Concerns NZ’s Public Health Department Managed $28 Billion Budget on Single Excel Spreadsheet

An independent report called the agency’s reliance on a single Excel spreadsheet a ’major issue' and found a lack of control over expenditure and revenue.

Stethoscope on spreadsheet paper. chormail/depositphotos

The government department responsible for New Zealand’s public health system—including hospitals, specialist services, and community care—managed its $28 billion (US$16 billion) annual budget on a single Excel spreadsheet, a situation auditors Deloitte called a “major issue.”

Health NZ was established in 2022 after the government merged the functions of 20 former District Health Boards into a single national entity with regional divisions and district offices. It is New Zealand’s largest employer.

Deloitte’s financial review, published on the agency’s website, said the spreadsheet was the main data file used to manage its financial performance and to produce several financial reports.

“The use of an Excel spreadsheet file to track and report financial performance for a $28 billion expenditure organisation raises significant concerns, particularly when other more appropriate systems are present on the IT landscape,” it stated.

The source of information added to the document was often hard to trace, errors were not immediately detected, and there was “limited tracking” to ensure information was not being “manipulated.”

Using spreadsheets was also “highly prone to human error, such as accidental typing of a number or omission of a zero.”

The method also meant the agency could not obtain real-time financial information, with reports taking 12 to 15 days to produce and five days to analyse.

Attempts to Balance the Books Were ‘Ineffective’

As well as inadequately tracking both revenue and expenditure, Health NZ’s savings plans—aimed at bridging the gap between the two—were “ineffective,” Deloitte found.

“HNZ aimed to achieve $540 million in savings at the start of the financial year, which were imperative to ensuring the affordability of the health services expected to be provided over 2023/24,” the report says.

“However, there were no supporting action plans, ownership, budget impacts, tracking and reporting, and governance applied to the savings programme, and consequently the savings were not made.

“Ultimately the savings plan was never achievable,” Deloitte concluded. “If they did not achieve a month’s saving target, some districts would spread it across the remaining fiscal year months, leading to an ambitious and unrealistic savings target by year-end that could not be met. There was never buy-in to the savings from operational teams, and significant savings requests were not getting attention.”

A last-minute attempt to balance revenue and expenditure in late 2023/24 also failed, leaving Health NZ spending $130 million more every month than it received.

Graph showing Health NZ's budget vs actual expenditure. Data from Health NZ.

Deloitte recommended that “Budgets should be underpinned by realistic financial and operational plans, with timing of revenue and expenditure aligned with expectations and underlying assumptions are consistently applied across the organisation,” adding, “It is imperative to closely monitor and track performance to hold budget holders accountable and take prompt corrective action as needed.”

The agency’s response to the report says it implemented a solution for the Excel sheet in June. The sheet is still in use but now runs alongside an automated reporting system.

It has admitted to all the issues highlighted in the report and agreed with all its recommendations.

Health NZ said there were “many factors at play” leading to the loss of financial control and the disconnect between expenditure and revenue.

Financial plans “lacked the necessary detail to enable management to stay within available funding,” it said.

Board to Be Reinstated

Health Minister Simeon Brown has said he plans to reinstate the agency’s board, which was sacked and replaced with Commissioner Lester Levy in July last year, under former minister Dr. Shane Reti, who expressed concerns about its financial management and performance.

It also blamed government-imposed restructuring, saying “significant changes to organisational structures and people led to a lack of role continuity and clarity” as a result, and that “significant capabilities and experience were lost that could have mitigated the control failures.”

Levy said Health NZ had been through several years of uncertainty, but the release of the Health Delivery Plan meant it was “on a path to increased stability.”

Interim Chief Executive Dale Bramley—in place since the agency’s three top executives resigned within a week of one another earlier this year—said it would work to its health plan to ensure future stability.

“The delivery plan sets clear milestones to achieve our objectives by the end of the 2026 financial year and to drive better patient outcomes,” he said.

However, Health NZ’s response document also highlights the ongoing recruitment and retention issues within the public health sector.

It also says there are still multiple “ongoing open vacancies” across the sector.