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CEO in memo to staff on hospital finances: 'We are in trouble'

Health Sciences North's budget deficit could be $10M
Giroux
In a blog post to Health Sciences North staff, board members and volunteers, CEO Dominic Giroux the hospital is "in trouble" when it comes to its financial situation. (File)

Health Sciences North has been living beyond its means since the fiscal year 2013-2014, resulting in a possible $10-million structural deficit, says its president and chief executive officer in a blog post to staff, volunteers and board members that was given to Sudbury.com.

In an update to senior staff Wednesday, Giroux indicated HSN is in dire financial straits and said tough measures would have to be taken to address it. An earlier round of layoffs this year trimmed more than $800,000 from its budget with senior management layoffs.

"Let me begin by being painfully blunt: we are in trouble," Giroux said of HSN's financial situation.

You can read the report for yourself here.

On his first day of work at HSN, Oct. 2, 2017, the former president of Laurentian University said he was told the hospital had incurred a deficit of $5.3 million in the first five months of its 2017 fiscal year, from April to August.

In January of this year, HSN’s board of directors approved a 2017-2018 budget with a deficit capped at $5.9 million. Cost-saving initiatives had been undertaken and Giroux said the hospital’s senior managers were confident they could meet that target.

But on Feb. 20, senior vice-president and chief operating officer Joe Pilon and other senior administrators were informed by the finance department that the hospital actually had a revised base forecast deficit of $11.9 million as of Jan. 31.

By March 5, Pilon told the board’s finance committee that administrators were “tracking” a deficit as high as $10 million as of Jan. 31.

Giroux put the last four years in context in the blog post to staff, saying HSN had incurred a $7.1-million deficit in 2016-17, the largest among Ontario’s academic health science centres.

The deficit was “a major shift” given HSN’s audited financial statements from 2013-2014 to 2015-2016 showed a surplus every year. The less obvious part of the financial statements from 2013-2014 to 2015-2016 was the impact of year-end adjustments in each of those fiscal years, said Giroux.

Had those year-end adjustments been taken into account, the CEO said, those budget surpluses would actually have been deficits.

“The impact of these year-end adjustments — all audited and consistent with generally accepted accounting standards — is that without them, HSN would have reported deficits of $3.4 million in 2013-2014, $9.9 million in 2014-2015 and $10 million in 2015-2016,” said Giroux.

Read more on this story later at Sudbury.com.

Carol Mulligan is an award-winning reporter and one of Greater Sudbury’s most experienced journalists.


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