One of South Africa’s biggest cities lost R3 billion to traffic fines

The City of Ekurhuleni recognised a material loss of R2.7 billion due to an impairment on traffic fines in the 2024/25 financial year.

This marks one of several signs of financial mismanagement in the municipality, which were recently identified by the Auditor-General of South Africa (AGSA).

The city also recognised R3 billion in electricity losses and R42 million in irregular expenditure.

This was revealed during a recent presentation the AGSA made to the Standing Committee on Public Accounts on 28 April 2026.

This presentation outlined the audit outcomes for four major metros in South Africa: Mangaung in the Free State, Ekurhuleni and Tshwane in Gauteng, and eThekwini in KwaZulu-Natal.

The Ekurhuleni Metropolitan Municipality covers the eastern part of the Johannesburg metropolitan area, known as the East Rand, bordering the City of Johannesburg and the City of Tshwane.

In the presentation, the AGSA’s Tlamelo Ramantsi explained that the City of Ekurhuleni has seen a gradual deterioration in its audit opinion over the past three years.

“That has been driven mainly by the higher-than-acceptable risk acceptance by the City of Ekurhuleni,” he said.

In the 2024/25 financial year, the city received a ‘Qualified with findings’ audit outcome, a deterioration from its 2023/24 outcome of ‘Unqualified with findings’.

The AGSA’s presentation explained that the qualified audit opinion largely stemmed from the manipulation of the city’s computerised accounts receivable system, specifically highlighting unauthorised access to Ekurhuleni’s master consumer data.

This, Ramantsi said, essentially wiped out some of this data, compromising the credibility and reliability of Ekurhuleni’s accounts receivable balance.

The manipulation of this system exposed a related internal control failure in the city, namely the inadequate design and implementation of IT controls.

These controls should be put in place to prevent and detect unauthorised access to financial reporting systems, resulting in data manipulation.

During its audit of Ekurhuleni, the AGSA also identified various other material irregularities and concerning procurement management practices.

The graph below shows the deteriorating audit outcomes of the City of Ekurhuleni between 2020/21 and 2024/25.

Matters of concern

Ramantsi noted that the AGSA has not made any material findings related to Ekurhuleni’s performance report in the past four years. “That is a demonstration that the controls in the main are intact,” he said. 

However, the AGSA has made material findings related to the city’s compliance with legislation in the past three years.

Ramantsi said these findings were driven mainly by breakdowns in the city’s procurement and contract management systems.

The AGSA found that the city awarded some contracts to bidders based on points given for requirements that differed from those stipulated in the original invitation for bids.

In addition, contract performance was inadequately monitored, with insufficient measures in place to ensure effective contract management.

The AGSA’s presentation further revealed that there was material uncertainty regarding Ekurhuleni’s ability to continue operating as a going concern, with further assessment required.

It said there were adverse indicators regarding the city’s liquidity, financial performance and cash flows.

Three matters emphasised in the AGSA’s audit report for Ekurhuleni included material losses the city made due to an impairment on traffic fines totalling nearly R3 billion. “That is quite significant in that environment,” Ramantsi said.

The city also experienced material electricity losses totalling R3 billion and water losses of R1.27 billion, as well as irregular expenditure of R42 million and unauthorised expenditure of R397 million.

Overall, the AGSA made several recommendations for the City of Ekurhuleni, including improved monitoring and enhanced oversight.

The AGSA referred to this as “activating the accountability ecosystem” to address the city’s current realities.

This plan relies on three “calls to action”: improving oversight and accountability, instilling a culture of ethical behaviour, and improving financial health and service delivery.