Hundreds of thousands of dollars in government funding for disaster relief may have ended up in the pockets of New South Wales Rural Fire Service (RFS) employees, a corruption inquiry in Sydney has been told.

The Independent Commission Against Corruption (ICAC) also heard from a caterer who said he would share "skimmed" profits with an RFS contracts officer.

The ICAC is investigating whether several RFS staff members accepted money as a reward for securing the services of several companies.

The companies have been identified as D'Vine Tastes and Emergency Management Catering Services (EMCS), both of which are operated by Scott Homsey.

Between 2011 and 2015 Mr Homsey invoiced the RFS more than $8 million for providing snack packs.

Counsel assisting the commission, Ben Katekar, said the inquiry would investigate whether the RFS employees were paid by Mr Homsey to award the contracts to his companies.

"Those funds had been made available to the New South Wales Rural Fire Service by the state and Commonwealth governments to ensure that disaster relief is supplied immediately and effectively to those who are seriously in need," Mr Katekar said.

He said the inquiry would examine how relaxed procurement procedures adopted by the RFS between 2011 and 2015 "led to the diversion of substantial public funds into a small number of private pockets".

Caterer gives evidence of kickbacks

Mr Homsey told the inquiry he had undersupplied the RFS, but charged it the full amount, for services ordered by RFS contracts officer Arthur John Hacking.

He said he would then share the profits with Mr Hacking.

The "skimmed" profits would vary between 10 and 20 per cent of a total order.

The ICAC was played a recording of a telephone call, in which the two men discuss a so-called "deal".

It also saw a video of the two men meeting, during which Mr Homsey said he handed over $20,000 in cash to Mr Hacking.

Hundreds of thousands in payments

Mr Katekar told the hearing the payments included an estimated $400,000 to Mr Hacking.

Mr Hacking reported to Paul Springett, who held the title of manager procurement, executive services at the RFS.

"Mr Hacking had a delegated financial authority of zero dollars," Mr Katekar said.

"Mr Springett's delegated authority was limited to $20,000."

The inquiry heard Mr Hacking's brother, Darren Hacking, worked for Mr Homsey and was an RFS volunteer.

He was named as a person of interest at the inquiry.

Mr Homsey's mother, Gay Homsey, has also been called to give evidence.

Increase of orders despite fewer emergencies

The hearing has been told snack packs were provided to the RFS by Corrective Services NSW until 2011.

Mr Homsey was later appointed the exclusive provider because of the logistical obstacles of having snack packs delivered from within a prison during an emergency event.

Mr Katekar said Mr Homsey began to increase the number of snack packs supplied to the RFS, more than doubling the order in a single year.

The increase appears to be at odds with the number of fire emergencies, with a substantial drop in the number of declarations made by the RFS in recent years.

In 2009-2010, the RFS commissioner made 50 declarations relating to major bushfires, compared to 19 declarations in 2013-2014.

Invoices paid for undelivered orders

The invoices were still paid, despite the fact that Mr Homsey did not deliver the number of snack packs he promised.

"From about October 2012 to about June 2014, Mr Homsey undersupplied the New South Wales Rural Fire Service by about 10 per cent," Mr Katekar told the hearing.

"For each invoice of, say, 10,000 snack packs, Mr Homsey would deliver only 9,000.

"The invoices for 10,000 snack packs were nevertheless paid."

Mr Katekar said the ICAC would investigate how that was permitted to happen.

The inquiry will also examine the use of mobile telephones, electronic tablets and other computer hardware without authority.

It is expected to continue for up to a week.