This edition unpacks a real-world case of financial negligence and explores why seniority without ownership can put your organisation at risk.
In any business, especially in finance, trust is everything. Employees in senior financial roles are expected to be meticulous, precise, and ultimately responsible.
But what happens when that trust is breached—not through malice, but through consistent carelessness?
This case involved a seasoned finance employee whose repeated errors, paired with a refusal to accept responsibility, raised a critical question:
Can we still trust this person in a position of authority?
The Background
A senior financial officer processed two VAT-related transactions incorrectly—allocating VAT where it wasn’t due and potentially costing the organisation nearly R185,000.
She argued:
- It wasn’t intentional.
- There was no written policy.
- A more senior manager had approved the documents.
- No actual loss occurred since the mistake was later picked up.
The Finding
The chairperson ruled this to be gross negligence.
Why?
- The employee had over 20 years of experience in financial accounting.
- She understood VATable vs non-VATable transactions—by her own admission.
- She failed to apply fundamental principles like debit/credit balancing.
- She attempted to shift accountability onto others, despite being the most senior person in the finance function.
Her past errors were also considered:
- Incorrect payroll deductions
- Misapplied medical aid contributions
- Underpayment on statutory submissions
- Inaccurate bonus calculations
- Process changes made without approval
The cumulative effect? A breakdown of trust in her ability to perform her role reliably and independently.
The Myth of “I Didn’t Mean To”
A key takeaway from this case is a reminder that intent is not the only thing that matters.
Negligence is not about whether someone meant to do harm—it’s about failing to take proper care, especially when the stakes are high.
If someone in a senior role repeatedly makes preventable mistakes, even good intentions cannot justify continued risk.
What Employers Can Learn
1. Make accountability explicit
Job profiles, protocols and processes must clearly define who carries final responsibility—not just who prepares.
2. Challenge the “intent” defence
Just because a mistake wasn’t malicious doesn’t mean it’s harmless. Consequences matter.
3. Watch for patterns
One error might be forgivable. A string of them—especially unacknowledged—signals a deeper issue.
4. Provide appropriate oversight
Even senior staff need monitoring when trust is in question. Checks and balances are critical.
5. Consider role restructuring
In this case, the outcome was not dismissal, but a recommended demotion. When trust in someone’s level is broken, they may still have value—but not in a leadership role.
How We Can Help
We support employers by:
- Leading or advising on disciplinary processes
- Clarifying accountability in role design
- Conducting skills vs responsibility audits
- Offering financial protocol training and controls reviews
Need help protecting your organisation from unintentional risk? Reach out to us at [[email protected]]
COMING UP NEXT in “On the Case”
When Passion Crosses the Line – an employee’s undisclosed business partnership, involvement of family members in related work, and lack of transparency led to the breakdown of trust in a high-integrity organisation.
What this case teaches us about manipulation, vulnerability, and the importance of clear boundaries in the workplace.