Council staff would not be able to tell which sensors were faulty until they were notified by the public.
"As with any electronic system dependent on wireless communications, we experience unanticipated faults [and] technical issues," the statement said.
One city councillor told Fairfax the "honest majority" of sensors could be relied on.
"There's always going to be a little teething problem here and there when you have new technology," said the council's transport portfolio leader Chris Calvi-Freeman.
"This is new technology for us and I think it's working really well."
Meanwhile a council spokeswoman told Fairfax the number of errors was "significantly lower" than when the sensors were first put in, and "well below" the predicted error rate.
"As with all technology, the system is constantly being improved and monitored."