Ballan District Health and Care suffered a $1,145,942 operating loss last financial year, on top of an almost $2.2 million loss the previous year, casting a shadow over the service’s future.
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Auditors have warned that the future of the health service to continue in its current form is doubtful if changes are not made.
“These events or conditions … indicate that a material uncertainty exists that may cast significant doubt on Ballan District Soldiers’ Memorial Bush Nursing Hospital Hostel Inc’s ability to continue as a going concern,” auditors Accounting and Audit Solutions Bendigo wrote in the BDHC annual report tabled at its annual general meeting on Wednesday.
The warning came a day after the state government stepped in, issuing a “Letter of Comfort” to underwrite the organisation’s “reasonable operating expenses” for the next four months.
The annual report revealed BDHC received the letter on October 16, less than two months after the department granted a $500,000 loan to assist with the hospital’s cash flow needs.
“The Ballan District Health & Care sits at the heart of the local community and we have to do everything we can to protect it,” said health minister Jill Hennessy.
“We’ve provided assistance to the Health Service to ensure it can find its feet again and we’ll continue to stand with workers and patients to ensure it remains a facility locals can depend on.”
In addition to BDHC’s financial woes, five board members have resigned over the past year and it is believed a sixth board member resigned, then withdrew their resignation, this month.
The board and management of the health service have committed to work with the health department and independent reviewers to make changes to shore up the hospital’s financial viability.
“We can’t keep going this way. We don’t want to start cutting back on services because really we should be expanding because our community is growing,” said BDHC board of management vice president Robert Eskdale.
“In the medium term some of the things we have put in place will turn things around … but we are not covering all of our costs at the moment so we need to restructure some of our business and possibly some of the things we are doing we may not do in future, but there may be other things we bring in,” he said.
Mr Eskdale said the independent review would be finalised in December and the board would report back to the community on its findings at a public meeting.
Ballan newsagent Ian Ireland said there was “discontent” among the local community about the financial woes and future of the hospital and its associated services.
“My opinion is that the growth has outweighed the financial return and has consequently put it in this situation,” he said, adding he was surprised the state government had not appointed administrators when the initial $500,000 loan was made.
“We need an administrated to run the place for 12 or 18 months to find out if it’s viable or not, otherwise it doesn’t matter how much money is poured in we won’t get an outcome.
“It is a needed facility but it’s got to be running on profitable basis as it is a private enterprise.”
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