The Auditor-General of South Africa has revealed that the City of Johannesburg recorded revenue losses amounting to R9.5 billion across its entities, with the funds effectively written off as irrecoverable.
The findings were presented to Parliament’s Standing Committee on Public Accounts (Scopa) during a briefing on the city’s audited financial statements for the 2024/25 financial year.
Auditors also questioned the municipality’s claims that approximately R900 million remains owed by consumers, stating that the city was unable to provide sufficient evidence to support the figure.
According to the Auditor-General’s office, weak management controls within the city’s water and electricity entities make it difficult to accurately determine the full extent of financial losses.
Electricity losses accounted for the largest share of the revenue shortfall, amounting to R5.7 billion during the financial year under review.
Of this amount, R3.9 billion was attributed to non-technical losses, including electricity theft, meter tampering, bypassed meters, faulty transformers and billing errors.
Auditor-General Gauteng Business Unit leader Fhumulani Rabonda said these issues result in electricity consumption that cannot be accurately measured or billed, causing substantial revenue losses for the municipality.
Water losses were estimated at R2.8 billion, with approximately R2 billion linked to leaks within the water network.
The remaining losses were attributed to illegal water connections, metering inaccuracies and billing failures.
According to the Auditor-General, nearly 45% of the bulk water purchased by the city from Rand Water could not be billed to consumers due to losses within the system.
The report also highlighted concerns over the city’s infrastructure maintenance spending.
Auditors noted that the municipality currently spends only about 4% of its annual budget on maintenance, approximately half of the level considered necessary to adequately maintain infrastructure and reduce service delivery failures.
The City of Johannesburg recently received a qualified audit opinion for the 2024/25 financial year, reflecting ongoing concerns over the accuracy and reliability of its financial reporting.
The Auditor-General further expressed concern that the metro has once again tabled an unfunded budget for the new financial year, raising questions about its long term financial sustainability and ability to address growing infrastructure challenges.
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