A string of slips: When one financial error becomes the final straw

On the Case: A string of slips: When one financial error becomes the final straw

4 months ago

David van den Bergh

Author: Nicky Hardwick

A senior finance officer with years of experience argued she didn’t mean to make the mistake that nearly cost her organisation over R180,000 in misallocated VAT, but it wasn’t her first slip. We examine when errors move from excusable to intolerable, and what employers can do when performance issues start adding up.

This case explores a disciplinary hearing involving a senior finance employee whose failure to take ownership led to a recommendation for demotion, and serves as a warning about the limits of “I didn’t mean to.”

In any business, finance is one of the most trust-dependent areas. When mistakes happen, they can be costly. But what happens when the person making the mistake believes their role is only to prepare, not to take accountability?

This case involved a financial accountant who, despite 20+ years of experience, failed to apply basic accounting principles, resulting in a potential financial loss of over R180,000. The error was only caught by chance.

The employee incorrectly processed VAT transactions in two separate trust statements. The error wasn’t minor, it effectively double-counted VAT and would have led to a significant underpayment to the organisation.

When the matter was investigated, the employee argued the mistake wasn’t deliberate, there was no written policy for the specific transaction, the General Manager should have reviewed and caught the error and no actual loss occurred because the GM eventually picked it up.

The finding

The chairperson found the employee guilty of gross negligence, explaining that:

Negligence doesn’t require intent, it is the failure to take reasonable care.
With her qualifications, the employee should have recognised the error. She acknowledged the transaction was not VATable, yet still processed it incorrectly.
Attempting to shift accountability to a manager did not absolve her. As the most senior person in the finance department, the responsibility stopped with her.

The chairperson also considered a pattern of financial errors in previous months, including:

Incorrect bonus calculations
Over-deductions on salaries
Failure to reconcile medical aid accounts
Inaccurate external submissions
Unauthorised changes to payroll protocol

Despite some mitigating factors, including the employee’s successful VAT recovery work in the past, the outcome was clear: the trust in her role had been broken.

The core lesson: Negligence is not about intent

A recurring theme in disciplinary cases is the defence: “I didn’t mean to.”

But negligence is about outcome, not intent. In law and in employment practice, the question is:

“Did the employee meet the standard of care expected of someone in their position?” In this case, the answer was no.

Blaming a manager or pointing to the absence of a written policy does not stand when:

The mistake is one that a person with her level of skill should have caught.
There was ample opportunity to double-check her own work.
The consequences could have been severe, had someone else not noticed in time.

How employers can mitigate this risk

1. Clarify ultimate responsibility: Even with layered review processes, someone must be the final accountable party. Make sure this is clear.

2. Don’t confuse cooperation with abdication: Just because a manager signs off, doesn’t mean the preparer is off the hook.

3. Intent is not always the issue: Your policies and job profiles should define standards of care, not just expectations of good intent.

4. Ensure your job profiles reflect accountability: In this case, the role required independent judgment. If that is expected, your documentation should support it.

5. Train leaders to stop errors before they escalate: Errors often surface in patterns. Equip your management team to spot and act early.

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