$10.3m injection to Hawke’s Bay DHB
Support is not to address deficit
A$10.3 million equity support injection has been provided to the Hawke’s Bay District Health Board to maintain its cash flow.
The money, which was due to be paid on June 28 by the Ministry of Health, was granted by Health Minister David Clark.
In a letter to board chairman Kevin Atkinson on June 25, Clark says: “In providing this equity injection I remind the DHB of my expectation that it will act in a financially responsible manner and manage within the allocated funding.
“It is not intended to address the DHB’s deficit position and will have no effect in this regard.
“I am advised that the DHB sector is experiencing considerable and unsustainable liquidity pressure, with a significant number of DHBs now drawing on overdraft facilities culminating in a forecast cash shortfall in early July 2019.”
In Budget 2019, the Government increased funding in the appropriation: Equity Support for DHB deficits to address the forecast cash shortfall in June 2019.
Clark said equity was being provided to those DHBs recently drawing on the overdraft facilities, and available funds would be allocated based on recently reported month-end overdraft balances.
A HBDHB spokeswoman said this was not additional funding for the DHB but was to support liquidity and reduce the board’s existing cash overdraft.
Clark said he had asked the ministry to implement some new measures for DHBs to provide further information under section 133 of the Crown Entities Act, which are designed to provide him with “some assurance that boards are actively managing cost growth”.
He expects boards to provide to him, on a quarterly basis, their “representation that cost increases have only been approved where unavoidable”.
“The representation is to be accompanied by supporting reports which include the detail of, and explanation for, any increases in expenditure from the corresponding quarter of the previous year, including Full Time Equivalents (FTE), personnel and outsourced personnel expenditure, total provider arm expenditure, expenditure on community provider contracts, actual capital expenditure.”