Southern DHB "disappointed" by $5 million Ministry of Health funding error

The only DHB to lose more money than Southern DHB through the funding error was Counties Manukau, which had its final ...
Robyn Edie/FAIRFAX NZ

The only DHB to lose more money than Southern DHB through the funding error was Counties Manukau, which had its final allocation reduced by $6.6 million.

The Southern District Health board is scrambling to adjust to a $5 million budget blunder, which will force it to make major changes to its annual plan for the new financial year. 

District health boards throughout the country have been affected by the funding allocation error made by the Ministry of Health, which gave incorrect estimates of the amount of money each DHB was set to receive in 2017/18.

The Southern DHB has been one of the hardest hit by the error.

Initially set to receive a $29.7 million increase for 2017/18, after correcting for the allocation error that figure was reduced to $24 million (a decrease of $5.7 million).

Southern DHB chief executive Chris Fleming said he was disappointed with the way the situation had been handled. 

"We were contacted soon after receiving the funding [after May's budget], and were assured that although there was a mistake, we would still receive the funding.

"At the time we were advised the funding was more than we were expecting."

Fleming said because in the initial budget the DHB had been over-funded, the plan was to slightly reduce its funding growth over the next three years to compensate. 

Fleming said the DHB was only made aware of the changes to the plan on Wednesday, with the amended funding details officially issued on Friday. 

"It's disappointing because we've acted in good faith, and now we've had that ripped away from us.

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"That's the crux of the issue. We're all human, but if the error was identified and the ministry said we're terribly sorry and we're going to have to withdraw the funding, we'd have to take it on the chin.

However, Fleming said it was important to remember that despite the error, the DHB was still set to receive a significant increase in funding. 

"It reverts us to the conversation we would have had if they'd not made the error in the first place.

"It just means some of the investments to improve the DHB we'd been contemplating, we're not going to be able to do.

"We're not complaining about the funding, rather the concern is with the process."

The problem now would be readjusting the annual plan to take into account the reduced funding, Fleming said. 

"We've got six weeks to do what we would normally do in three months. 

"Normally when we set up our annual plan, we get our funding approved pre-Christmas, and have to submit the plan in mid-February."

Fleming said now the deadline for the re-submission of the plan would be in mid-July, but even then would not likely be signed off until late September. 

Despite the setback, Fleming said it was essential the DHB hit its financial goals in the next five years. 

"The Southern DHB is on a really tight pathway, and we want to be financially sustainable by 2020.

"It was never going to be a walk in the park, but we are still committed to that plan.

"When you're always trying to reduce your deficit it's always more difficult – It's amazing what being sustainable does for boosting innovation." 

 

 

 

 - Stuff

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