A damning Auditor-General report has placed the City of Johannesburg under renewed pressure, revealing that R9.5 billion in revenue across municipal entities has been written off as irrecoverable. The findings also indicate the city cannot substantiate nearly R900 million it claims is owed by consumers, intensifying questions about financial oversight and governance.
Julia Fish, managing director of JoburgCAN, outlined the severe consequences of these fiscal shortfalls. “When revenue is written off at this scale, the city struggles to cover its most critical costs: purchasing electricity from Eskom and water from Rand Water,” Fish explained. She highlighted that Eskom has already issued a formal notice regarding the city’s repeated payment defaults and warned of potential power disconnections—a scenario that would directly impact residents’ access to essential services.
The release of these findings during an election year for local government adds a layer of political sensitivity. While municipal officials maintain that R900 million remains outstanding primarily from consumer accounts, the Auditor-General has consistently stated that supporting documentation for this figure is lacking. Fish characterized the city’s billing infrastructure as deeply problematic, noting widespread resident complaints about erroneous charges, fees for services never rendered, and unexplained penalty assessments. Several class-action lawsuits challenging municipal tariffs further obscure the legitimacy of the claimed debt.
Audit outcomes present a mixed picture: while the consolidated report covering all city entities received an unqualified opinion, the core municipality itself was issued a qualified audit. This distinction reflects systemic issues, including an inability to track municipal activities, deficiencies in financial reporting, and insufficient accountability measures for irregular spending.
Fish also questioned whether the R900 million consumer debt figure accounts for households legally entitled to relief. National Treasury’s equitable share grant is designed to offset rising utility costs for low-income residents—electricity tariffs have increased approximately 400% over the past decade—but Fish noted this funding is not consistently reaching the entities responsible for service delivery. This gap, she argued, artificially inflates outstanding debt records.
Even assuming the R900 million claim is accurate, it remains dwarfed by the R9.5 billion already deemed unrecoverable. Municipal efforts to address non-revenue losses—including repairs to infrastructure leaks and action against illegal connections—are underway, but Fish emphasized that coordinated technical assistance from Rand Water, the Department of Water and Sanitation, and Eskom is essential for meaningful progress. Compounding the challenge, the city’s Integrated Development Plan projects that debt impairment could rise to 45% within three years, suggesting limited recovery prospects. Additional complications stem from hijacked or abandoned properties, where delayed service disconnections allow arrears to accumulate unchecked.
Infrastructure maintenance remains critically under-resourced. The Auditor-General reported that only 4% of the municipal budget is allocated to maintenance, falling short of the Treasury’s recommended 8% of asset value. Approximately 45% of bulk water purchased from Rand Water is lost to non-revenue causes, including leaks and unauthorized connections, with power distribution experiencing similar losses of around 30%. The city contends with a R220 billion infrastructure backlog spanning roads, reservoirs, and other critical assets. Although the most recent budget, approved last Thursday, raised the maintenance allocation to the Treasury benchmark of 8%, Fish argued that years of deferred investment necessitate a more aggressive target. Turnaround plans for Joburg Water and City Power remain underfunded, with current operational budgets covering only half of projected requirements.
The municipality’s liquidity position is precarious, with just 15 days of cash coverage available to meet immediate obligations. Contractor payments have reportedly been delayed by up to 300 days, far exceeding the standard 30-day payment term. Fish pointed to a stark imbalance between the city’s approximately R90 billion operations budget and its R8 billion capital budget dedicated to new infrastructure development. Personnel expenses absorb roughly 30% of operational spending, a burden amplified by a decentralized structure: each of the city’s 13 entities maintains separate governance bodies and executive teams, with remuneration packages in some cases doubling the city manager’s salary.
Advocating for targeted fiscal restraint, Fish called for reductions in senior management compensation while endorsing agreements that improve wages for frontline municipal workers. She also identified redundant, non-integrated IT systems and excessive licensing expenditures as opportunities for cost rationalization. Furthermore, the city continues to lease external office space despite the Johannesburg Property Company holding vacant municipal buildings that could accommodate administrative functions.
“Transparency and accountability must drive every intervention,” Fish concluded. “Without verifiable reporting, enforced consequence management, and disciplined budgeting, Johannesburg risks perpetuating a cycle of financial loss and deteriorating public services.”