Dugan was pictured out with friends last weekend, well after the NRL had moved all Sydney-based NRL players to a tighter level of COVID restrictions than the general public.
Dropped to reserve grade during this year's Origin window, Dugan's form has been up and down for the Sharks this season and there is no guarantee he will land an NRL contract for next year, with the Sharks reportedly telling the centre he is unwanted in the Shire.
Coach Hannay, who took over from the sacked John Morris earlier in the season, stated Dugan is yet to contact him.
“Josh is in isolation and we haven’t had any contact with Josh since the incident," Hannay said.
“At some point, in the next couple of weeks, he will come back into the bubble and we will have a face to face then.”
"What I will say is that as a club we are extremely disappointed with those actions.
"I think every single player, staff member and employee of the NRL right now has to understand the bigger picture and the importance of their actions and doing the right thing and how delicate the situation is at the moment.
"We need everyone doing the right thing at the moment, we need all hands on deck and we are extremely disappointed by Josh’s actions."