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Unsatisfactory financial management in regional health authorities and health trusts

Combined, the regional health authorities have failed to meet their owner’s financial management requirements every year during the period 2002 to 2008. During this period, the health trusts had an accumulated deficit of around NOK 10 billion compared to the performance requirements. - It is unacceptable that, over many years, the regional health authorities have failed to adapt to the annual financial framework adopted by the Storting for specialist health services, says Director General Therese Johnsen of the Office of the Auditor General.
Published 11/10/2009 12:40 PM

Document 3:3 (2009-2010) The Office of the Auditor General’s investigation into the financial management of the regional health authorities and health trusts was submitted to the Storting on 10 November 2009.

More than half the health trusts replaced their chief executives during the period 2006-2008, while 15 of 19 health trusts appointed new directors of finance. - It is unfortunate that the senior management of health trusts is replaced so often. It is difficult to succeed with restructuring and achieve good cost control if hospital managements do not have a long-term perspective and continuity over several years, says Therese Johnsen.

It is a distinguishing feature of health trusts that succeed in achieving good financial management that they start their budget process earlier than other health trusts. That gives them sufficient time to identify, plan and ensure support for restructuring measures in the clinical entities. The investigation shows that better cost control is achieved in clinical entities in which lower-level management is systematically involved in processes of importance to financial management.

The investigation demonstrated a clear connection between long-term planning, the realisation of restructuring measures and good financial management. - Systematic transfer of experience in the areas of management and planning will provide more health trusts with input from which they can learn and improve, says Therese Johnsen.

The investigation shows that the management of clinical entities varies greatly within one and the same health trust. In the Office of the Auditor General’s assessment, more uniform internal control will help to improve cost control in the specialist health service. - The Ministry of Health and Care Services must ensure that the boards of directors make sure that these management tasks are given priority in future, says Therese Johnsen.

During the period from 2002 to 2008, the owner has partly dealt with the health trusts’ deficit by allocating extra funds during the year. The investigation shows that the expectation of extra allocations being made results in the budget process not being taken sufficiently seriously and in necessary restructuring measures not being given priority in the clinical entities. - Extensive use of extra allocations should be avoided in order not to undermine the authority of the health trusts’ management, says Therese Johnsen.

The summary of the report can be found through the link to the right. Public institutions can order the Document in Norwegian from Government Administration Services, tel. 22 24 20 00, Others can order it from Fagbokforlaget AS, tel. 55 38 66 00, .

The deferral of public access to documents prepared by or for the Office of the Auditor General in connection with Document 3:3 (2009-2010), cf. the Act relating to the Office of the Auditor General section 18 second paragraph, is hereby set aside.

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Director General Therese Johnsen,
phone: + 47 22 24 11 74
cell phone: + 47 911 52 826

Riksrevisjonen, Storgata 16, P.O. Box 6835 St. Olavs plass, 0130 Oslo, Norway

Phone: +47 22 24 10 00 974 760 843