Lost in the numbers
Thursday, July 29, 2010 at 8:59PM NOTE: DUE TO MY LACK OF BEING ABLE TO RENDER HTML TABLES, AND THE AMOUNT OF BORING NUMBERS IN THIS POST, I EXPECT YOU TO FALL ASLEEP READING THIS. BUT AS I ALWAYS SAY, YOU GET WHAT YOU PAY FOR HERE.
When I read this article I am reminded of a saying learned long ago. "I may have been born at night, but not last night."
The crux of the article is how the Alberta Government just last year, spent $24 million terminating the employment of 450 nurses (for approx $53,000 each), in response to what Health Minister Gene Zwozdesky called "the worst global recession that’s hit since the 1930s". The article then talks about the prior year and how Alberta and Albertans were literally dying for nurses. We were short 1500 nurses and were recruiting from the Phillipines, India and the United Kingdom.
Of course the article goes on to say how we now again have a nursing shortage and the budget allows for hiring many of the same 450 positions back.
So, as much as I detest digging through the numbers, I was very interested in how the planning of such things looks from hindsight. Not surprisingly, it looks like simple bad planning on the surface.
Budget vs Actual Results from 09/10
Total Budgeted Revenue - $31.677 Billion
Total Actual Revenue - $35.652 Billion ($3.985 Billion OVER budget)
Total Base Budget for Health Services - $12.935 Billion
Total Actual Health Services Costs - $12.946 Billion ($11 Million over budget)
So, we at least have to see what was an obvious and blatant OOPS, which if being honest our government would have been well aware of at some point in mid 2009/2010 budget year. I am prepared to forgive this OOPS on the revenue line, but I can only surmise that the government entered a slash at all costs mentality at some point mid-year and decided to cut the 450 jobs, reduce healthcare service to Albertans, and incur the $24 Million one-time expense.
But this is where Minister Zwozdesky's simple statement starts to rub me the wrong way.
2010 / 2011 Budget
Total Budgeted revenue - $34 Billion
Total Budgeted base-funding Health expense - $14.3 Billion (an increase of nearly 10% over 09/10)
"Ok Chris, this is getting boring, please move on to your point....."
My point is this. The government simply screwed up, IF you want to give them the benefit of the doubt. But even if the government did THINK that 2009/2010 revenue was expected to hit the original lower number, they had a choice to make about terminating 450 nurses to bring the health budget back into line. It's around the same time they were making that choice, that they were budgeting for 2010/2011, and assumed a new revenue number of $34 Billion.
I am sure that budgeting a $34 Billion enterprise is a difficult excercise, and although I have built and managed many budgets, (not Billions but over $100 million), I know more that mistakes in the 10-20% range are not only possible, but very likely. Especially in a resource based economy like ours.
So my point, in summary (I am even starting to bore myself):
It's OK to be wrong. But when it is very obvious that you screwed up, and sometimes even when you are being pressed by your competition, it is best to simply say so. The truth probably lies somewhere between a knee-jerk reaction by the Premier and Minister Liepert at the time to cut costs, even recklessly, and the government actually not knowing what 2010/2011 might bring.
The mistake is maybe even forgiveable. But not accepting responsibility and refusing to work towards a culture of improved planning and treating employees and our tax dollars with humility, is not.
Finally, I must give credit where credit is due. Much has been written about Minister Dave Hancock agreeing to underwite operating deficits in the Education budget, so teacher lay-off can be avoided while hiring cycles took their course. We need to recognize that for the leadership and good planning that it was. Oh, and yes kudos to the Liberals for pointing it out.
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