Michelle Hollingsworth, head of Annie Lennard Primary in Smethwick, also disputed that she was “trying to give an impression of naivety” regarding the financial management of the school.
She had earlier claimed she was “not good at financing” and could not use a computer, maintaining that Deborah Jones, the school secretary, was in charge of spending.
The two women are said to have gone on spending sprees, buying handbags, shoes, clothes and furniture using school cheques, with purchase orders claiming the goods were educational.
But defence barrister Mr William Dudley suggested to her: “You knew exactly what payments the school was making and the impression of naivety you’ve been trying to give is just not true, is it? You told Mrs Jones what to put down on the financial management forms.”
Hollingsworth replied: “Definitely not. I didn’t understand. I trusted Mrs Jones. She would do anything for anybody, she was very capable.”
Mr Dudley went on: “You’ve been defrauding the school and you don’t care who you take down with you. You’ve been lying through your teeth to the bitter end.”
The 55-year-old head insisted she had been telling the truth and also denied offering Jones £30,000 to “take the rap” in late September 2015 during a meeting at her Cannock home after realising that the five-year fraud was unravelling.
She claimed Jones had visited her to ask for a loan of £750 towards her daughter’s wedding as her husband was not working and they were having financial difficulties.
Hollingsworth said: “I didn’t know any fraud had been committed and I did not offer her any money. I’d already loaned her £1,500 which she hadn’t paid back.
"There was no way I was going to get my money back if she was still in difficulties.”
The jury heard that her sister-in-law Fiona Dewsbury, who specialised in teaching dyslexic children, had been hired to improve the school’s teaching in this area, being paid £12,000 between November 2014 and July 2015.
But when she asked the head for a reference setting out the work she had done, it was suggested she was given purchase orders.
When Dewsbury queried such a move, Hollingsworth promised to get back to her but never did.
The head agreed that Dewsbury was very angry with her and “absolutely devastated” to be implicated in the alleged conspiracy.
The two women had not spoken “for years” as a result, she said.
Jones, of Barrs Road, Cradley Heath, admits conspiring with the headteacher to defraud Sandwell Council and the Annie Lennard School but denied all alleged frauds involving other people
Michelle Hollingsworth, of Hatherton Park, Cannock, denies the conspiracy and all other charges against her.
Dewsbury, also of Hatherton Park, denies the offence.
Others in the dock are also alleged to be part of the conspiracy.
The case continues.