15 February 2012 - Auckland District Health Board

Financial Commentary for December 2011
Financial Performance
Month
96
� The net result for the month is a deficit of $(2,183)k compared to the budgeted
deficit of $(1,742)k. This brings the year to date to a deficit of $(1,807)k compared to
the budgeted deficit of $(1,202)k.
� The result for the month is driven by higher revenue and higher operational costs.
� The month’s revenue was higher than budget by $3.7m. This was the result of:
a) Favourable Inter DHB revenue $2.9m primarily driven by higher IDF revenue
for PHO realignments $2.6m (refer Funder Payments below) and higher IDF
referrals $0.9m.
b) Favourable MoH sub-contracts revenue $0.5m due mainly to higher SCI funding
$0.2m and higher Other Side Contract revenue $0.3m.
c) Lower volumes of ACC and non residents $(0.8)m
d) Gains on mark to market valuation of interest rate swap instruments $1.4m
� The month’s expenditure was higher than budgeted by $(4.1)m. This was the result
of:
a) Unfavourable variance in Employee Costs of $(1.1)m, primarily due to higher cross
cover and locum costs, higher number of appointments for RMO’s on rotation,
jobsizing back pays, timing of RMO training expenses and higher utilisation of CME.
b) Unfavourable variance in Outsourced Services $(1.4)m following outsourcing in
Cardiac, Orthopaedics, General & Paediatric surgery to achieve ADHB population
elective discharge targets $(0.5)m and additional imaging services $(0.8)m.
c) Unfavourable Funder Payments (including IDF Outflows) of $(2.4)m due mainly to
increased PHO expenditure through the realignment of PHO’s $(2.6)m. This PHO
realignment also generates the higher revenue funding noted above.
d) Favourable variances in Depreciation, Interest and Capital Charges of $0.9m driven
by lower levels of capital expenditure, the devaluation of properties at last balance
date and a wash up of prior year Capital Charge.