Former NSW premier Gladys Berejiklian was interviewed in private last month by the state's corruption watchdog about whether she suspected her former boyfriend had engaged in corrupt conduct when she sacked him as parliamentary secretary.
The Independent Commission Against Corruption has begun a public hearing into matters that prompted Ms Berejiklian's shock resignation from the top job on October 1.
ICAC is investigating whether Ms Berejiklian "exercised public functions" in a position of conflict given her secret five-year relationship with disgraced former MP Daryl Maguire, which she admitted during hearings into his conduct in October last year.
It will probe whether she broke the law by failing to disclose her relationship with the former member for Wagga Wagga and whether she "was liable to allow or encourage" his conduct.
Ms Berejiklian will not appear as a witness this week, but on Monday the commission played part of a compulsory interview with her less than two weeks before she announced her resignation.
In the footage, counsel assisting the commission Scott Robertson asks if she suspected Mr Maguire had been engaged in corrupt conduct when she sacked him in July 2018 from his role as parliamentary secretary.
"I couldn't make any assumption at that stage, he was professing his innocence and saying it was a misunderstanding," Ms Berejiklian said.
"I was in shock. I didn't know what to think."
Mr Robertson said he wasn't asking whether she knew Mr Maguire had engaged in corrupt conduct but whether she suspected.
"I can't remember what I thought at that time."
The commission is investigating Ms Berejiklian's role in millions of dollars worth of grant funding awarded to two projects in Mr Maguire's electorate in 2018.
A NSW senior public servant told the corruption watchdog of an "extremely unusual" process to secure a funding grant at the centre of the inquiry.
NSW Office of Sport Director Michael Toohey testified that he was asked in 2016 to draft an urgent submission to the government's expenditure review committee for a grant to for the Australian Clay Target Association in Wagga Wagga.
Mr Toohey said it was "extremely unusual" that he would be asked to put together a submission at such short notice, and described the way the grant's benefit-to-cost ratio was calculated as "inadequate".
The hearing is expected to run for about 10 days and will be overseen by ICAC Assistant Commissioner Ruth McColl SC.
In his opening address Mr Robertson explained that under the ministerial code of conduct NSW ministers must exhibit, and be seen to exhibit, the highest standards of integrity.
Former bureaucrat turned NSW Rugby boss Paul Doorn will take to the witness box on Tuesday, having worked in similar roles during the period under scrutiny.
Nigel Blunden, a former strategy director to Ms Berejiklian's predecessor Mike Baird is to appear on Wednesday as will the former premier himself.
NSW deputy Liberal leader Stuart Ayres will follow suit on Friday.
Former Deputy Premier John Barilaro is expected to give evidence the following week.
Mr Maguire is accused of abusing his public office and improperly gaining a benefit for himself while serving as an MP between 2012 and 2018.
Premier Dominic Perrottet has said he would not be watching the ICAC hearings.
"I'll be working for the people of NSW today, and so will all of my team," Mr Perrottet said on Monday.
Australian Associated Press