Deloitte Reveals Health NZ Managed $28 Billion Expenditure on Single Spreadsheet
An independent report identified the government agency overseeing New Zealand’s health system, including hospitals and community care, as relying heavily on a single Excel spreadsheet to manage its $28 billion budget. Deloitte, the independent reviewer, categorized this reliance as a ‘major issue’ and noted a lack of control over expenditure and revenue.
Established in 2022, Health NZ emerged following the consolidation of 20 former District Health Boards into a national entity with regional divisions and district offices, making it the largest employer in New Zealand.
The use of a spreadsheet led to challenges in tracing information sources, detecting errors promptly, and ensuring data integrity. Additionally, the manual nature of using spreadsheets increased the risk of human error, such as incorrect data entry.
Consequently, Health NZ faced obstacles in obtaining real-time financial information, with report generation taking 12 to 15 days and analysis requiring five days. Deloitte’s findings also indicated that the agency’s efforts to balance revenue and expenditure effectively were ineffective.
Recommended Improvements and Agency Response
Deloitte recommended that Health NZ establish realistic financial and operational plans underpinning budgets, align the timing of revenue and expenditure with expectations, and consistently apply underlying assumptions throughout the organization. It emphasized the importance of monitoring performance closely, holding budget holders accountable, and taking corrective action promptly when necessary.
Health NZ responded to the report by implementing a solution for the Excel sheet in June, running it alongside an automated reporting system. The agency acknowledged the highlighted issues and agreed with all the recommendations put forth by Deloitte.
In light of the financial challenges, Health Minister Simeon Brown plans to reinstate the agency’s board, which was replaced by Commissioner Lester Levy in July last year. The organization attributed some of the control failures to government-imposed restructuring that led to a lack of role continuity and clarity.
The agency also acknowledged the presence of multiple open vacancies across the sector, indicating the need for continued efforts to address operational challenges and enhance financial management practices.
