The finance director of Doncaster and Bassetlaw Hospitals has resigned after the foundation trust discovered a previously unreported £12m deficit.

Matthew Lowry’s departure was announced yesterday after the trust’s year to date deficit was reported to the board. Doncaster and Bassetlaw had previously been forecasting a surplus for 2015-16.

Trust chief executive Mike Pinkerton has now ordered an external investigation into how the trust’s finances have been managed.

The trust said “internal financial controls” had raised concerns about the accuracy of previous reported positions. This caused Mr Lowry to carry out a review which revealed the trust was spending more every month than it was earning.

Mr Pinkerton said: “For the first five months of the year the accounts have been reported inaccurately to the director of finance and the board of directors and as a result I have requested an external investigation into how our finances have been managed, which is already underway.

“As the person ultimately responsible for the systems of financial management and control within the organisation, the director of finance and infrastructure has resigned.”

He added: “As the chief executive, I believe my role is to steady the ship and steer us through these difficult challenges ensuring we remain focused on patient care.

“The unprecedented financial pressure the NHS currently faces has been widely reported and as a trust we have saved £45 million over the last few years whilst investing in services. But there does come a point when that becomes very difficult to continue to make the savings required and meet the pressures of additional demand whilst maintaining and improving quality.

“Nevertheless, we will be working hard to maximise savings and minimize the future impact on the care we provide to our patients.”