This is revealed in a statement from the Ministry of Health released recently, outlining the boards' response to the review.
The review, which was made public in July, following an Otago Daily Times Official Information Act request, was critical of the procedures the boards used to budget for their own services which it said were over-priced by almost $5.5 million last year, severely limiting funding for outside community services.
The report said there was no evidence of detailed costings to justify the prices.
In one of the 12 recommendations the report asked that the boards re-implement detailed costing of its services using district health board costing standards as a guide to ensure that overhead allocations were defensible.
It also asked that consistent methods were used.
The boards did not accept the detailed costing recommendation, saying that they considered the costs of investing in it outweighed the benefits, given the adequacy of information provided already.
They said they already used consistent methods for the various aspects of budgeting, planning and accounting.
The ministry acknowledged that the decision regarding the costing system used lay with the boards' management and noted that following the review the boards had taken action to align their procedures with the DHB costing standards.
The review was also critical of the boards using inter-district flow (IDF) prices locally and recommended pricing them at cost.
IDF prices are set nationally and are used by boards to charge for caring for patients outside their district.
The boards partially accepted this criticism, but indicated there was some moderation of the system to reflect local costs.
The perception of preferential treatment for the board's own services was not likely to be specific to Otago or Southland, the board said.
Wage rates in the board sector were considerably higher than those for community services funded by the board, but additional government funding was made available for board staff but not those in the community sector.
The most recent nursing and senior medical officers' collective agreements were examples of this, the board said.
The recommendation that the Otago board reconfirm the direction set by the 2004 Mental Health Review was accepted, but the board pointed out the review was now five years old and planning would need to take into account recent developments in the way care was provided.
The board did not accept that it should seek extra funding for new services because it continues to be concerned about the difficulties which could arise regarding future operational funding for such services.
At the moment the board is over-funded, according to population-based funding.
It stated it would prefer to re-prioritise mental health funding which is not allowed to be used for other purposes.
The Ministry of Health acknowledged this position, but will require both boards to accept a small amount of new funding this financial year as part of the development of the Christchurch-centred southern region eating disorder service.
The South Island is getting 4.5 senior doctors' time allocated to this service, but the distribution of this across the various boards has yet to be determined.
The boards accepted recommendations about consultation and improving communication with mental health service providers.
The Otago board caused consternation in the community mental health services after it announced in 2007 it would be spending accumulated surpluses on a series of new services, but after starting the process it withdrew from this, using the money instead to support anticipated increases in its own services.
• At the Otago District Health Board meeting this month, board regional general manager planning and funding David Chrisp said the recent annual visit from the Mental Health Commission had drawn much interest.
While there were clearly still some issues, including those around integration between hospital and community care, the meeting had been "quite positive", he said.
Only a short time had been allowed for a debrief and the commission would be providing further detail in a letter to the board, he said. (see separate story on commission's letter)
