Joburg in crisis: AG slams R2.76bn unauthorised spending as civil groups blast city’s tariff hikes and service failures

Key topics:Auditor-General flags R2.76bn in unauthorised spendingCivil society condemns exclusionary public consultation processResidents face steep tariff hikes amid service failures.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Kerry Lanaghan.A storm is brewing in Johannesburg as the city’s governance and financial management come under fire from the Auditor-General (AG) and civil society organisations. The latest audit outcomes paint a bleak picture of fiscal discipline. At the same time, groups like JoburgCAN and OUTA have condemned the city’s dismissive approach to public concerns, especially in light of steep tariff hikes and ongoing service failures.According to Daily Maverick, the AG’s 2023/24 audit report reveals that Johannesburg, alongside eThekwini and Ekurhuleni, received an “unqualified audit with findings” - indicating that while financial statements may be technically accurate, significant weaknesses remain in financial management and compliance. Most alarmingly, Johannesburg recorded R2.76 billion in unauthorised expenditure, the highest among South Africa’s metros.Auditor-General Tsakani Maluleke noted that only 16% of South African municipalities received clean audits, with just 19% of municipal spending falling under these capable entities. Metros, which manage 57% of the local government expenditure budget, are especially under scrutiny. “The continued weakening of these metros... has led to a situation where their financial health has deteriorated,” Maluleke told Parliament. She cited Johannesburg’s failure to adequately budget for asset maintenance as an example of declining municipal capability.The findings and frustrations of JoburgCAN, a civil society initiative under OUTA, compound the AG’s report. Following the City of Johannesburg’s publication of the 2025/26 budget and consultation outcomes, JoburgCAN accused the city of procedural compliance without substantive engagement. Despite rising tariffs - 13.9% for water and sanitation, 12.41% for electricity, and 4.6% in property rates - residents are seeing little to no improvement in basic services.“We are seeing sewage leaks, broken infrastructure, and service failures, yet the City expects residents to pay more,” said Julia Fish, Regional Manager for JoburgCAN. “The budget must be more than just numbers - it must serve the people and restore trust.”One primary concern is the lack of accessible and inclusive public participation. The City admits that fewer than 5% of Integrated Development Plan (IDP) engagements focused on tariffs and budgets. JoburgCAN argues that consultation sessions were poorly timed and inaccessible to working residents, effectively excluding many from the process.Residents and watchdogs are also critical of how tariffs are calculated. JoburgCAN challenges the city’s policy of basing sanitation charges on property size rather than actual usage. “You pay for what you consume; that makes sense,” said Fish. “But how does property size equate to sanitation usage?”Despite the gloomy outlook, there have been some positive developments. In response to civil society pressure, the City has acknowledged flaws in the current indigent register and plans to review how Free Basic Services are allocated. It also withdrew a proposed increase in the prepaid electricity service charge, a small but welcome concession.Still, JoburgCAN and OUTA are calling for more urgent and systemic reforms. These include:Transparent cost breakdowns in community-friendly formats.Ringfencing of revenue for electricity, water, and waste to prevent misallocation.Realigning executive performance metrics with service delivery outcomes.Improved, inclusive public participation mechanisms..Additionally, according to The South African, Johannesburg Water carried out a 96-hour emergency water shutdown from 18:00 on Friday, 9 May to 18:00 on Tuesday, 13 May to repair leaks on a major pipeline. Numerous suburbs across the city, including Sandton, Illovo, Rivonia, and Morningside, were affected. It remained unclear whether water tankers were provided. This followed earlier planned maintenance in Orange Farm and Amarosa, where residents experienced hours-long water outages due to infrastructure upgrades.Johannesburg faces growing infrastructure failures, bloated governance structures, and spiralling unauthorised expenditure, and the warnings are clear. Unless political will and administrative competence are urgently restored, the city risks deeper financial and service collapse..Read the full press statement from OUTA below: .JoburgCAN responds to City of Johannesburg’s 2025/26 Budget Outcome Report.The City’s dismissive interpretation of meaningful engagement undermines public confidence in the governance process.The Joburg Community Action Network (JoburgCAN) acknowledges the release of the City of Johannesburg’s report on public consultation outcomes and the finalisation of the 2025/26 municipal budget. While the City claims to have followed the required legislative process, the substance of its response reveals a concerning disregard for the growing dissatisfaction among residents and the economic pressure facing households and businesses alike.“Again, we raised the principle of cost reflective pricing guided by legislation, like being charged for sanitation based on your property size. Sadly, the City’s response was that it was ‘addressed last year in their comments and that this is CoJ policy,’” said Julia Fish, Regional Manager for JoburgCAN. “We believe that the City should be able to justify the costs of services. You pay for the amount of water you consume, which makes sense, however, how does the City justify paying for sanitation services based on your property size? They can’t.”“As JoburgCAN, we reiterate our call that a municipal budget must be more than just an accounting exercise, it must serve as a tool to restore trust, deliver tangible value, stop wastage and strengthen Johannesburg’s resilience. The City’s dismissive interpretation of meaningful engagement undermines public confidence in the governance process,” Fish added.Despite JoburgCAN and other civil organisations including JPOMA, Asivikelane and RatesWatch making clear, constructive submissions during the public participation process, the City’s response lacked substantive engagement. Instead, it leaned on procedural compliance rather than a genuine reflection on residents’ concerns.Key concerns raised by JoburgCANThe City concedes that fewer than 5% of IDP consultation engagements focused on tariffs and budget concerns. This is not a reflection of low interest, but rather of poorly timed and inaccessible sessions that exclude working residents. Participation does not equal consent when the process is exclusionary. The sessions focus on the basic increases and project report backs but never drill down on other increases like a resellers’ tariff this year that will seriously affect sectional title and social housing units or on the prepaid service charge last year. Residents can’t read through hundreds of pages of documents and rely on the meetings for disclosure.With a 13.9% increase in water and sanitation, 12.41% in electricity, and 4.6% in property rates, Johannesburg residents are being asked to pay more without a guarantee of improved services. These increases come at a time of economic hardship, high unemployment, and stagnant service delivery.The City failed to show how tariff increases will translate into improved service delivery. There is a glaring disconnect between what residents pay and what they receive – leaking sewage, broken infrastructure, and deteriorating roads continue to plague the City.The City has acknowledged future efforts to improve cost breakdowns, but the current budget offers little insight into how each rand is allocated or how spending aligns with performance targets.While the City notes JoburgCAN’s submission, it offers no clear response to our specific recommendations to improve accountability, ringfence revenue for core service delivery, and enhance transparency through community-accessible budgeting tools.There are unjustified increases in councillor headcount and board appointments. The number of councillors is being expanded under the demarcation board process currently underway. This is funded before the consultations have even taken place..Welcome developmentsThe City has recognised that the current indigent register leaves citizens behind. The City will be reviewing how Free Basic Services (FBS) are allocated such as by area, property value or by metering informal areas to give access to FBS. This is a welcome result after JoburgCAN exposed how this grant was being mismanaged. (Link https://joburgcan.org.za/fbs/)There will be no increase to the prepaid electricity service charge of R230 including VAT. It was initially proposed to increase by R50 but that was withdrawn.JoburgCAN remains committed to championing the rights of residents and business and holding the City accountable.Apart from the Presidential Working Group interventions, we believe City of Johannesburg should focus on the following:Transparent cost breakdowns per service in community-friendly formats.Ringfencing of electricity, water and waste removal revenue to sufficiently fund these departments to stop wastage and supply sustainable services.Realign and adjust executive scorecards to ensure improved performance with publicly accessible service delivery performance dashboards linked to the SDBIP and budget allocations.More inclusive and responsive public participation platforms that accommodate working-class and business stakeholders..The City’s budget must reflect the lived reality of its residents. Johannesburg cannot afford another year of misaligned priorities, underinvestment in infrastructure, and disconnection between leaders and the people they serve.

Joburg in crisis: AG slams R2.76bn unauthorised spending as civil groups blast city’s tariff hikes and service failures

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