Five Victorian TAFEs face a "significant decline" in finances, as cuts begin to strip the important training provider.

The latest report shows the state’s 14 TAFE colleges are $16.2 million in debt.

Five campuses were given ‘high risk’ assessments, indicating their financial situation makes even the short-term future uncertain.

The rough situation is due in part to a Victorian Government cut of about $113 million from the TAFE sector in 2012, which resulted in closures and sackings across the sector.

The auditor-general’s report showed the Northern Melbourne Institute of TAFE was one of the worst-faring. The NMIT has a net operating deficit of $31.7 million, and without remedial action the auditors say it will have “substantial cash flow deficits” for several years.

NMIT was one of five TAFEs deemed to be at high financial risk .

“This means that there are immediate or short-term financial challenges at these TAFEs that need to be addressed,” the report said.

“Consequently there has been a significant decline in the financial sustainability of the sector.”

A number of campuses reported improved financial results, which were attributed to early adoption of staff and service cuts.