International Accreditation New Zealand - a Crown entity which audits facilities such as radiology departments - has cancelled accreditation of Dunedin's radiology department because of concerns such as wait times of up to nine months for MRI scans and critical staff shortages.
The service can still operate, but the SDHB cannot claim ACC revenue without accreditation.
In addition, the clinical services building which houses radiology has multiple issues, including water leaks and asbestos.
IANZ had issued several ''corrective action requests'' in the past and Deborah Powell, general secretary of Apex, a union representing radiologists, said accreditation loss had only been a matter of time if the SDHB took no action.
''They haven't done anything,'' she said.
''You can have as many excuses in the book as you like, and I am very sympathetic to their physical facility problems, but staffing, the number of radiologists they employ, is entirely under the control of the DHB.
''Yes, there is a shortage of radiologists in New Zealand, but that means they need to train more and take some control of their workforce planning.''
Apex had told staff the loss of accreditation was a systemic failure and no fault of theirs.
Dr Powell said staff at Dunedin Hospital were looking after patients as well as they could and took pride in their work, but were feeling ''a little under siege''.
''The fact of the matter is that their facilities are not adequate and there is no hiding from that,'' Dr Powell said.
''The physical facilities are inadequate ... The walls are leaking, there is an inside drain in the ceiling to catch the water which is dripping from God knows where.''
SDHB chief executive Chris Fleming said last week he hoped radiology would be ready to regain accreditation by June.
Dr Powell said she doubted it would meet that deadline, citing the fact Dunedin Hospital's ICU is yet to regain its accreditation as a training facility, four years after losing that status.
''This DHB just do not respond to issues in a timely fashion,'' she said.
SDHB specialist services executive director Patrick Ng said the board was close to ''comprehensively addressing'' the longstanding issues with the clinical services building.
The DHB was also addressing concerns raised by IANZ regarding radiology's computer system.
''We will be putting forward a proposal within the next month that seeks to address both staffing concerns and sets out a pathway for systematically improving MRI waiting times,'' Mr Ng said.
''I therefore think it is reasonable to be confident of achieving re-accreditation by June.''