Report on blowout due today

A "high-level summary" of PricewaterhouseCoopers' initial findings on a Southern District Health Board budget blowout will be presented today to the audit and risk management committee, a DHB spokesman says.

The DHB called in the business services company to find out why its financial forecasts did not stack up in 2011-12.

Although there is no final figure, the operating deficit could be $15 million to $15.5 million.

A spokesman for chief executive Carole Heatly said the DHB had started to address the problems.

"We are working with PWC to inform those changes and to ensure that we are on the right track."

The audit and risk management committee is not open to the public.

The PWC findings are likely to be discussed at the DHB's next full board meeting, in Invercargill, next month.

Audit and risk management committee chairman Tim Ward, of Invercargill, said he was yet to see the PWC report, which sought to determine what had gone wrong, and how things could be improved.

Board members had their "sleeves rolled up" and were well aware Health Minister Tony Ryall expected them to get the organisation back to financial health.

Asked why the deficit mattered when it was only about 1.8% of the year's $828 million revenue, Mr Ward said Mr Ryall faced a significant problem if all 20 DHBs overspent.

The quality of forecasting mattered because had it been more accurate, board members would have looked more "aggressively" for cost savings earlier in the year.

The year's forecast deficit was $10.17 million, which initially looked overly pessimistic.

 

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