Deborah Jones, secretary at Annie Lennard Primary in Smethwick, said in an interview which was read out at Wolverhampton Crown Court that headteacher Michelle Hollingsworth "concocted the whole thing" and paid businesses for work which had "never been into the school", said Mr Mark Jackson, prosecuting.
The two women are accused of going on spending sprees at boutique shops during which handbags, shoes and furniture were bought with school cheques with purchase orders claiming the goods were educational.
It was alleged they had items put to one side until the cheque was cleared and then returned to collect them, ignoring offers of free delivery.
According to Mr Jackson, in an interview 57-year-old Jones denied receiving money for herself, that she had got rid of any paperwork from the school and she said that Hollingsworth knew how to use a computer.
"She accepted £75,000 had been paid for work that had never been done," he added.
"She said she knew that she was going to get into a lot of trouble.
"She said Hollingsworth concocted the whole thing, and paid businesses who never came into the school."
Jones said she was "scared" of the Hollingsworth family, and that Hollingsworth had offered her money to take the blame, the court heard.
Meanwhile, an interview transcript was also read out from Elaine Dewsbury, a family member of Hollingsworth, in which she was shown a note in her handwriting which said "if anyone catches on to this it will blow up massively and an investigation will go on for years", said Mr Jackson.
Elaine Dewsbury agreed it was her handwriting but said she was writing down her now ex-boyfriend's thoughts to help him, Wolverhampton Crown Court heard.
Mr Jackson said that in the interview Elaine Dewsbury was asked if she was "instructing him what to do", and she replied "no".
He added: "She said to officers 'I write things down all the time like flow charts to get them out of my head, so I thought it would help him'."
And in another interview read out by Mr Jackson, Elaine Dewsbury's father Michael Dewsbury told officers her now ex-partner told him he had been overpaid £20,000 by a school.
Mr Jackson said: "Mr Dewsbury said 'I did have a meeting with him about two years ago because he'd been overpaid on a job, not to do with Annie Lennard, and I said pay the money back, he says but it's £20,000'."
Meanwhile, a council P.E. worker was questioned in an interview about why his invoices grew from £700 to £3,000.
Nathan Cooper worked for Sandwell Council and held P.E. lessons and summer camps at the school, the court heard.
Cooper, 28, was asked why he invoiced the school £3,000 for an Easter sports camp when the previous camp was £700, the court heard.
He replied that the Easter one was "busier", Mr Jackson said.
Mr Jackson said: "Mr Cooper said sometimes the headteacher would say more work, more equipment."
Cooper, of Pebble Mill Drive, Cannock, denies conspiracy to defraud.
Jones, from Barrs Road, Cradley Heath, has pleaded guilty to conspiring with the headteacher to defraud the school and Sandwell Council.
She denies allegations that she conspired with others in the fraud that allegedly ran between June 2009 and October 2015.
Hollingsworth, 55, from Hatherton Park, Cannock, denies all charges of conspiring with a variety of people, including the school secretary, to defraud.
She also denies attempting to pervert the course of justice.
Elaine, 29, and Michael Dewsbury, 54, both of Hatherton Park, Cannock, deny attempted to pervert the course of justice.
The trial continues.