Several municipalities in KwaZulu-Natal, including municipal entities, are struggling to keep their heads above water financially.
Auditor-General Terence Nombembe said the financial constraints were related to debt collection, payment of creditors, ability to fund operations and maintenance of infrastructure.
Concerns regarding the ability to fund ongoing operations or being financially sustainable were identified at 11 out of the 61 municipalities in the province.
Nombembe said three municipalities had underspent their budget, adding that this was not an economic saving, but instead an indicator of poor financial management.
This, he said, could result in non-performance on service delivery and the neglect of other functions, such as the maintenance of infrastructure.
The Msunduzi Municipality, said Nombembe, underspent its capital budget by R235m and as a result the municipality did not achieve its objectives of service delivery, infrastructure development as well as community and social services.
The Nquthu Municipality could not supply a satisfactory explanation for the underspending of the budget by R34m and conditional grants by R25m, while the Umtshezi Municipality underspent on three conditional grants totalling R2m.