City manager insists Joburg is financially sound during grilling in Parliament

Johannesburg’s city manager, Floyd Brink, says that the city’s budget tabled for 2026/2027 is funded. This was in direct response to Finance Minister Enoch Godongwana’s threats earlier this week to withhold funds from the City of Johannesburg if issues relating to its unfunded adjustment budget were not settled by the end of this month.

Brink, along with the City’s executive mayor, Dada Morero, group chief financial officer, Tebogo Moraka​​, and acting head of group forensics and investigation services​, Sinaye Nxumalo, addressed Parliament’s Standing Committee on Public Accounts (Scopa) on Tuesday, 9 June.

The group were grilled by parliamentary representatives following the Auditor-General’s report on 2 June that gave the City an unqualified audit with findings on its consolidated financial statements and found that poor management, weak accountability mechanisms and deteriorating infrastructure had led to high levels of fruitless and wasteful expenditure.

In addition, the Auditor-General flagged that the unfunded 2024/2025 budget had led to an unauthorised expenditure of R2.38-billion in the financial year, as expenditure had been planned to be funded based on unrealistic revenue targets.

The R97.1-billion budget the city adopted in late May drew the ire of ActionSA and the DA, who voted against it, claiming that the City could not realistically generate enough revenue to fund it. The DA subsequently threatened legal action against Godongwana if he did not intervene.

In response, Godongwana instructed the municipality to “address the credibility challenges that were identified in revenue and expenditure which resulted in the 2025/26 adjustments budget being unfunded” and ensure that a funded budget is adopted for the 2026/27 year.

He also instructed the City to review a R10.3-billion wage agreement it had made with the union Samwu, which he called “unaffordable”. The minister stated he would withhold the metro’s July funding tranche if it did not comply.

While addressing Scopa, Brink stated that the revenue collection rates so far in the 2026/2027 financial year were showing signs of improvement.

“We had several discussions with the administrative team through our National Treasury benchmark processes. The indication that we managed to get is that our budget is funded,” said Brink.

“We do have approved funding plans. We had specific revenue assumptions that we had to discuss with the National Treasury. And we can indicate that we’ve started to see some significant changes in our revenue collection.

“In the month of January, we collected around 71%. At the end of February, we were at 81%, but at the end of March, we were at 96.5%, and in April, also a similar amount, of 90%. The trajectory looks positive; it’s now to ensure a high level of consistency and for us to be able to ensure that our budget remains funded in a disciplined manner.”

Brink also highlighted the JSE’s decision to lift the suspension on the City’s trading instruments — spurred by better regulatory compliance — as clear evidence of improved governance.

Samwu deal not abandoned

Johannesburg’s group head of legal and contracts, Mbulelo Ruda, defended the controversial Samwu wage deal, saying that it was mandated by a Commission for Conciliation, Mediation and Arbitration ruling.

“One of the founding principles of that agreement has always been affordability, financial sustainability and the city’s budget processes. Though the agreement is signed, we are still subject to those principles that, whatever payments we make, are subject to those principles that we do not deplete or mess up the city’s financial sustainability,” said Ruda.

Morero also defended the deal, saying it had been the result of a “10-year battle between the City and labour”.

City ‘overspent’ on budget

Nxumalo indicated that efforts had been made to address unauthorised, irregular, fruitless and wasteful expenditure, including regularising R45 billion, 50% of which was spent on bulk purchases for water and electricity. In other words, this money has been accounted for through formal investigative processes. Of this amount, the bulk (R24.856-billion) was unauthorised expenditure. The Auditor-General had also identified a further R2-billion in unauthorised expenditure.

“I must indicate that when it comes to unauthorised expenditure, in essence, it is not that it is expenditure that should not have been incurred. But it really means that we have overspent on the allocated budget, which is an issue that we are addressing,” Nxumalo explained.

Further, the City owed creditors R25.2-billion but had only R3.9-billion in cash and equivalent reserves and was prioritising water and electricity creditors as a result. Johannesburg also reported more than R8.5-billion in water and electricity losses in the 2024/2025 financial year, which accounted for more than 10% of the budget. Johannesburg Water currently has an infrastructure backlog of R32-billion.

“If we can stop the bleeding, these are monies that we can reinvest in critical entities,” said Moraka, adding that the City would need to make further investments in infrastructure and that the €200-million (about R3.8-billion) loan the City secured from the German investment bank KfW would be used towards infrastructure development, particularly prioritising water and electricity. DM