It's been described as a "monumental disaster" as Victoria's embattled fines body is back in the spotlight again.

Fines Victoria is facing threats of legal action from several Melbourne councils and is responsible for a $328 million hole in the bottom line of the Victorian budget.

The authority replaced Civic Compliance in 2017 as the state's one-stop shop for all fines, but for nearly two years, it's had major IT problems.

That means some fines haven't been processed — but the Government is insisting they still have to be paid.

What's gone wrong?

In simple terms, Fines Victoria is having trouble recovering millions of dollars in revenue from the fines it is meant to collect.

It blames the software it's using — called View — which it previously said would be fully functional by June this year.

The software issues have created a huge backlog, meaning many people aren't receiving notices to pay their fines.

In the meantime, Victoria Police has been using a work-around to manage the problem for the past 18 months.

"We've had to employ quite a lot of additional staff to do that and we've continued to employ them for the past 18 months to do that," Chief Commissioner Graham Ashton says.

Victoria Police has been using a work-around while the technical problem is being fixed. ( ABC News )

And it's not the first time the authority has copped criticism.

The ombudsman wrote a damning report in April about Fines Victoria's performance, with incidents of dead people receiving fines.

Government sources have told the ABC the system is now broken beyond repair — but officially, Fines Victoria is saying the system is still working and fines can still be paid.

The Shadow Attorney General, Edward O'Donohue, says the bungle is "a monumental disaster" from the Andrews Labor Government.

Who could be caught up?

People who have received a parking fine, court fine, red-light camera fine, speeding fine or any other infringement notice under the jurisdiction of Fines Victoria could be affected.

Some people aren't getting the infringement notices in the first instance, while others are not getting reminder notices.

"Some clients have tried to contact Fines Victoria about their [court] infringements and have been asked for a reference number," criminal lawyer Ruth Parker told ABC Radio Melbourne's Mornings program.

"But they don't have a reference number because they never received the fine … so you go around in circles.

Fines Victoria handles payments for traffic, speeding and parking fines. ( ABC News )

"I got a call about two weeks out from when the fine was going to expire [for one of my clients] and she had still not received anything from Fines Victoria."

Ms Parker says anyone who got a fine had the right to request a payment plan but that's a problem if you have to try to contact the court directly to arrange it.

Who's missing out on all that lost revenue?

The slow IT system has had a big impact on local councils which are not getting expected revenue from fines.

Some councils are millions of dollars out of pocket, including the City of Port Phillip which claims it's owed around $21.7 million.

Port Phillip has joined Hobsons Bay City Council to threaten court action against Fines Victoria to recover that revenue.

The technical problem makes the enforcement of outstanding fines and the processing of complaints and appeals of fines difficult.

More than 120,000 court-issued fines have not been sent out and authorities haven't been able to recover the debts because the system is not working to capacity.

These fines could be worth hundreds of millions of dollars.

Fines Victoria has been under pressure to explain the revenue shortfall. ( ABC News )

How much could it cost the taxpayer?

The state budget has taken a big hit.

In the last financial year, the state lost $328 million in revenue from fines.

And there are warnings that the system may take more than 12 months to fix, if at all, raising the prospect of even more losses.

Victorian Opposition Leader Michael O'Brien told ABC Radio Melbourne he has evidence of a shortfall last financial year and, with $60 million spent trying to fix the system, he says there is "$400 million out the window".

Attorney General Jill Hennessy told State Parliament last week there has been significant improvement in Fines Victoria's performance and four operations had cleared more than $97,000 in debt.

Local councils are missing out because Fines Victoria isn't collecting the revenue. ( ABC News: Loretta Florance )

So do I have to pay my fine?

Officially, yes.

Fines Victoria and the Department of Justice say the system is still working to pay fines and take general enquiries.

"Court fines are currently being issued as normal by the courts and are payable directly to the courts on the day or at justice services centres at anytime," according to a department spokeswoman.

The department acknowledged some Victorians had not received reminder notices "due to some complexity of merging data from the courts into the fines system".

James Merlino, the Acting Premier, says the answer is unequivocally yes.

"People have an obligation to pay their fines, fines don't expire and Fines Victoria is working through this issue endeavouring to contact people and ensuring that people pay their fines," he says.

The Government has already commissioned a review into Fines Victoria which Mr Merlino says will be completed "shortly".

The Department of Justice says the onus remains on Victorians to cough up, even if they have not received reminder notices, because the debt will still stand.

"The obligation remains on Victorian debtors to pay their fines," the Department of Justice spokeswoman says.

"The system is working and the debts don't go away.

"People have a responsibility to pay their fines and they should."