Foreword

Through the Health Funding Package, which was introduced in 2002, the Government has injected a considerable amount of new spending into the health sector. The package introduced a three-year horizon for health funding to replace the previous annual funding cycle.

I undertook this audit to provide Parliament with a better understanding of where the Health Funding Package had been allocated between 2002 and 2005.

I found the Ministry of Health had good documentation to support decisions on allocating the package. However, it is not possible to say from this audit how the Health Funding Package was ultimately spent, because district health boards, and many Ministry directorates, did not keep separate records of Health Funding Package funds.

The package has provided more planning certainty than the previous annual funding cycle. However, there has been a concurrent and significant change with the introduction of population-based funding, and uncertainties still exist connected with the new funding arrangements.

District health board deficits decreased following introduction of the package, but have increased in the latest financial year.

The aim to cap new funding available to the health sector through the Health Funding Package has not been achieved. Additional funding has been appropriated for the health sector from outside the Health Funding Package.

Kevin Brady
Controller and Auditor-General

30 October 2006