The operating difficulties of East Iceland’s Healthcare Centre (HSA) must be addressed, and the services it provides must be defined. HSA management must show greater restraint in operations than has been the case to date, and the Ministry of Health must be more active in ensuring budget implementation. Furthermore, the Ministry needs to reach a performance management agreement with HSA, and the Centre must improve its strategic planning.

East Iceland’s Healthcare Centre was established a decade ago by merging the healthcare centres in the area from Bakkafjördur in the north to Djúpavogur in the south. The National Audit Office’s report East Iceland’s Healthcare Centre. Performance Audit Report shows that some benefit has been gained with the merger. Healthcare services in east Iceland are now more reliable and more varied than was previously the case. On the other hand, organisation and planning relating to the merger was inadequate.

HSA’s expenses have repeatedly exceeded budget appropriations in recent years. The National Audit Office is of the opinion that this is because the budget has not been in accordance with the scope of the operation. It is vital that the Ministry of Health define, in co-operation with HSA, what services the Centre is to provide and ensures funding to cover such activities. Moreover, the management of HSA must exercise greater restraint and resourcefulness in the operation than has been the case and must comply with the statutory duties of management in this respect. Furthermore, the National Audit Office believes that the Ministry of Health should make greater efforts to follow-up on budget implementation in institutions under its control.

The National Audit Office believes that HSA’s new organisational chart will have a positive effect on the development of the operation and reduce the area-specific divisions that have characterised the Centre to date. Moreover, the National Audit Office considers that the Centre’s management of technological issues is exemplary. However, a performance management agreement between the Ministry of Health and HSA must be reached. Such agreement has not been in effect since 2003. Furthermore, the Centre needs to improve its strategic planning, as regards both long-term plans and yearly plans.

The report reveals that HSA’s actual cost per resident in the area remained more or less the same during the period 2005–7. The National Audit Office’s examination also shows that efficiency improved during the period, both in inpatient wards and in healthcare centres. However, the National Audit Office is critical of the fact that information on the activities of healthcare facilities in Iceland is minimal and feels that it is vital that this is remedied. The report also provides various other suggestions that relate to the operation and management of HSA and the role of the Ministry of Health.