But the Independent Broad-based Anti-corruption Commission's (IBAC) Special report on corruption risks associated with procurement in local government goes into detail for the first time about about how Carey's scheme rolled out.

The former council manager of sports and recreation was able to 'talk the talk', according to some colleagues who spoke to IBAC investigators, and would "manipulate circumstances to his advantage, concocting stories to elicit sympathy from colleagues".

Carey was charged and convicted of obtaining financial advantage by deception, attempting to commit an indictable offence and soliciting secret commissions. He was sentenced to three years' imprisonment and ordered to repay $31,200 to the City of Ballarat.

READ CITY OF BALLARAT CEO JUSTINE LINLEY'S FULL RESPONSE HERE

Carey was instrumental in setting up a company solely owned and operated by his wife Jasmine Carey, and engaging the company on behalf of council, according to the IBAC special report released on Monday.

The company was awarded $55,885 in contracts between June and October 2015.

He also actively engaged three associates for council, and played a critical role in those companies obtaining more than $128,000 in contracts between 2013 and 2015, in exchange for receiving secret commissions totalling $47,745.

In one notable attempt at covering his tracks, Carey was sent the first invoice from his wife via an email address bearing her name, but the email was signed using her middle name of 'Carol'.

Seven minutes later, Ms Carey sent a revised invoice from an email bearing the business name. There were no references to her full name Jasmine Carey. This email was then submitted to council's account payable area, according to the IBAC special report.

At a later date, Carey sent an email to the accounts department with the comment, 'How did it all go with (the company)? Carol I think it is?' IBAC noted this was an attempt to give the impression he was unsure about the company's details, in order to disguise the fact the company was owned and operated by his wife.

When corruption investigators checked Carey's personnel file, it indicated that Ms Carey's company telephone number was the same as his wife's phone number, which the sports and recreation manager had previously provided to the council in case of personal emergency. IBAC noted in the document released Monday that audits of information council already had could have identified potential instances of fraud or corruption "in a timely manner".

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Within his role, Carey was able to authorise payments of invoices he had submitted without scrutiny by increasing the financial delegation of one of his subordinates from $1000 to $20,000. For invoices in excess of $20,000, he ensured they fell under his delegated limit of $100,000.

Key documents such as business cases, quotes and contract details relating to his wife's company or his associates were not generated or filed consistently. Carey failed to save any records relating to dealings with his wife and associates on the team's shared network drive, instead storing details on his personal computer.

This meant there was no opportunity for others to review and check his work.

IBAC noted within the special report on procurement that Carey was able to "create the scope of works, sometimes creating unnecessary work".

For example, one piece of work undertaken by Ms Carey's company was to develop City of Ballarat's croquet strategy, without any rationale for its creation.

When interviewed by investigators from the watchdog, one of the company directors said Carey instructed him to increase the invoice amount, and to pay the difference to Mr Carey 'for getting the job'.

The director told IBAC he sent his invoices directly to Mr Carey and, upon receiving payments from the council, withdrew cash and handed it personally to Mr Carey.

City of Ballarat did instigate an investigation, after concerns were raised regarding Mr Carey's conduct while he was seconded to work in another part of council.

The probe was conducted by the council's chief financial officer and Carey's general manager at the time. The IBAC special report which described the internal investigation did not name the pair.

As part of the investigation, Carey was given copies of nine questionable invoices in advance of a meeting to discuss the concerns, enabling him to construct a response ahead of time.

At that meeting, Carey presented extracts of a university dissertation he had drafted some years earlier as fabricated evidence of works completed.

The council investigation into the fraud allegations ceased at the conclusion of that meeting, with officers "satisfied in relation to the fraud allegations", according to the watchdog's report. No notes or other records of the meeting could be located by IBAC during their corruption inquiry.

In a statement made to IBAC, council's CFO conceded he wasn't in a position to assess the quality of work tendered by Carey. But having not consulted staff with expertise in the area for the investigation, he still "concluded the procurement policy was definitely followed".

"You would have to be in on the conversations to what scope was required to determine whether the quality was good, bad or otherwise," City of Ballarat's CFO at the time said in response to IBAC's concerns.

"But definitely the procurement policy was followed. The work was required, work was delivered."

In response to IBAC's findings, both senior officers "denied conducting an investigation in relation to allegations of fraud against Mr Carey", as set out on the document released on Monday.

"Whilst the statements of both... do mistakenly use the word 'fraud' at times when referring to the nature of the allegations ... what [they] were really referring to in their statements was an allegation that Mr Carey was procuring from a company his wife was associated with," senior council officers told IBAC.

During the investigation, IBAC noted a conflict of interest concern in the two men having run the internal probe, because general manger was Carey's direct supervisor as such, any adverse findings identified "would reflect badly on him".

In relation to why the internal investigation wasn't documented and there was no written rationale for why the allegations were dismissed, the CFO said when he did "this kind of stuff I don't like to rely on what people are giving me", so he did an independent review of the system for a three-year period, printing out every invoice from the time frame.

But IBAC said within their special report the decision to conduct the review of council invoices suggests the meeting warranted documenting.

The issue around conflict of interest - in Carey not disclosing his wife's consulting involvement - was referred to the council's human resources manager who spoke with the protected disclosure coordinator. IBAC was notified about the conflict of interest matter by council a month after the meeting with Carey to investigate the fraud allegations.

The watchdog's probe of his actions started in November 2015.

During the investigation, witnesses said they did not raise concerns with others about Carey's actions, as they "were unsure of the proper procurement processes", or they acted on his instructions "believing it must be okay if their senior officer was asking them" to do it.

IBAC's special report states during the period of Carey's offending, the "council did not provide adequate oversight of senior employees".

"As a result, opportunities to detect and correct Mr Carey's conduct were missed," the report notes.

The internal investigation which concluded that City of Ballarat's procurement policy hadn't been breached was reached without "seeking verification or advice from any other parties such as the contractors involved or Mr Carey's colleagues".

"The internal investigation undertaken by the council was poorly conducted and failed to identify clear policy breaches," according to IBAC.

"The allegations were not reported to IBAC or Victoria Police in a timely manner."

You can read IBAC's report in full here.

City of Ballarat noted the draft IBAC report and accepted the recommendations in the draft report, but did not respond to IBAC about the allegations in the document.

City of Darebin, which was also regularly referenced in the special report, wrote a four-page response about what it had done to reduce the corruption risks identified in IBAC's investigation.

Two recommendations were made by the corruption watchdog. The first is that City of Ballarat's CEO Justine Linley should report within 12 months of the document's release to advise how the council has strengthen its procurement policies to address the corruption vulnerabilities identified.

The council will need to ensure robust information management processes are in place to document all procurement policies. Key elements of procurement will need to be segregated, with regular checks conducted as to how effective these mechanisms are, "which may include periodically rotating managers with significant responsibility for procurement".

City of Ballarat also need to make sure suppliers are sourced in a way that complies with competition requirements, as set out by law or council polices. Audits and risk assessments should be conducted to identify vulnerabilities in the system. Employees should be trained in those policies and codes of conduct.

Communication should be made with council employees and suppliers regularly regarding their responsibility to report suspected corrupt conduct and how to make a report.

The second recommendation was the Local Government Victoria consider the creation of a code of conduct for suppliers to Victorian councils, consistent with the state government suppliers' code of conduct developed by the Victorian Government Purchasing Board, to help local government suppliers understand minimum standards of conduct when conducting business with councils.