Financial statements reveal $83 million PHA accumulated deficit
Guardian Business Reporter
Published: Jan 11, 2017
The Public Hospitals Authority’s (PHA) latest audited financial statements reveal that the corporation had an accumulated deficit of over $80 million as of June 2014, and it would not be able to continue as a financially viable entity without government subsidization.
The reports raise concerns over the financial position of the public healthcare sector that is currently in preparation, along with its private sector counterparts, for National Health Insurance (NHI).
The PHA is comprised of its corporate headquarters, the Department of Public Health, Princess Margaret Hospital (PMH), Grand Bahama Health Services and Sandilands Rehabilitation Centre.
Minister of National Security Dr. Bernard Nottage tabled the authority’s audited financial statements for the years ending June 2012, 2013 and 2014 in the House of Assembly on Monday.
For the year ending June 2014, the authority’s deficit stood at $83.24 million; it stood at $73.18 million as of June 2013, and $73.04 million as of June 2012.
The independent auditors, Grant Thornton Bahamas and Baker Tilly Gomez, expressed their concerns over the authority’s ability to continue as a “going concern”.
A “going concern” qualification is a red flag because it is an indicator that a company cannot meet its debt obligations.
The auditors concluded that PHA’s financial position “indicates material uncertainty”, which “may cast significant doubt” on the corporation’s ability to continue as a “going concern” without financial support from the government.
The reports note that PHA “continues to operate at a deficit, and financial support from the government is essential for the continued operations of the authority”.
“It is the intention of the government to continue to financially support the authority as a going concern due to its role in the management of the government-owned hospitals and delivery of healthcare.”
PHA’s financial statements also reveal that staffing costs was the largest expense, followed by drugs and vaccines.
Staffing expenses totaled $126.86 million in the year ending June 2011 and increased to $138.07 million by June 2014.
Total expenses rose from $204.53 million in the year ending June 2011, to $221.30 million in the year ending June 2014.
Each report also showed that PHA is not in a financial position to meet its short-term debt obligations.
The financial statement for the year ending June 2014 reveals that PHA’s current liabilities exceeded its current assets by $23.10 million.