The financial management capacity of municipalities remained a challenge. This had led to various problems, including late, incorrect and manual invoicing and payments not being correctly allocated. Invoices also did not distinguish between rates and taxes and municipal services. In addition, the devolution took place based on an unaudited and unverified immovable asset base. The department was being invoiced for rates and taxes on private property, property owned by National Government and property owned by the municipalities themselves. These errors were not being corrected by municipalities and continued to reflect as debt-owed by the department. This had led to significant discrepancies between amounts reported as outstanding by municipalities and by the department.