Midcentral overpaid by $5.5m
"This can never happen again." Jonathan Coleman, Health Minister
A Budget blunder is forcing Midcentral District Health Board to hand back $5.5 million to the Government.
Midcentral was one of 14 DHBS to be given too much money in May’s Budget, due to an error by the Ministry of Health.
Midcentral chief executive Kathryn Cook said she was disappointed to learn of the shortfall.
In May, the total funding allocated to Midcentral DHB for the 2017/18 financial year was $497.9m. However, Cook said the DHB had since been told the final funding for 2017/18 will be $492.4 million – $5.5m less than originally proposed.
‘‘Whilst we are disappointed by this advice, particularly at this late stage, we are working hard to revise our budget and annual plan.
‘‘We expect to discuss these with our board in early July,’’ she said.
The new financial year begins on July 1.
DHBS were awarded $439m in the Budget. While that total figure would not change, up to $38m was doled out incorrectly.
In a statement, Ministry of Health director-general Chai Chuah confirmed an internal ministry error ‘‘meant that draft figures were formally submitted for Budget 2017 funding allocations for DHBS, rather than final figures’’.
‘‘The difference between the draft and final figures amounts to $38 million, which is being correctly redistributed amongst DHBS.’’
Midcentral was one of the 14 DHBS over-funded. Those health boards were now expected to relinquish some of their funding to balance out six DHBS not given enough money, according to a complex formula.
Hawke’s Bay DHB was also likely to lose funding. Chief executive Kevin Snee said he was given a verbal indication on Thursday, by ministry officials, that Hawke’s Bay could lose about $2m.
Waikato DHB spokeswoman Lydia Aydon said the health board was yet to be told whether it would lose or gain funding. The board was expected to know by Tuesday, she said.
In an interview with Stuff, Health Minister Jonathan Coleman appeared furious about the mix up.
‘‘It’s unacceptable that they did not get the allocations right. It doesn’t change the total amount that DHBS receive, but it changes how that $439m is divided between them.’’
Coleman said a formula was used to work out the allocations. That formula was correct and had been independently reviewed.
But, in this case, the formula ‘‘hasn’t been properly applied’’, he said. ‘‘This can never happen again.’’
Consultancy firm Deloitte would be conducting an independent review of the ministry’s procedures.