Otago District Health Board chairman Richard Thomson said he was not surprised at the review, which will cover planning and funding processes and cost structure, given the board's projected $9 million overall deficit.
"We've known for several months they want to put a fine tooth comb over all of the elements of our forward projections."
Chief executive of both boards Brian Rousseau said it would be very useful for the ministry to fully understand the situation the boards were in.
Concerns by the Otago board about sustainability delayed some community-based services supposed to be introduced last year - a move which has not been well received by some of those pushing for the new services.
Progress on implementing the recommendations from the Mental Health Review carried out in 2004 has also been questioned.
Miramare Needs Assessment and Services Co-ordination manager Kerry Hand said the review was a really good thing. The performance of the Otago board until recently had been "fairly abysmal", but the review could help the relatively new funding and planning team now in the board to make progress.
Long-time mental health services campaigner Jim Crowe was also positive, but pointed out that any review must be seen as a way of improving services, not reducing them. While funding was important, the needs of people who required services needed to be paramount.
The ministry will not be carrying out the review itself, but is seeking proposals from suitably qualified evaluators, who are expected to report back by December 17.
Mr Rousseau said he would be surprised if the work could be completed by then.
The review will look at the capability and capacity of the two boards to plan and fund mental health services and analyse the financial situation of the services, identifying areas for improvement that may be necessary or desirable.
It will cover plans, targets, reports and the associated decision-making processes of the boards relating to their mental health services from 2007-08.
Implications of its progress in implementing the mental health services plan will also be assessed.
Part of the review will include the views of large community providers and consumer and family representatives, although at this stage it is not known who will be canvassed since the consultant is yet to be appointed.
The work is independent of concerns raised by the boards about population-based funding as it relates to mental health. They consider that while they may receive funding for establishing new services, they cannot afford to keep them going. This issue is being considered as part of a review of population-based funding.
