An embattled Yorkshire trust has appointed an interim chair after its former chair was sacked and two directors resigned in December.

Scarborough and North East Yorkshire Healthcare trust says it has employed Mike Collier for three months from 1 January while it seeks to strengthen its governance arrangements. Mr Collier was a non-executive director and chair of the audit committee at Yorkshire and the Humber strategic health authority.

The trust has been scrutinised by the Audit Commission for at least two years, culminating in a strategic health authority governance review last summer. The highly critical report found the board's ability to meet financial targets and the financial management of the trust were seriously lacking.

The report found:

  • errors in financial statements;
  • failure to manage business risks;
  • failure to manage and improve value for money;
  • failure to set up a medium-term financial strategy and budgetary controls with strategic objectives.

A letter from the Audit Commission at the end of 2006 concluded that the position 'remains perilous'. The trust is expected to be£20m in the red by the end of March. The commission said it would continue to monitor its progress and would take further action if necessary.

Last month the former chair, Richard Grunwell, was forced by the Appointments Commission to quit, after being asked to leave six months ago. Former chief executive Alison Guy and finance director Bernard Flynn had been suspended on full pay since July 2006, but did not resign until 31 December.

Martin Robson has been acting finance director since September, and Iain McInnes has stepped in as interim chief executive, after working as chief executive of Eastern Hull primary care trust before it merged to become Hull teaching PCT.

A trust spokeswoman said the trust aimed to fill all three posts by spring, and Mr McInnes was 'openly interested in applying' for the post.

Commenting on the trust's future, Mr McInnes told HSJ: 'Scarborough and North East Yorkshire trust has been through some difficult times of late and has faced a number of challenges.

'However, many of these are now resolved: in particular, we have a turnaround plan in place, governance arrangements have been strengthened, and the auditor has been reassured that we are making progress. By continuing to strengthen our co-operation with partner organisations, we're working hard to establish a secure and sustainable future for local healthcare services'.