Otago District Health Board chairman Errol Millar says he can understand Health Minister Tony Ryall's reluctance to fund Dunedin Hospital upgrading when the board cannot meet its budget promises.
At the board's first meeting of the year yesterday, Mr Millar said he had been trying hard to talk Mr Ryall into upgrading board facilities, but the board needed to demonstrate it was "running the show with some professionalism and direction".
His comments came during discussion of a financial forecast from regional chief financial officer Robert Mackway-Jones showing the board expects a budget blowout of $3.9 million, pushing its deficit to $10.9 million.
In six months, it had already almost reached its allowed $7 million deficit.
It was only the end of September when the board committed itself to its financial recovery plan and that had now been shown to be a "crock".
Mr Ryall had tried to "cut the board some slack" by allowing it to have a $7 million deficit and extending the time for the board to break even to four years rather than three.
"He's tried to be helpful, but we're not being helpful to ourselves."
The existing situation could not continue, he said.
Former chairman Richard Thomson said the process of budgeting was one of the issues. A huge amount of time was put into the original district annual plan, which would be rejected and then the board would be given two weeks to change it without a similar amount of analysis and planning.
It was a system driven by political expediency rather than logic and designed to ensure the board got its plan approved by the minister.
It was a matter of the board putting a politically acceptable figure in, without proper analysis, or "we have to stick to our guns about what we can deliver".
The board's original plan for the year had a $9.7 million deficit.
Deputy chairwoman Susie Johnstone, who heads the board's audit, finance and risk management committee, said it seemed that somewhere between October and January " the wheels tend to fall off"'.
This effectively meant the board had only four months of the year left to turn the situation around.
"We need to be thinking about it much earlier."
One of the issues was that the organisation had operated in deficit for many years.
Board management will present a new financial recovery plan to the audit, finance and risk management committee, which meets on February 15.
