DISTRICT HEALTH BOARD ACCOUNTABILITY ARRANGEMENTS
   

MEMORANDUM TO CABINET SOCIAL POLICY AND HEALTH COMMITTEE

ROLE OF THE MINISTER OF FINANCE IN RESPECT OF DHBS



    Risk Management Information Requirements

  1. To properly undertake the appropriate risk management role within the health sector (under either option 1 or 2), the Minister of Finance must be able to access any necessary information. In the Accountability paper [reference to follow after 8 May Cabinet] Cabinet agreed:

    "the provisions of Section 26 of the Health and Disability Services Act allowing the Minister of Finance to request financial forecasts and financial information be included in the new legislation"

  2. It is recommended that this provision be extended to any information relevant to the economic and financial performance of DHBs or their associated bodies.

    CCMAU COMMENT

  3. If CCMAU (Health) remains independent of the Ministry, it is not necessary for the Minister of Finance to fully share responsibilities and therefore option two would be appropriate. If ownership monitoring is subsumed within the Ministry then there would be a case to support option one.

    THE CROWN'S RELATIONSHIP WITH MÄORI

  4. There are no implications for the Crown's relationship with Maori arising from this paper.

    CONSULTATION

  5. Treasury, CCMAU and the State Services Commission have been consulted and their views have been reflected within this paper.

    FINANCIAL IMPLICATIONS

  6. No fiscal implications have been identified at this stage.

    LEGISLATIVE IMPLICATIONS

  7. The decisions taken based on this paper will be incorporated into the New Zealand Public Health and Disability Bill

    COMPLIANCE COSTS STATEMENT

  8. There are no costs of compliance that have been identified.

    REGULATORY IMPACT STATEMENT

  9. A regulatory impact statement will be included with the paper.

    HUMAN RIGHTS IMPLICATIONS

  10. There are no implications relating to Human rights.
CABINET

    1. directed officials to report back to the Ad Hoc Ministerial Committee with advice on inter alia:

      1. the role of the Minister of Finance in respect of District Health Boards (DHBs), including provisions to be made in the enabling legislation, by 8 May 2000;

      2. development of specific rewards and sanctions for application by the Ministers, and the criteria for their application - report back for those to be incorporated into legislation by 8 May 2000, and on the complete framework by 31 August 2000;

    2. agreed that the provisions of section 26 of the Health and Disability Services Act 1993, allowing the Minister of Finance to request financial forecasts and financial information, be included in the new legislation [CAB (00) M 15/10 refers];

ROLE OF THE MINISTER OF FINANCE

    1. noted that the Minister of Finance has an interest in DHBs as a result of the associated fiscal risks arising from the DHBs comprising a significant component of the Crown's balance sheet and operating budget;

    2. noted that papers on the Minister of Finance's role in relation to investments and major transactions will be considered by SPH on 13 June 2000 [SPH (00) 62 and 66 refer];

    3. agreed that the Cabinet decision on section 26 of the Health and Disability Services Act, referred to in paragraph (a)(ii) above, be widened to enable the Minister of Finance to also request any information relevant to the economic and financial performance of DHBs or their associated bodies;

    4. agreed that a risk based approach be taken regarding the Minister of Finance's roles in DHBs involving: joint Ministerial approval being required for some DHB decisions that involve significant fiscal risk; the Minister of Health consulting the Minister of Finance on decisions that have a lower fiscal risk; and increased Minister of Finance involvement when a DHB represents a fiscal risk to the Crown through poor performance;

    5. agreed that the Minister of Finance would initially have maximum involvement (as DHBs are established), and that the Minister of Finance in addition to his usual role: would have the ability to request from the DHB any information relevant to the ownership interest; would agree to the financial components of the DHB's Annual Plan, Strategic Plan and Statement of Intent; would agree to any terms and conditions around the support of these documents; and would have the ability to request that Treasury, in conjunction with the Ministry of Health and CCMAU, undertake a review of the financial performance of the DHB;

    6. noted that the approach referred to in paragraph (f) above would require the Minister of Health to consult with the Minister of Finance in regard to key accountability documents prior to supporting such documents;

    7. agreed that, for the Minister of Finance to be able to assess the level of risk in an individual DHB, the regular financial performance information and the risk assessment of each DHB will be provided to the Minister of Finance by the Minister of Health;

    8. directed officials to incorporate a process for advising and resolving any differences of opinion between the Ministers of Finance and Health regarding the fiscal risk of any DHB as a part of the report back on incentives and sanctions referred to in paragraph (a)(i)(B) above;

    9. directed officials to incorporate the four aspects of the Minister of Finance's role referred to in paragraph (f) above into the process for advising and resolving any differences of opinion, for any DHB whose financial performance has been poor enough that they represent a significant fiscal risk.


 
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