MLAs call for accountability as NTHSSA deficit reaches $194 million

A committee of MLAs is calling for more accountability after the Northwest Territories Health and Social Services Authority’s (NTHSSA) deficit nearly quadrupled since the authority’s inception six years ago.

When NTHSSA was first established in 2016 following the amalgamation of six other regional health authorities, it had an accumulated deficit of $51 million. By the time the finance minister tabled the 2020-2021 public accounts last year, the deficit had grown to $194 million.

In the legislature last Friday, the Standing Committee on Government Operations, a committee of regular MLAs chaired by Yellowknife North MLA Rylund Johnson that examines the workings of the territorial government, provided a series of what they called “substantive recommendations” to improve the territorial government’s financial practices and reporting after reviewing the public accounts.

Two of the eight recommendations were very specific and looked to address the health authority’s deficit, while the other six recommendations centred around improved transparency on environmental liabilities, resource revenues, and tangible capital assets, and on improving financial reporting across the government.

“These reviews matter because they ask whether public money was spent prudently and as intended by the legislative assembly,” began Johnson, reading the committee’s report introduction, before tackling NTHSSA’s growing deficit.

“Part of the promise of amalgamating … was to ‘control spending’ while ‘improving care.’ NTHSSA’s creation was supposed to help use resources more effectively and improve accountability and risk management,” he said, noting the deficit has increased because expenses were $10 million to $35 million higher than revenues every year since inception.

The health authority says some of the big reasons for the deficit include the cost of overtime due to staff shortages, and being underfunded for locum costs, programs, growth in healthcare positions, and Covid-19 costs.

Johnson reported the GNWT planned to address these issues, understand other costs, and reduce the deficit to zero through a financial sustainability plan that was completed in December 2020.

“It’s unclear whether the financial sustainability plan is on track to reach its zero-deficit goal. Early reporting suggested that the plan was delayed and staffing efforts faced difficulties,” Johnson said, noting in the fiscal year after the sustainability plan came out, NTHSSA’s annual deficit “reached an all-time high of $34 million.”

He noted other plans and reports by the health department and NTHSSA don’t indicate if any savings have been found.

Reminding other MLAs the GNWT is forecast to run out of room to borrow money within four years, the committee called for reforms immediately to help get better value from existing healthcare resources, or else face reductions in services in the future.

“The health system faces relentless cost pressures, an aging population, and a need to keep up with technological innovation, all while maintaining service levels,” Johnson read, noting change starts with a solid understanding of the deficit.

The standing committee’s first recommendation was for the health department complete detailed reporting and analysis on the reasons for the deficit, included what has been budgeted for and what the actual results were.

Johnson also reported that when consulted, the office of the auditor general (OAG) had raised concerns about “internal controls” at the health authority. Internal controls are measures that help protect the government from things like fraud, corruption, and waste; and help measure the value the government is getting for its money.

“The OAG reported that many areas of internal controls needed improvement and noted this problem in a management letter to the authority,” continued Johnson. “Better internal controls at the NTHSSA are a key element to improving the performance and restoring financial sustainability.”

This concern led the standing committee to issue its second recommendation: that the health department share its response to the OAG’s concerns, and that the department should share its action items, progress, and timeline to improving its internal controls.

The standing committee finished its presentation by recommending the GNWT respond to their report and recommendations within 120 days.