Following a lengthy investigation, Ombudsman Deborah Glass has concluded Ernest Fleming abused his position as principal of Bendigo South East College by hiring and promoting his wife and son.

She also confirmed Mr Fleming engaged a bus co-ordinator who was a manager of Bendigo Coachlines, a company co-owned by another son.

This business received work from the school at the expense of other local bus companies.

“If a case study into nepotism is needed, this is it,” Ms Glass wrote in the damning 129-page report, published on Tuesday.

“For many years, Ernest Fleming ran the college as a personal fiefdom, employing and promoting family members, providing substantial benefits to his son’s business partner and companies owned by his son, and using public funds as he saw fit without consultation or approval from the college council.”

Mr Fleming denies having used his position for personal gain and says clearances were received in regard to potential conflicts of interest.

The Education Department’s regional office was inundated with more than 20 complaints about the principal’s behaviour between August 2014 and February 2016 but failed to “meaningfully investigate" them, the report said.

According to the Ombudsman, this allowed Mr Fleming to “continue to engage in improper conduct with impunity”.

Mr Fleming resigned in May – almost 18 months after being temporarily stood down by the department.

Ms Glass said Mr Fleming's conduct ''impacted the culture of the college and the careers of numerous past and current teachers and staff. Nepotism is particularly pernicious in rural and regional areas with fewer job opportunities.”

Mr Fleming employed his son Adam as a consultant before appointing him manager of the college’s specialist sports program in December 2014. His son received the sought-after job over a more qualified candidate, the report said.

Six weeks after Adam began the role in the sports program, his father had given him a backdated promotion that increased his annual salary by $7,203.

The investigation also found Mr Fleming’s wife was promoted to the role of his personal assistant despite there being no evidence she submitted a valid application.

In 2013, Mr Fleming engaged Michael Bulmer as the school's regional bus co-ordinator – a role which involved booking buses for students – despite knowing he had a conflict of interest as a manager at Bendigo Coachlines. In 2016, Mr Fleming's son became a co-owner of the business, which was still used for students.

On Wednesday, Mr Fleming's lawyer attacked the Omdudsman's report.

“The Ombudsman’s office has demonstrated its partisan approach to the inquiry by issuing a public statement using sensational language to attract media attention to its release,” David Schier said.

“It claimed that Mr Fleming ran the college as his 'personal fiefdom' and then wholly failed to show, in its lengthy document where Mr Fleming benefited personally, financially or otherwise from the allegations so made.

“There is not one finding, despite a two-year investigation and two audits ordered by the department, that Mr Fleming received the benefit of one dollar. The report entirely clears him of some of the main but now entirely discredited allegations that were made by the early anonymous complainants.”

Mr Schier said the Education Department had failed Mr Fleming and college staff over many years in its governance of conflicts of interest and associated complaints.

“Mr Fleming has claimed throughout that he made full disclosure to senior officers of the department of conflict of interest issues and received the appropriate clearances,” he said.

An earlier independent report prepared for the department had found Mr Fleming was open in dealings with staff and family members and ''there was nothing insidious in relation to conflict of interest”, Mr Fleming said.

An Education Department spokesman said it welcomed the report and had taken steps to address issues at the school.

"Since these issues occurred, the department has undertaken an extensive integrity reform agenda, which has addressed many of the issues raised in this report," he said.

With Bendigo Advertiser