18 Jun 2015

Underfunding partly to blame - board member

12:40 pm on 18 June 2015

Two members of the sacked Southern District Health Board are hitting back at a report highly critical of the the board's financial management.

One says government underfunding was also a factor in the board's performance.

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Photo: RNZ / Ian Telfer

Health Minister Jonathan Coleman dismissed the board yesterday and appointed a commissioner, Dunedin legal consultant Kathy Grant.

The confidential report obtained by Radio New Zealand News was written by the chief executive of the Nelson Marlborough DHB, Chris Fleming, who spent two weeks in Dunedin in March.

His report said the Southern DHB got monthly financial reports too late, its annual budget-setting was well behind schedule and it did not properly challenge all spending increases.

However, one of the elected board members to lose his job, John Chambers, says underfunding was also a factor.

Management often had trouble producing figures in a timely manner, he said.

"It resulted as a board member in us being the victim of some surprises over the past year - where at a board meeting you find estimates, for example on care of the elderly, were out by four and a half million [dollars]."

One of the board's newly appointed deputy commissioners, Richard Thomson, said the problems were not as simple as poor management.

The board had been under huge financial pressure for several years, he said.

Some of the problems went back to before the Otago and Southland DHBs were merged in 2010, he said.

When asked whether Southern District Health Board chief executive Carole Heatly should lose her job, Mr Thomson said in his view, "consistency of management was needed".

"I think it would be a really dangerous situation to put a new governance structure in and immediately go and replace management. You could end up in a situation where very few people know what's going on."

No 'slash and burn' approach

Mr Thomson, a former board member himself, said the board, now had some "breathing space" to look at long-term solutions.

He said while there was no doubt it would have to look at how services were "structured", the Southland and Otago residents could rest assured they would remain entitled to the same services as anyone else in the country.

"The Government has given us a clear indication that it's not looking for us to go in and slash and burn and do a short-term fix that will not actually solve a long-term problem."

Mr Thomson chaired Otago District Health Board for eight years before being sacked in 2009 by then Health Minister Tony Ryall, who held him accountable for a $17 million fraud by a senior staff member, which happened under his watch.

The other deputy commissioner is Dunedin City Holdings chairman Graham Crombie.

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