A Melbourne pensioner and Order of Australia recipient who used hundreds of thousands of dollars from a charity he helped found to buy alcohol, lingerie and cigarettes has been ordered by a court to repay more than $1 million.

Key points: Parents paid childcare fees to Boris Trajkov in cash

Parents paid childcare fees to Boris Trajkov in cash Trajkov used childcare funds to buy cigarettes, alcohol and a prescription medication to treat erectile dysfunction

Trajkov used childcare funds to buy cigarettes, alcohol and a prescription medication to treat erectile dysfunction Staff at the childcare centre went unpaid for months due to his spending

Boris Trajkov, 76, a former SBS radio journalist, was a founding member of the Victorian Multiethnic Slavic Welfare Association, which provided support to elderly migrants from the former Yugoslavia.

He was awarded an Order of Australia in 1991 for his work with the Macedonian community.

The association also operated a childcare centre in the Melbourne suburb of Lalor, with parents paying their fees to Trajkov in cash.

Trajkov described himself as the "Captain" and founder of the centre.

The County Court heard more than $1.5 million in cash was paid by parents for child care between 2013 and 2016, but just $56,000 was deposited in the association's bank account during the same period.

Judicial registrar My Anh Tran found Trajkov's use of the association's funds to buy cigarettes, alcohol and a prescription medication to treat erectile dysfunction came at the cost of staff who were employed to care for children.

One staff member who had worked at the centre for 29 years and not missed a day of work despite a seven-year battle with lung cancer was told by Trajkov that she was the second in charge of a "sinking ship", and wouldn't be paid until other staff had been.

Lily Stojanova worked unpaid between October 2015 and March 2016 as a result of Trajkov's excessive spending.

"[Ms Stojanova] (and I infer, many others involved in the centre) believed in [Trajkov]. He let them all down," Ms Tran said in her judgement.

Trajkov purchased alcohol for daughter's restaurant

Between February 2013 and March 31, 2016, Trajkov used the association's money to buy $44,890 worth of alcohol, including $7,960 in just one month.

The majority of those purchases were at a liquor store in Preston, just 2 kilometres away from a restaurant owned by one of Trajkov's daughters.

Under cross examination, Trajkov conceded he had purchased alcohol for the New Europe restaurant using money from the association's account.

He also said some of the money went to a social club he was a member of, but that it was always repaid.

During the same period, Trajkov spent more than $150,000 of the association's money on fashion, lingerie and jewellery, and more than $45,000 on flights and accommodation in Melbourne and Sydney.

Receipts provided by Trajkov, which were ruled to have not been legitimate expenses of the childcare centre, included an electricity bill for a retail shop in Brunswick, more than $600 in energy drinks, and a prescription for Cialis, a medication commonly used to treat erectile dysfunction.

Ms Tran refused to accept Trajkov's claim that he had repaid all of his private expenses, and ruled that his actions were a significant breach of his duties to the association.

"[Mr Trajkov] proved himself willing to spend funds from the association's bank account on private expenses on hundreds of occasions," Ms Tran ruled.

The association's liquidator, David Vasudevan from Pitcher Partners, had sought more than $3.5 million from Trajkov, but Ms Tran accepted that a number of expenses were for the use of the childcare centre, despite there being little evidence to support his claims.

In her judgement, handed down last week, Ms Tran noted that more than $200,000 in cash withdrawn by Trajkov from the association's bank account was "wholly unaccounted for".

Trajkov also transferred more than $190,000 of the association's money to his wife, Slobodanka.

Trajkov did not return phone calls or text messages requesting comment.