A former Johannesburg primary school principal has failed in her attempt to overturn her dismissal after an arbitration ruling found that she had committed serious financial misconduct involving hundreds of thousands of rand in undocumented cash withdrawals.
The Education Labour Relations Council (ELRC) ruled that the Gauteng Department of Education (GDE) acted fairly when it dismissed Selinah Moloi, the former principal of Montshiwa Primary School in the Johannesburg Central District.
In an arbitration award handed down on 26 June 2026, arbitrator Gcina Mafani found that Moloi had failed to meet the high standard of financial accountability expected of a school principal, rejecting her argument that a lack of formal financial management training excused her conduct.
Forensic investigation uncovered extensive irregularities
The disciplinary matter originated from a whistleblower complaint submitted to the Gauteng Department of Education, prompting a forensic investigation by independent auditors.
The investigation examined the school’s financial records between January 2023 and June 2024 and revealed widespread irregularities while the school’s bank card remained under Moloi’s control.
Investigators found that R422,936.07 had been withdrawn from the school’s bank account without supporting documentation such as invoices, requisition forms, payment approvals or School Governing Body (SGB) resolutions. In addition, total cash withdrawals amounted to R512,240, far exceeding the department’s annual petty cash limit of R36,000.
The auditors concluded that the absence of proper records made it impossible to verify how the money had been spent or whether the expenditure benefited the school.
Principal blamed lack of training
During the arbitration proceedings, Moloi maintained that the funds had been used for legitimate school expenses, including maintenance work, school events, learner outings and staff recognition programmes.
However, she was unable to produce receipts, invoices, payment vouchers, bank records or any documentary evidence to support those claims.
Represented by the South African Democratic Teachers Union (SADTU), Moloi argued that she had assumed the position during the disruptions caused by the COVID-19 pandemic and had never received formal induction or financial management training.
She further claimed she was unaware of Gauteng Department of Education Circular 2 of 2021, which limits petty cash withdrawals to R3,000 per month and requires electronic fund transfers (EFTs) to be used as the department’s preferred payment method.
Moloi told the arbitration that several local service providers preferred cash because they did not have bank accounts. She said she withdrew larger amounts and retained the remaining cash for future school-related expenses.
Department rejects ignorance defence
The Gauteng Department of Education disputed Moloi’s explanation.
Labour Relations Deputy Director Kgomotso Tshiovhe testified that the financial management circular had been distributed electronically to principals and departmental staff through the department’s internal communication system.
Tshiovhe argued that school principals occupy senior leadership positions and are expected to familiarise themselves with departmental policies, legislation and financial controls without waiting for formal instruction.
The department further submitted that principals are designated accounting officers within their schools and carry ultimate responsibility for ensuring that public funds are managed lawfully, transparently and in accordance with prescribed financial procedures.
SGB chairperson’s evidence weakened the defence
Moloi’s case suffered a significant setback during the testimony of School Governing Body chairperson Anna Madonsela.
Although Madonsela initially sought to defend the former principal by stating that the governing body had verbally discussed certain school expenditures, she conceded under cross-examination that the scale of the cash withdrawals was alarming.
She admitted she was surprised by the absence of receipts, financial records and official governing body resolutions authorising the transactions.
The arbitration also noted that the school’s treasurer, who allegedly approved some of the withdrawals, was not called by the defence to testify, leaving key aspects of Moloi’s version uncorroborated.
Arbitrator finds trust relationship destroyed
In his ruling, Mafani found that Moloi’s own evidence demonstrated that she understood the financial procedures required when handling school funds, despite claiming she lacked formal training.
He held that ignorance of departmental policies could not excuse non-compliance, particularly for someone entrusted with managing public money.
Mafani emphasised that principals have a legal and professional duty to familiarise themselves with all financial policies governing their responsibilities. That obligation, he found, forms part of the inherent responsibilities attached to the position.
The arbitrator also noted that public officials entrusted with state funds must be able to account for every transaction through proper documentation. Where that accountability is absent, serious misconduct may be established even if there is no direct evidence that the money was used for personal enrichment.
Given the magnitude of the undocumented withdrawals and the complete absence of supporting financial records, Mafani concluded that the employment relationship had broken down irreparably and that the department could no longer place its trust in Moloi.
Dismissal upheld
The ELRC ultimately dismissed Moloi’s application, ruling that her dismissal was both procedurally and substantively fair.
The decision reinforces the responsibility placed on school principals to safeguard public funds and comply with financial management regulations designed to promote transparency and accountability within South Africa’s public education system.
The ruling also serves as a reminder that failures in financial oversight, record-keeping and compliance with departmental policies can amount to serious misconduct warranting dismissal, particularly where public funds are involved.
