Corruption probe in Vic education dept

Victoria's corruption watchdog is investigating the state's education department amid reports top officials siphoned money meant for needy schools into a secret slush fund.

"IBAC is investigating allegations of serious corrupt conduct at the Department of Education and Early Childhood Development," a spokeswoman for the Independent Broad-based Anti-corruption Commission told AAP.

About $28 million was used to pay for overseas trips, cars and conferences, Fairfax Media reports.

The money was meant to go to schools to improve programs and infrastructure before a January 2011 audit discovered the alleged misappropriations.

The officials in question reportedly "banked" money at some schools before transferring it out on school holidays when it was less likely to be noticed.

The IBAC spokeswoman said it was inappropriate to comment on the reports while the investigation was ongoing.

The education department said it was reviewing the Program Coordinator Schools program, which was designed to help schools fund local needs.

"A departmental review of the program led to a range of recommendations to ensure funds are subject to strict controls," a departmental spokesman told AAP.

"The use of schools to bank funding for non-school purposes is banned," the department said.

It said it had strengthened auditing and purchasing procedures since 2011.