National regulator Monitor has announced it has opened an investigation at Doncaster and Bassetlaw Hospitals NHS Foundation Trust (DBH) due to a "significant deterioration in its finances" despite the trust having predicted a £2.2m surplus for this financial year.
The trust's latest financial data has sparked concern that it may now "record a large loss for 2015-16", which Monitor fears could force it to apply for funding support to keep afloat.
Earlier this month DBH tried to reassure patients that they "should not be concerned" about its financial position and that patient care will continue as normal.
It emerged that there had been concern over the accuracy of previously reported financial positions, which led an internal investigation to find that it has been spending more every month than it has been earning. Both external and internal investigations are ongoing.
Paul Chandler, regional director at Monitor, said: "People are relying on Doncaster and Bassetlaw to provide them with high quality healthcare now and in the future. Therefore, we need to make sure the trust can do this in a sustainable way and within its budget.
"We have launched this investigation to find out more about the financial situation at the trust and to establish what can be done to improve things."
Monitor will examine the state of the trust’s finances, assess the strength of its financial management and ways of improving its long-term financial sustainability before revealing the outcome of the investigation in the coming months.
Mike Pinkerton, DBH chief executive, said: "We will be fully co-operating with Monitor during its investigation. As a trust we will be working hard to maximise savings by remaining focussed on putting patient care first and scrutinising how we currently do things - we know that if our patients receive the right care at the right time then efficiencies will follow.”
In July NHS trusts across Yorkshire were told to make further savings in a bid to reduce their growing debts - Leeds Teaching Hospitals NHS Trust and Hull and East Yorkshire Hospitals NHS Trust were told to save over £5m extra each.
The cost-cutting bid preceded the move by Monitor and the NHS Trust Development Authority to reveal that trusts in England had racked up a deficit approaching £1bn in the first three months of the financial year.
The figure is more than the £820m overspend for the entire previous year.
It has been suggested that the deficit among the trusts could top £2bn for the whole of the current financial year.