Editorial: One more strike for Ministry of Health boss after $38m Budget blunder

Chai Chuah, Director General of the National Health Board, left, and Jonathan Coleman, Minister of Health, during a ...
JOHN KIRK-ANDERSON/STUFF

Chai Chuah, Director General of the National Health Board, left, and Jonathan Coleman, Minister of Health, during a visit to Burwood Hospital in 2015.

EDITORIAL: Health Minister Jonathan Coleman says he does not want the director-general of health, Chai Chuah, to resign following another financial management blunder in his department.

Chuah has to know, however, that if any sort of three-strikes policy operates in the higher levels of the public service – and it should – he will now be on his final warning.

Fourteen of the country's 20 district health boards (DHBs) have been told to manage with less money from the 2017 Budget allocation, because Chauh's ministry got the figures wrong.

The overall amount given to the DHBs – $439 million – does not change. However, $38m was wrongly allocated, because draft numbers and not final figures were provided by the Health Ministry when the Budget was being drawn up. Now, the individual DHBs' allocations have to be adjusted.

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The mix-up was revealed last week, and fixing it means some health boards in the north are big winners. Waitemata gets $12.6m it wasn't expecting, Auckland is $10.6m up, and Northland gains $6.3m. Waikato gains $4.4m.

But DHBs just about everywhere else are scrambling to make new plans after learning they won't get what the Budget promised them.

The Capital and Coast board covering Wellington will get $3.7m less than expected, the neighbouring Hutt Valley is down a similar amount, and Mid Central centred on Palmerston North loses $5.5m. Relatively tiny Wairarapa has to make do without $1.5 million of the cash it was expecting.

In the south, Canterbury DHB, which has a history of bad blood with the ministry over financial management differences, is $2.7m out of pocket. South Canterbury's allocation drops $1.1m. Somehow, the Southern region which includes Dunedin and Invercargill has to work out how to do without $5.7m.

Coleman said Chuah had not offered to resign over the blunder. "I don't want his resignation. I want the work to be done properly," the minister said.

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But this mistake is the second significant error to be exposed within a year. Earlier, the ministry was left $18m short after miscalculating how to fit out its new head office. Treasury branded this a "serious failure of financial management".

It is unfathomable how Chuah, a senior accountant with a long management career in the public service and health, has not been able to keep on top of the numbers.

The latest accounting bungle will be felt particularly in Wellington, where the DHB is trying to address 20 years of deficits in its balance sheets. It will also bite deeply in Canterbury, which has been coping with a major hospital rebuild while juggling and managing extra demand following the earthquakes.

Canterbury DHB managers can be forgiven for feeling exasperated towards ministry officials, who have had financial consultants trawling through the DHB's books – some would say vindictively – while proving themselves unable to keep the ministry's own financial reckonings in order.

Chuah says the error exists "on paper only", as the financial year does not start until July 1. Tell that to the managers and planners who now have to go back through their spreadsheets for the coming year and re-attempt the difficult job of rationing health care to fit their budgets.

Chuah also underestimates the reputational damage to his ministry and to himself. One more strike and he's out.

 - The Press

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