The Hoërskool Waterkloof's governing body is considering civil and criminal prosecution against culprits involved in the alleged mismanagement of the school's funds, amounting to R5-million.
In a statement on the school's website, Lukas Coetsee, the chairman of the governing body, said the principal, Dr Christo Becker, had "borrowed" R500 000 interest-free from the school without permission, but had since repaid it.
He said the principal and one of his deputies, Andre Eloff, had said they would not resign as had been previously stated.
The dark cloud hovering over the prestigious school comes after the governing body called for a forensic audit that indicated things were not well financially.
Following the audit, Becker and Eloff indicated they would resign.
Two women in the financial department were reported to be on forced leave.
The statement said that during 2005 and 2006 the governing body had requested an internal investigation regarding the school's finances, following complaints.
No irregularities were found, but structural changes were made, with Eloff replaced as deputy principal responsible for finance.
During the annual meeting in October 2006, the governing body received more complaints from parents. The following year there were even more rumours that Becker and Eloff were gaining "unjust privileges from school funds".
The governing body requested an external audit. Again no irregularities were found.
However, according to the statement, Becker admitted to Coetsee on November 26 last year that he had "borrowed" R500 000 without permission from the school's Aviation Academy, an Article 12 company (non-profit organisation), in 2006.
"The fact that this was an interest-free loan on its own was problematic and an emergency meeting with the executive management of the governing body was held," the statement continued.
Forensic auditors were called to investigate the Aviation Academy.
It was found that there was a "secret" account, named INTEX, at the school. Money was allegedly misused and channelled to the INTEX account without permission.
"The final forensic result showed that Dr LC Becker, Mr AD Eloff, Ms H van der Merwe and Ms J van Staden were implicated in these irregularities," the statement said.
"The amount in question is about R5-million."
The problem was not due to inadequate procedures or control mechanisms, but to the "apparent blatant and deliberate attempts by individuals to ignore and side-step procedures to bring about these unlawful payments", Coetsee said.
The governing body assured parents and pupils that there was a comprehensive strategy plan to protect the school's interests.
Becker has since informed the school through a lawyer's letter that he would not resign, while Eloff did the same via a spokesperson.
Coetsee said there were discussions with the Gauteng Education Department to mete out the correct disciplinary procedures against the persons implicated.
They were also in the process of appointing temporary personnel.
"The governing body is in the process of obtaining legal advice regarding a possible civil suit to regain the lost funds, legal steps regarding the Aviation Academy and the contravention of the Companies Act, and criminal prosecution of the parties involved," said the statement.
The governing body, however, made it clear that it regarded no one as guilty until they had the opportunity to prove their innocence.