Director-General of Health Chai Chuah 'fully owns' $38m DHB funding botch-up

Ministry of Health director general Chai Chuah, left, has apologised to Minister of Health Jonathan Coleman over  a $38m ...

Ministry of Health director general Chai Chuah, left, has apologised to Minister of Health Jonathan Coleman over a $38m funding error in May's Budget.

Director-General of Health Chai Chuah has owned up to a $38 million funding blunder that gave some district health boards too much money while leaving others short-changed.

In a statement on Wednesday, Chuah said he fully owned the error that was made and that it was made on his watch.

Chuah was forced to apologise to a furious Health Minister Jonathan Coleman for the mistake in May. He has vowed to learn from it as well as fix it.

It left cash-strapped district health boards (DHBs) scrambling to account for incorrect funding allocations. Auckland's Waitemata DHB was short-changed by more than $12m in the Budget.

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Of the country's 20 DHBs, 14 were over-funded and would have to relinquish some of their funding allocations to balance out six DHBs who were not given enough money, according to a complex formula.

The ministry has accepted in full the recommendations from an independent report into the botch-up.

The report found the impact of one change - not providing the usual early funding signal to DHBs four months prior to the budget - was not realised nor effectively compensated for.

"We have brought in an independent agency to look carefully at what happened, identify the lessons to be learned and to give us recommendations to help minimise this happening again," Chuah said.

"We now have those recommendations and our focus now is on putting those recommendations in place. To that end, we have already started with some improvements."

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Chuah said the ministry's finance team had been brought together and had looked at tightening up the checking process as well as identifying areas where complex budgeting issues involving a number of teams were dealt with while strengthening the review processes in those areas.

"The planning for Budget estimates 2018 is already underway and we have a governance group now in place and we're tasking them with a greater degree of scrutiny, oversight and implementing the report's recommendations."

Chuah said an important recommendation in the report was that the ministry increase its engagement and involvement of DHBs in the funding allocation process.

The ministry was committed to doing that, he said.

"I know I speak for all my staff in saying they are fully committed to restoring confidence in a critical part of our core business."

 - Stuff


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