Update on Region Finances: Another Surplus in January

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Update on Region Finances: Another Surplus in January


The monthly financial communications serve as a great way to keep practitioners and employees informed and in touch with our financial challenges – and successes – both current and as we move into the next fiscal year. Being aware of our financial situation is integral to keeping all staff and practitioners involved in the work of ensuring we stay on track to the best of our ability.

January Results

The region posted another small surplus in January of $1.1 million, bringing our year to date deficit to $2.2 million.  To put this in perspective, we spent, on average, $2.93 million per day in the month of January, so our year to date deficit represents less than one day of spending.  This is a huge accomplishment and a testament to what we can achieve by working collectively toward our responsibility of financial accountability.  In comparison, our year to date deficit at January 31, 2016 was $7.3 million and we ended the year with a $15.2 million deficit.

Even with the favourable results in both December and January, we are still projecting a significant deficit of $7.4M to the end of the year. This can create cash flow challenges.  

Historical trends show that February and March are very expensive months.  In addition to the historical spending patterns, we also know that we will be incurring approximately $1.3 million of unplanned expenditures before year-end for repairs to our aging infrastructure.

Where are our challenges and successes?   

  • At the end of January, we were spending $14.2 million more on compensation than our budget allows.  We expect this unfavourable variance to grow to $18.2 million by the end of the year.  We continue our focused work to identify variations in resource usage and to align our people costs with available resources.
  • Supply costs, particularly medical supplies, have a surplus of $1.3 million.  We have been successful in reducing our medical supply costs through 3sHealth provincial procurement contracts, and efforts in product standardization and better inventory management.
  • We have revenue surpluses of $10.4 million.  Some of this revenue is targeted to specific initiatives, some is due to increased volumes for billable services, and some is one time revenue.  We will be analyzing in more detail our revenue surpluses to identify sustainable revenues we can count on for next year.

We have said all year that diligent daily management is the key to the improvements we are seeing.  Through the last two months of the year, we will continue with special focus on this.  If we continue with this diligence, we will position ourselves well financially as we move into next year and the provincial transformation.

Our staff’s creative thinking and the motivation to make positive change is the cornerstone to our success!  Shout outs go to:

Wendy Helmond, Primary Health Care.  Wendy took the initiative to change a manual supply order form to an electronic supply ordering system.  This change eliminated waste from duplicate client orders in Home Care, and cut medical supply expenses in half.  In addition to the dollar savings, user satisfaction increased by making the process easier and more seamless.

Ryan Wollbaum, Materials Management.  Ryan noticed that inventory order errors were occurring due to hand written, illegible, fax sheet being sent to Purchasing.  This was resulting in wrong quantities or wrong items being ordered.  Ryan worked with Purchasing to create a form on the computer and send it electronically to Purchasing.  This has all but eliminated the errors and has reduced the cost of freight to send supplies back and eliminated 20 per cent restocking charges.

Both of these are great examples of eliminating waste from the system.