Natalie Crozier, now current headteacher at Annie Lennard Primary, Smethwick, made the remark against her predecessor Michelle Hollingsworth at Wolverhampton Crown Court.
Hollingsworth, alongside former school secretary Deborah Jones, are accused of plundered the school’s funds in fraud alleged to have involved hundreds of thousands of pounds.
Ms Crozier was cross-examined by William Dudley who is defending Jones.
He asked Ms Crozier whether she “could be manipulative to get what she wanted” - to which she replied “yes”.
However Ms Crozier did not agree with Mr Dudley’s suggestion that Hollingsworth could “passive aggressive”.
“I didn’t witness that,” Ms Crozier told the court.
The jury heard claims earlier in the trial that Hollingsworth, aged 55, and Jones, 57, went to boutiques and stores selling expensive designer goods and antiques.
They spent up to £16,000-a-time during a series of spending sprees as part of a fraud, the court heard earlier this month.
It was alleged by Mark Jackson, prosecuting, that they were using school cheques to purchase a wide range of goods.
The court heard that a carpenter called Robert McKeown was paid more than £40,500 for work allegedly done at the school.
However most of it was “not carried out”, Mr Jackson told the court.
Mr Jackson told the jury that McKeown had pleaded guilty to conspiring with the headteacher to defraud the school and Sandwell Council.
In 2015, Hollingsworth, of Hatherton Park, Cannock, had told staff that the school had no money because it was short changed by the local authority.
Staff had to buy basic materials with their own money and a pay rise was rejected, it was heard.
At the trial on Wednesday, Ms Crozier spoke of having been told that the school was struggling with finances.
Mr Dudley asked her: “You told us that in October, it was relayed to you that the school had no money. Did that take place at an almost specially conveyed meeting of staff?”
Ms Crozier replied: “Yes that was in October  that the message was relayed.”
The trial continues.