Corruption allegations surround the installation of a life-size bronze statue of the late Australian boxer Lionel Rose in a Victorian Gippsland town.

Rose, who died in 2011 was the first indigenous Australian to win a world boxing title, and was born in Jacksons Track near Warragul.

A senate estimates committee has been told the former chief executive of the National Centre for Indigenous Excellence (NCIE), Jason Glanville, made an unauthorised donation from a charitable trust of $12,000 toward the statue.

The NCIE is a charity offshoot of the Indigenous Land Corporation (ILC) that runs arts, cultural sports and health programs for 5000 Aboriginal youth.

It is running at a $1 million loss each year, the hearing in Canberra on Friday was told.

ILC chief operating officer Jodie Lindsay told the senate committee Mr Glanville "did act outside his authority" in making the contribution toward the statute.

Liberal frontbencher Nigel Scullion told the hearing NCIE board co-chairs Ian Ferrier and Sam Jefferies had instructed Mr Glanville to repay the money.

Asked if he had, Ms Lindsay replied: "No he hasn't."

Senator Scullion asked why Mr Ferrier was dumped from the board and why co-chair Mr Jefferies was demoted from his deputy role during board changes last year, and whether there had been any lobbying from Mr Glanville on the matter.

"I can't comment on any lobbying that may have been done... it would surprise me if there wasn't lobbying," ICL chief executive Bruce Gemmell said.

Mr Gemmell said the ILC would look into the issue.

Senator Scullion told the hearing that from an outsider's perspective the handling of the matter "smacks of corruption."

"The two people who have complained about it get slapped," Senator Scullion said.

Comment is being sought from Mr Glanville, a Wiradjuri from southwest NSW who is on the Reconciliation Australia Board.