Budget blunder costs SDHB $5.7m

The already cash-strapped Southern District Health Board will have to make do without millions of dollars of much-needed funding, after a $38 million mistake by the Ministry of Health.

The ministry has confirmed it misallocated $38 million for the coming year's budget for all district health boards, after draft figures were submitted instead of the final ones.

The mistake meant 14 DHBs were inadvertently allocated more money than they should have been, while six received less than they should have, director-general of health Chai Chuah said.

The SDHB was second on the list of those overpaid, having been accidentally allocated an extra $5.66 million - money it would not now receive.

Dunedin-based Labour health spokesman David Clark told the Otago Daily Times the ''incredibly embarrassing'' mistake would be felt on the front line.

The funding-constrained board was already struggling to make ends meet, which was reflected in the state of Dunedin's dilapidated hospital, he said.

The budget allocation was the basis for planning the coming year's spending, and the accidental bonus was ''not an insignificant sum of money'', he said.

Losing it again would only make life more difficult for the board, he warned.

''In an environment where the hospital in Dunedin is past its use-by date, and the hospital is forced to use inefficient ways of working, they're already struggling. To be told that $5.7 million is going to be taken off them is a real blow.

''It'll be a blow to the delivery of frontline services, there's no two ways about that,'' Dr Clark said.

The error was also criticised by Dunedin Hospital clinical leader John Chambers, a former Southern District Health Board member, who was sacked, along with other board members, in 2015.

''As a democratically elected board member who was 'sacked' by the health minister because we were perceived as unable to manage the finances, I find this outrageous.

''In particular, at short notice, our executive will now have to make cuts in its plans for next year, which will inevitably reduce the access to and provision of medical care for our population,'' he said on Facebook.

Health Minister Jonathan Coleman, in an emailed response, said the budget for the next financial year would boost access to services, appointments and surgery, and Dr Clark ''needs to stop telling fibs''.

Mr Chuah also said in a statement he had apologised to Dr Coleman, as well as others within the health sector, for the mistake.

The error crept in to the ministry's budget for the coming year, which begins on July 1, when draft figures were submitted instead of final ones, Mr Chuah said.

The mistake was being corrected, with the $38 million reallocated among the boards as intended, and the total distributed to the health sector would remain unchanged.

''The ministry recognises DHBs will need extra time to adjust their planning based on the original planned figures and has extended the deadline for DHB financial plans to be lodged with the ministry,'' he said.

A report by Deloitte explaining how the error had occurred was expected later this month, but Mr Chuah described the mistake as ''an issue on paper only''.

Dr Clark disagreed, saying the reduced spend would be felt on the ground in the South.

He added that $5.7million ''might be made up of paper, but it's significant paper for a DHB that is already struggling''.

''It's incredibly embarrassing. It's the kind of basic error that just should not happen.''

chris.morris@odt.co.nz

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