$3.4m mistake 'a oncer'

A software accounting error that under-calculated Southern District Health Board's deficit by $3.4 million was a ''oncer'', board chairman Joe Butterfield told MPs yesterday.

The error was revealed at Parliament's health select committee financial review of the health board.

The board's official deficit was $11.9 million, but it should have been $15.3 million, Labour MP Annette King confirmed to the Otago Daily Times after the hearing.

She believed it possible that financial pressure and a wish to avoid scrutiny meant the board did not wish to disclose its full deficit.

''They've got a plan to get out of deficit over the next three years, and it's a very, very vicious plan.''

The correct figure was in an audit report that has not been made public.

The board is blaming its Oracle software, from the United States, which allowed a depreciation write-down that did not comply with New Zealand accounting standards.

Ms King told Mr Butterfield, who was appearing by video-link from Timaru, that most New Zealand health boards used Oracle software and the board should be well aware of the issue.

''This is a black and white issue. It's not just a maybe accounting issue.

''It's a black and white issue that it's the wrong way to do it,'' she said.

Mr Butterfield said the error was noticed in auditing of the 2012-13 financial year, but the final deficit figure would not be altered. Instead, the $3.4 million would be paid down in depreciation over the next five years.

''It's a oncer,'' he said.

Ms King said her main concern was the pressure the board was under to break even, and she suggested financial stress was forcing it to defer new equipment purchasing and cut patient services.

Mr Butterfield rejected the suggestion and said equipment was replaced when necessary.

Chief executive Carole Heatly said none of the board's waiting lists had worsened since the board's cost-saving drive started about 18 months ago.

''All of our waiting lists are coming down,'' she said.

Mr Butterfield could not be contacted after the meeting for comment.

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