Otago District Health Board services have ended the year with a deficit of at least $3.5 million, mainly due to increased spending on wages.
Draft figures presented by business analyst Grant Paris to the board hospital advisory committee yesterday show personnel costs for the board's service providers were $4.877 million over budget.
Final adjustments to the accounts for the year could push the deficit higher.
Staff costs are the largest item in the services' budget, standing at $170.25 million for the year.
Mr Paris told the meeting that new wage settlements which were higher than budgeted cost the board about $4.3 million more than expected.
While the board has been short-staffed and this might have been expected to have a positive financial effect, this had been negated by the board paying more in overtime and to locums.
Increased payments for annual leave, due to higher than expected wage settlement increases, had also pushed costs up.
The lump sum payout to senior medical officers as part of their settlement had also caused a significant revaluation in their annual leave, Mr Paris said.
The services' original budget was for a $1.4 million surplus, but expenditure was higher than budgeted in all areas.
Revenue was $5.1 million more than expected, but this was not enough to offset the increased costs.
Non-clinical costs which have overrun include legal fees which cost the board $325,000 more than the budget due to the investigation of its information systems in connection with a forthcoming court case.
In mental health services, where money cannot be transferred to other parts of the board's operations, spending on wages was below expectations due to the shortage of staff, but other costs were up by $425,000 and the services recorded a deficit of $198,000.
The board has been using Ashburn Clinic for acute patients when its own wards have been unable to cope with numbers and this had cost $311,000 which had not been included in the budget.
