Ian Hamm was the acting executive director of AAV in 2008, appointed to the position in 2009 and held the job until 2012.

Former long-time Framlingham Aboriginal Trust (FAT) administrator Geoff Clark, his wife Trudi and two of their sons, Aaron and Jeremy, have been charged by Victoria Police fraud and extortion squad detectives with a total of 1170 charges after seven-year investigation Operation Omega.

Mr Hamm gave evidence in a committal hearing at the Warrnambool Magistrates Court on Wednesday.

In 2009 Framlingham employee Michael Fitzgerald became aware of allegations that Geoff's wife Trudi was still being paid despite believing she had not worked for the trust since 2002.

Mr Hamm said that before concerns were raised by Mr Fitzgerald he had respect for Mr Clark's work, particularly at Framlingham.

He said after Mr Fitzgerald and a reform group made claims involving the trust, AAV examined all its FAT files.

"It became apparent that records had not been kept appropriately over a number of years," he said, explaining that records and monitoring were to be conducted under the Aboriginal Lands Act 1970.

Put to Mr Hamm in cross-examination that AAV had failed to monitor FAT, he said: "As executive director I drew that conclusion fairly quickly".

Mr Hamm said he met with members of the reform group twice and a financial review was conducted of FAT.

He said he did not believe that AAV had performed its monitoring role of FAT properly for many years.

The AAV chief said he was not aware an audit had been conducted of FAT prior to 2011 and any checks done were on an "ad hoc basis".

Mr Hamm also said that shares in trusts at Framlingham and Lake Tyers "were the most vexed issue" of the lands act.

He said there was an issue of accurate shareholding records in both AAV and the trusts.

The committal hearing before magistrate Charlie Rozencwajg is continuing.