BUDGET CRISIS: Joburg’s ‘unrealistic revenue targets’ led to R2bn unauthorised expenditure, Auditor-General finds

With water and electricity losses topping R8.5-billion and a massive R220-billion infrastructure backlog, the Auditor-General’s office has warned that Joburg’s underfunded budgets are crippling service delivery.

The latest report from the Auditor-General on the City of Johannesburg’s consolidated financial statements shows that poor management, weak accountability mechanisms, and deteriorating infrastructure have led to high levels of irregular expenditure.

In the 2024/25 financial year, Joburg achieved an unqualified audit with findings for the 11th year in a row and recorded R3.69-billion in irregular expenditure, R2.38-billion in unauthorised expenditure, and R943-million in fruitless and wasteful expenditure.

These results were presented in a parliamentary briefing by the Auditor-General of South Africa on Tuesday, 2 June 2026. The Auditor-General’s Gauteng business unit leader, Fhumulani Rabonda, warned that nearly 80% of the City’s municipal entities were in the amber, and had been for several years, indicating that they had given “false assurances”.

“The reason we call it false assurance is that we cannot be comfortable with an environment that has credible financial statements that are published but they are not complying with the law, or their performance report has material misstatements,” explained Rabonda.

Key basic infrastructure entities like City Power, Johannesburg Water, Pikitup and Johannesburg Road Agency have been in the amber for more than 10 years, meaning that the Auditor-General has made material findings on their statements.

“It means that throughout the financial year, [leadership] may have been making decisions based on information that is not reliable, or you are actually maintaining an environment that has a disregard for the law, and we know that an environment that has a disregard for the law is a fertile ground for unscrupulous conduct to happen.”

Rabonda said that separate municipal entities received qualified audits with opinions due to weak accountability mechanisms, which inconsistently enforced compliance, financial management and effective oversight. Their material findings included significant backlogs that delayed investigations into unauthorised, fruitless and wasteful expenditure, and poor compliance controls.

The City, on its own, received a qualified audit, but was categorised as unqualified with findings when its various entities were considered.

One of the key issues the Auditor-General flagged was Johannesburg’s 2024/25 budget being unfunded, meaning that the expenditure had been planned to be funde