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DHB Finances Tracking OK

24 May 2005

DHB Finances Tracking OK

The Ministry of Health continues to see evidence that District Health Boards are generally managing their financial performance well.

The combined results for the nine months to the end of March 2005 show that DHBs? actual deficits are better than planned by $53.1M.

The total planned deficit for the nine months to March is $69.3M. The actual deficit is $16.2M. There is likely to be some seasonality causing the favourable variance, which should reduce as the winter season impacts, but the difference is largely explained by underspending due to delays in putting in place new programmes in several DHBs. The delays occur while DHBs plan to ensure that new programmes are well set up; that they have recruited the required staff and the programmes are sustainable.

Some of the reduced deficit is explained by a small number of DHBs prudently making provision for planned major capital expenditure.

The total planned deficits for the full financial year ending June 2005 include a carry-forward of $7.3m of mental health funding from the previous year which was unspent, and in this year shows as a deficit due to accounting practice. A one-off provision for $11.4m for asbestos removal as part of the redevelopment of Auckland City Hospital will also occur in 2004/5.

The Ministry continues to work closely with boards to ensure that deficits as a whole are reduced. Auckland DHB is the focus of particular attention as it re-orients itself to take advantage of its new facitilites and achieve the benefits planned.

Please attribute any comments to Ministry of Health, DHB Funding and Performance, Manager Finance, John Hazeldine.


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