SDHB rates poorly for investor confidence

The Southern District Health Board has been rated the lowest of any government agency yet assessed in the Treasury's investor confidence ratings.

The SDHB claimed the unwanted achievement of being the first agency assessed as a ''D'' in the ICRs - a Treasury programme which assesses government departments and agencies for their performance in procurement, asset management and investment management.

While it avoided an ''E'' - the lowest possible result - the Treasury said there were ''significant gaps'' in the SDHB's performance in a range of areas.

However, the SDHB said the report was based on an audit carried out 12 months beforehand and reflected historic issues rather than the current improved situation.

The Treasury said the ''D'' rating was a concern, as the SDHB was about to embark on major new investment in building the new Dunedin Hospital.

''There is currently a low level of maturity in portfolio, programme and project management with no consistent approach to portfolio or project management,'' the Treasury report said.

''This is reflected in the results for benefits and project delivery performance.

''Additional work is also required to improve its asset management maturity and long-term investment planning.''

Support would be needed from the Ministry of Health and other government agencies to improve the SDHB's performance, the report said.

''Significant effort from the SDHB will be needed to address these gaps,'' it said.

''The SDHB's executive team is committed to improving the DHB's investment maturity and performance.''

It was not all doom and gloom for the SDHB, as the Treasury said it demonstrated ''relative strength'' in procurement, was open in its engagement with central agencies, and monitored and contributed to regional health initiatives.

SDHB chief executive Chris Fleming said changes were put in place this year and the organisation's performance had improved.

''The Ministry of Health have indicated they see the rating as reflective of historic financial issues, and are confident that with the current structures in place, our outcomes will improve over time as more changes are implemented,'' he said.

''As well as continuing to strengthen our overall project governance and business processes, our key priority area is the performance of our assets, in particular our physical buildings, which continue to challenge us.''

The SDHB needed to do further work with the ministry to agree the level of performance expected from its buildings, Mr Fleming said.

The SDHB has battled for several years to try to keep both main buildings in Dunedin Hospital operational due to problems with asbestos and leaking - one reason why the government last week announced an acceleration of the Dunedin Hospital rebuild.

The Treasury is not the only government agency to have raised issues about financial management in the health sector as a whole.

The Office of the Auditor-general announced in May that it would examine health sector project management and investment planning this year.

mike.houlahan@odt.co.nz