DAP 2009/10 Final 1 - Taranaki District Health Board

DAP 2009/10 FinalNotes:A: The net consolidated financial result is AFTER recognising the:I. expenditure against ring fenced Mental Health surpluses carried forward fromprior financial periods,II. expenditure on account of Workforce Development initiatives (an appropriationagainst retained surpluses),III. expenditure on Mâori Health gains project (an appropriation against retainedsurpluses), andIV. expenditure on strategic Hospital Provider projects (an appropriation againstretained surpluses)The consolidated operating result BEFORE the appropriations against prior periodretained surpluses is a financial breakeven position , with an operating surplus of$0.098M, $0.062M and $ 0.49M for the plan periods 2009/10, 2010/11 and 2011/12respectively.B: Expenditure against prior period surpluses: These relate to short to medium terminvestment in strategic services and operations viz. Workforce development ($ 2.5Million) and Maori Health inequalities ($ 3.0 M). These investments were committedby the Board, and will span more than one financial period, and are outside the coreannual operating budget. The investment is to be funded out of carried forwardsurpluses from prior periods. Due to timing, if this committed outlay does noteventuate or is less than what was planned for the period, the financial results of theDHB Funder operations will be favourable to that extent, as also the DHBconsolidated result. The Mental Health (MH) expenditure relates to ring fencedsurpluses arising from MH services in prior periods that are being expended fromcarried forward surpluses/reserves (Please also refer to 7.5.1).C: It is also to be noted that expenditure ($ 1.44M towards capital charge anddepreciation) incidental to the revaluation of assets (per FRS3 - land and buildings)carried out on 30 June 2008 is charged against the hospital provider. Thisextraordinary expenditure has had a material impact on TDHB’s financial and cashpositions. No confirmation or commitment for funding this expenditure has beenreceived (this was funded on a cost neutral basis during previous revaluationexercises). The corresponding funding if/when received will improve the hospitalprovider and also the consolidated financial results by $ 1.44M in each of thefinancial periods 2008/09 and plan years 2009/2012 - a significant improvement inthe financial results of the DHB.D: These financial results are to be read with the accompanying notes andassumptions.7.1 Key Points from the Budgeted Financials 2009-2012In principle, the Board has planned for a consolidated financial breakeven result ineach year of the plan period. However, this financial breakeven goes against theemerging trend across the entire planning period 2009-2012, which clearly indicatesthat cost growth in the hospital provider operations is significantly in excess offunding received, leaving residual operating deficits. The consolidated surplus isprimarily on account of the surpluses generated in the Funder operations during eachof the fiscal periods under consideration.44