NHS Highland has strengthened its financial management but must rely less on one-off savings in order to stay on budget, according to Audit Scotland.
Auditor general for Scotland, Caroline Gardner has examined the troubled board’s finances just a few months after the public audit committee issued a scathing report about management in June.
The board came under scrutiny after it emerged that senior executives had sought a £2.5million loan from the Scottish Government in 2012/14 to help it break even.
Overspending, particularly at Raigmore Hospital in Inverness, contributed to the crisis.
In her report, Ms Gardner said: “NHS Highland has struggled to deliver the majority of its savings on a recurring basis for a number of years. This puts pressure on future years’ budgets as the board’s underlying recurring deficit has to be carried forward and added to the savings requirement for the following year.”
Despite this, the report found that the authority took actions including adopting more stringent controls on using locums and more closely monitoring savings and recovery plans.
NHS Highland chairman Garry Coutts welcomed the report, and said it reflected the “robust measures” taken to improve following the 2013/14 audit.
He said: “It is heartening to read in this latest report that the auditor has concluded that we have strengthened our financial management arrangements, transparency and scrutiny of our financial performance.
“This latest report makes the point that it is important for the board to build on these improvements given the challenges ahead. That is something we are determined to do.
“The report also points out that further work is required to develop longer-term financial planning and to reduce our reliance on non-recurring savings. Again, this is something on which we are very clearly focused.”