6.1 A total of four municipalities were performing at level 3 in terms of Finance. The majority of municipalities were performing at level 2 to 1, which was indeed a concern. Most municipalities were able to spend their allocated operating budgets. What was of concern was that in the B2-B4 municipalities, the salary bill comprises more than 35% of that operating budget and in B4 municipalities (mostly rural) reached 47%. The challenge arises with spending the capital budget. The Metro and B1 (cities) municipalities spent 100%, whilst C2 (districts) spent on average 80%. The B2 to B4 municipalities only managed to spend up to 70% of their capital budgets. 6.2 Most municipalities manage to collect cash from the bills they send out. The challenge arises in how quickly they manage to collect that cash (debtor days). The average debtor days (age of debt) in B4 municipalities (mostly rural) are 224. This means they take up to 224 days to collect a billed amount from the consumer. In B3 municipalities it is 162 (not much better), in B2 municipalities it is 107(not better), in the B1 municipalities it is 92 (not better) in the Metro it is 80 (getting better) and in districts it is 164 (not better). This means that municipalities at some stage will face cash- flow challenges as more money was being paid out than what was collected in billable revenue. And this was evident more rapidly in the B1 and B2 municipalities due to more overheads.