Shai claimed in Parliament that the chief executive in Madonsela's office, Themba Mthethwa, fraudulently signed off his own performance assessment to score a bonus in 2010.
This he allegedly did by obtaining her signature under false pretences while she was in hospital.
Shai was appearing before the National Assembly's portfolio committee on justice and constitutional development to back up allegations contained in a dossier she sent to Parliament in September in which she claimed Madonsela and some of her managers had committed serious financial and tender irregularities.
Shai also had running battles with Madonsela's predecessor Lawrence Mushwana.
This led to Parliament setting up a committee to probe her allegations. However, in the end no one was found guilty.
Shai stunned MPs when she claimed Madonsela would hurl "ugly" words at her in front of junior staff and barge into her office to remove documents containing "incriminating" evidence against Mthethwa without her consent.
But Madonsela hit back, claiming Shai "was lying through her teeth".
Madonsela said she would prove Shai was not telling the truth because all their staff meetings were taped.
"All I can say is that all our executive committee meetings are recorded and there are minutes ... I really don't have any comment on this. All I know is I will give my side of the story," she said.
But MPs across the political spectrum were not swayed by Shai's allegations, claiming they were "too vague", "too wide-ranging" and amounted to "office politics" that should not be entertained by Parliament.
Committee chairman Luwellyn Landers said MPs would only decide in January whether to investigate the allegations or not.