whether private school Redeemer Baptist in North Parramatta breached laws that prohibit schools in receipt of government funding from making a profit.

And earlier this year the ICAC found that the former head of the NSW Department of Education’s public school infrastructure unit, Anthony Manning, had acted corruptly, in a “clear case of cronyism”.

Michael Bezzina, who has been a director of Catholic schools in both the Sydney and Parramatta dioceses and now works as a consultant, said the allegations now being explored by the ICAC’s Operation Rosny had cast a shadow over the Catholic sector.

“The people I am close to are disappointed that it has come to this stage, and fearful for what it might mean for the future,” he said.

“The questions over the use of funding will make funding negotiations challenging going forward.”

He said while Catholic Schools NSW does not manage schools or hire teachers, and exercises an advocacy role, he said the allegations, if proven true, undermined the excellent work done in schools every day.

“People very close to Catholic education know there’s no defence of this. If it has happened, they need to be held to account, and we’re apprehensive about what’s ahead.”

Brian Lacey, who has worked both as a principal and has sat on the board of Catholic Education Commission NSW – a precursor organisation to Catholic Schools NSW – said he welcomed extra transparency.

“We need to look at this and really do a deep dive. People might say it’s only $160,000 and is nothing compared to the billions received in education funding … It is the optics of what is alleged to have happened,” he said.

“It puts a bad taste in the mouth [when] teachers are scrimping for things for their classrooms … What’s frustrating is that a lot of schools are really doing it tough.”

Clare said it was important for the ICAC investigation to take its course but added: “Obviously, the evidence that has come out so far is very concerning.

“If you’re a mum or dad working an extra job to pay your child’s school fees, you’d be very worried. Is your money going to your local school or is it going into the hands of a political party? This is very serious and it’s important that ICAC is able to do its job.”

Catholic Schools NSW was formed in 2016 to replace the Catholic Education Commission after bishops at the time expressed a desire for a more “appropriate, efficient and transparent” administration.

In its last year of operation the Catholic Education Commission spent $333,684 on travel and had 32 full-time staff.

By 2019 Catholic Schools NSW was spending $700,000 on travel, according to its annual reports, and had 52 full-time staff. The yearly travel spend hit $1.1 million in 2025 – about $92,000 per month.

Annual reports show executives have travelled to international destinations for work conferences, including Italy, Switzerland and the US.

Catholic Schools Diocese of Parramatta chief executive Jack de Groot wrote to parents to assure them they were committed to the “responsible stewardship of public funding” last month.

The letter went on to distance the operation of its schools from the corruption allegations, assuring parents fees had not been used to funnel money to Catholic Schools NSW.

“I would also like to reassure you that we recognise the expectations that come with families choosing a Catholic school for their children, and we take that trust seriously,” he said in the letter.

Further reading

Here are some of the highlights of our coverage of Operation Rosny.