Mfikoe was apparently accused of using of City Parks' money to buy herself birthday and Valentine's Day presents, to host a birthday party, and to have a cosmetic makeover.
The accusations would be treated as "hearsay" and innuendo until the formal investigation had been completed, council spokesman Gabu Tugwana said in a statement.
Media reports on Wednesday about the allegations were based on untested allegations made by unidentified employees even though official channels existed for staff to share such information anonymously, Tugwana said.
"It is extremely regrettable that untested allegations and office gossip have been reported as facts in the media while the Office of the Speaker has already indicated that it has launched an investigation."
Tugwana said Mfikoe had indicated her readiness to co-operate with the investigation. She has been responsible for the city's public safety portfolio since May 2011.
On Wednesday, the Democratic Alliance in Gauteng said it welcomed the investigation.
Just R20 for the first month. Support independent journalism by subscribing to our digital news package. 