Otago Daily Times

SDHB draft budget may not meet deadline

- MIKE HOULAHAN Health reporter mike.houlahan@odt.co.nz

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.

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