Gauteng education MEC Angie Motshekga did not benefit financially or act dishonestly in recommending a particular trust for a contract, a report released on Tuesday said.
Motshekga's conduct in her position as MEC was, however, found to be unacceptable.
"No member of the legislature, and especially an MEC, should allow herself/himself to develop such a close relationship with an organisation that it can lead to an impression that there lurks the motive of personal gain," the Gauteng Legislature's Integrity Commission found.
The Integrity Commission handed its findings to the Gauteng provincial Privileges and Ethics Committee in November.
The commission investigated media allegations that Motshekga and her family had benefited financially from the Sediba Trust.
According to media reports, Motshekga had recommended Sediba be given a six percent empowerment holding in AllPay, Gauteng.
Motshekga's husband Mathole Motshekga was allegedly a director of Sediba who helped set up the trust.
The commission found was no indication that she had benefited financially from this recommendation and no evidence that the recommendation was not based on merit.
She should however have acted beyond reproach when asked for a recommendation.
"The MEC's duty... is not only to make an honest recommendation but also to make full disclosure of any background information and any personal involvement which could reasonably affect the decision of the body seeking guidance, in this case AllPay Gauteng or Absa.
"MEC Motshekga should therefore have given details to those institutions of her association with Sediba and with political associates involved in the trust," the report said.
The report found that Motshekga's husband had not benefited financially from his involvement in Sediba.
He was paid only R5 000 as a fee for the registration of the trust. Although he was listed as a director of Sediba, this appeared to have been done to satisfy the requirements of registration.
The report found he later made way for more permanent trustees.
According to media reports, Motshekga was paid R50 000 by Sediba.
This money was destined for an organisation called Thibolaka Bophelelong, the report found.
As the organisation had a problem with its bank account, Motshekga was made the payee.
She then handed R30 000 in cash to a courier. She did not give him the full amount because she thought that might be unsafe.
Motshekga then left for Tanzania on business and when she returned she paid the outstanding R20 000.
The report found Motshekga's involvement in this transaction showed particularly poor judgment, but she did not at dishonestly.
"Accepting the payment into her own account immediately placed herself under an obligation to the real donee to pay the money over and at the same time created a situation which could readily be misconstrued as MEC Motshekga deriving a personal benefit from the donation."
The committee found Motshekga had breached the provincial code of conduct, and should therefore apologise to the Gauteng provincial legislature.
She was also cautioned to ensure she does not give the impression of preferential treatment, and warned to keep her public and private relations and finances strictly separate.
A forensic investigation by Absa/All Pay had not yet been concluded.
Gauteng Premier Mbhazima Shilowa said in a statement on Tuesday he accepted the report's findings.
The Democratic Alliance said it supported the report. "The report sets a very high standard for the conduct of MECs in avoiding even the impression of political favouritism in the award of contracts.
"It sets an excellent precedent for provincial ministers to adhere to," said DA Gauteng Chief Whip Jack Bloom in a statement. - Sapa