Mr Pearce, of Helensburgh, bought the roof racks in December 2011. He also invoiced the SES for the installation of electric brakes for the towing of a camper trailer on his car, ICAC heard. 

His colleague, former Deputy Commissioner Tara McCarthy, yesterday told an ICAC public inquiry that she brought both matters to the attention of her superior, SES Commissioner Murray Kear, indicating that they needed to be properly investigated.

‘‘I believed it was a breach of the code of conduct and inappropriate use of SES money,’’ she told the inquiry.

‘‘At the time, I told Murray Kear it was a serious matter and required investigation.’’

Ms McCarthy said Mr Kear told her he would talk to Mr Pearce about the matter.

She said when she followed up with Mr Kear he informed her that Mr Pearce had repaid the monies.

‘‘He said he had spoken to Steve and it was a mistake and that he didn’t realise he wasn’t supposed to buy these things,’’ Ms McCarthy said in her evidence.

In his opening address, counsel assisting the commission, Michael Fordham, SC, said Mr Kear relied on the fact of repayment to justify a lack of investigation.

‘‘The fact that repayment was 15 months and two years [respectively] after the event, and only after discovery by Ms McCarthy, seems to have been ignored by Commissioner Kear,’’ he said.

The ICAC public inquiry is examining whether Mr Kear dismissed Ms McCarthy from her deputy commissioner position in reprisal for making allegations of corrupt conduct against Mr Pearce.

The scope of the inquiry further includes whether Mr Kear improperly showed favour to Mr Pearce by failing to appropriately investigate Ms McCarthy’s allegations; and whether Mr Kear made false statements to ICAC officers in respect of these matters.

Lastly, the inquiry is investigating whether Mr Kear failed to recognise, disclose and manage a conflict of interest arising out of his friendship with Mr Pearce in connection with the hiring, managing and dismissal of Ms McCarthy.

Ms McCarthy was sacked on May 14, this year  and she told the inquiry yesterday she was now unemployed.

The inquiry further heard that Ms McCarthy, on or about last March 25, reviewed a number of credit card statements for Mr Pearce, determining that many of them appeared to fall outside NSW government policy.

She engaged the Internal Audit Bureau to conduct a desktop audit. That audit concluded that there were 154 claims made by Mr Pearce that required further investigation with the potential irregularities to exceed $11,000, the inquiry heard.

During her review of contracts to which the SES was a party, Ms McCarthy found that two contracts – Karoshi Pty Limited and Performance Drivers – were non-compliant and contained extended termination clauses to the disadvantage of the SES.

Mr Fordham said in his opening that there was evidence that Mr Pearce was involved in entering into the two contracts for the SES and that both exceeded the amount for which the organisation could contract without a formal tender process.

Ms McCarthy told Mr Kear about her concerns with the contracts yet there was no formal investigation by the commissioner about Mr Pearce’s involvement, Mr Fordham said.

Both contracts were cancelled and the Karoshi contract required a termination payment of $40,000. 

The inquiry also heard that Ms McCarthy was concerned in September 2012 about the overtime and car usage of then director of finance Kevin Pallier, who was supervised by Mr Pearce.

Ms McCarthy uncovered that Mr Pearce approved overtime for Mr Pallier in the amount of nearly $60,000 and flexible working arrangements.

Mr Fordham said Ms McCarthy also uncovered widespread use of overtime within the SES that did not comply with state government policy and she instituted change.

Ms McCarthy also said she went to Mr Kear in October 2012 with concerns  another SES employee was not paying for the private use of his corporate car.  The inquiry is likely to run for up to two weeks.