SDHB draft budget may not meet deadline
THE Southern District Health Board may not submit its draft budget to the Ministry of Health by the due date.
Budget setting is always a challenge for DHBs as they are obliged to submit their provisional expectations to the ministry before the government releases its own Budget — the document which reveals how much funding is set aside for health boards.
However, a report by SDHB chief executive Chris Fleming to be considered by the board tomorrow revealed just how challenging this year’s process had been.
‘‘The current year’s budget is a deficit of $10.9 million and explicitly excludes the implications of the Holidays Act, or accelerated depreciation related to the Dunedin Hospital project, and any ongoing Covid implications.
‘‘On top of that, the expectation that we have fully implemented Care Capacity and Demand Management safe staffing by June 30 means that there are significant expectations associated with increasing nursing resources further.’’
A preliminary estimate suggested that could be a $3 million$5 million cost to the SDHB, he said.
Last year, all DHBs were stung by costs associated with the Holidays Act after it was confirmed leave and shift allowance payments had been mistakenly
calculated for several years — a multimilliondollar error being repaid over a twoyear period.
Those costs contributed to the SDHB recording a deficit of $85.8 million last year, $41 million of which were oneoff costs.
Covid19 has been a huge unexpected cost to the SDHB, which accrued $26 million in pandemicrelated expenses last year.
‘‘The Ministry of Health has a clear expectation that the budget for 202122 should be a breakeven budget,’’ Mr Fleming said.
‘‘One of the obvious challenges is that we do not have any funding indications and are unlikely to have anything firm before the May 2021 Government Budget, so the [SDHB] draft budget is assuming the same funding increase as the previous year.’’
The first draft of that budget is due to be submitted to the ministry on March 5, a deadline which Mr Fleming said meant it was impossible for the board or any of its committees to review the document before it was sent in.
A finance, audit and risk committee was scheduled for February 25, and that meeting would need to review progress and decide whether to submit the draft, or not, Mr Fleming said.
Meeting this year’s budget was also proving problematic, Mr Fleming telling the board in December the SDHB recorded a deficit of $3.5 million, compared with a planned $2.2 million deficit.
‘‘The year to date financial performance is a $13 million deficit against a planned deficit of $5.7 million.’’
Excluding Covid19 costs, depreciation and the Holidays Act, the SDHB’s core operating results were a deficit of $7.7 million, against a planned deficit of $5.7 million, Mr Fleming said.