Minister for Health and Ambulance Services Yvette D'Ath has issued a show cause notice to the North West Hospital and Health Service Board.
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Ms D'Ath said concerns had been raised around governance and financial management at NWHHS.
"The action I have taken today asks the Board to show cause as to why they should not be dismissed and an Administrator appointed," Ms D'Ath said.
"Ensuring the delivery of sustainable health services to the North West Queensland community is a priority."
The minister did not elaborate on what the concerns were about, though the NWHHS did have issues around accreditation of Mount Isa hospital last year.
The NWHHS services a population of around 32,000 people in north western Queensland and the Gulf of Carpentaria.
All 16 Hospital and Health Services in Queensland are governed by a Board. Each Board reports to the Minister of Health, and each Board in turn appoints a HHS Chief Executive.
Board responsibilities include the management of health service finances, land, buildings and staff.
The Minister also acknowledged the work of Paul Woodhouse, the inaugural Chair of the North West HHS Board, who is retiring after ten years' service.
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