The indicator board of health expenditure variance is defined as the percentage variance between a board of health’s projected annual budget for "core and related public health programs and services" and year-end actual expenditures with revenue from all sources.

Expenditure variance measures the effectiveness of internal fiscal management. A small amount of variance is expected, unless there are unforeseen events that result in one time financial anomalies.

Of the 36 boards of health, a total of 30 reported overall underspending totaling $34.6M in 2007, which represents approximately 4.0% of board of health budgets for core and related programs.

The most commonly cited reasons for underspending were staff vacancies due to difficulty in recruiting (cited by 21 boards of health), delays in recruiting due to delay in budget approvals (cited by 18 boards of health) and cost containment initiatives or planned gapping to actively manage expenditures.

The presence of surpluses is partly due to the timing of provincial government decisions on funding levels. While some municipalities will provide cash flow early in the calendar year in anticipation of government announcements of funding increases, others wait until the approval letters are received before allowing boards of health to spend at the new level.

Because of the lack of alignment between the fiscal years used by boards of health (January to December) and the provincial government (April to March), provincial funding approvals are not provided until well into the operational year for public health programs and services. Some municipalities delay their approvals to avoid financial risks, but this leaves little time for public health units to adjust their spending or program service levels either up or down to accommodate the provincial funding adjustment.

Overspending totaled $1.6M in 2007, which accounts for less than one percent of reported planned expenditures of $870.7M. Out of the total of six boards of health that reported overspending, three accounted for 88% of the total.

The commonly cited reasons for overspending were unexpected demand for programs (cited by 5 boards of health), funding shortfalls (cited by 4 boards of health) and unanticipated in-year costs (e.g., training, one time purchases of office equipment).

Definition:

Percent variance between a board of health's projected annual budget for "core and related public health programs and services", and year-end actual expenditures in with revenue from all sources in 2007.

Data Source(s):

Survey of boards of health, 2008

Formula:

(year-end actual expenditures - projected annual expenditures) projected annual expenditures

x 100

Notes:

• Note that these categories do not align with those used by the ministry in its Program Based Grant funding package, where "Related Programs" has a specific meaning; see notes under Total Board of Health Expenditures for further detail.
• Boards report that variances are usually program or funding source specific
• There has historically been underspending in board of health budgets due to the local municipal council control on the overall budget and the timing of ministry budget approvals. In some places, councils insist that program spending cannot exceed the prior year amount until ministry final budget approval is received
• Unexpected in year activities will impact actual expenditures of some boards of health, and therefore skew their variances