Portland District Health recorded a $2.1 million deficit and a loss of $207,000 last financial year after it recorded a $798,000 surplus the previous year.

Releasing the annual report on Thursday, chairperson Peter Matthews and acting chief executive Karena Prevett said PDH needed more support in a climate where funding was finite.

"To ensure its service provision meets local needs, PDH must continue to engage with its community, to maintain and build partnerships with other health services in our region, and to work constructively with the state government," Ms Prevett said. "We operate in a climate where funding for health provision is finite.

"PDH is working closing with the Department of Health and continues to maintain service delivery in a financially sustainable manner."

The current chief executive Chris Giles is on personal leave.

READ MORE: 'Hands off Portland District Health': Napthine

The number of inpatients at PDH dropped from more than 5500 the previous two years to 4971, the lowest number since 2016.

However, there was huge growth in emergency presentations to the urgent care centre with a record 9464, up nearly 400 on the previous financial year and more than 2500 above 2016.

There were 6336 COVID tests carried out during the financial year and births remained about average at 76.

There are 490 staff employed at the service, or 310 equivalent full-time.

There were 42 occupational violence incidents reported over the last 12 months, 11.9 per cent of which resulted in a staff injury, illness or condition.

Only 60 per cent of workers said the health service did a good job of training new and existing staff in a survey. The state target is 80 per cent.

There were 197 compliments and 95 complaints made towards the health service.

READ MORE: Doctor shortage putting extra strain on Portland District Hospital

Chief financial officer Jim Mathewson said to get from a net result from transactions of a deficit of $3.3 million, the Victorian health department had to provide $6.95 million of sustainability funding.

"The previous financial year there was a surplus of $798,000," Mr Mathewson said. "So the difference in those results just shows that the challenges that a place like Portland has in particularly in terms of its workforce."

The hospital's expenditure was $61 million, with $3 million of that spent on COVID-19 provided in revenue by the health department.

"PDH faces a lot of challenges to try and reduce that amount of sustainability funding above the statement of priorities contract that we have with the department," he said.

Around 75 per cent of the whole revenue for the hospital comes from the department.

Staff salaries total around 63 per cent of spending; $38.5 million in salaries and wages and $4.5 million for temporary 'fee for service' doctors and agency workers.

Mr Matthews said the COVID-19 pandemic had impacted the financial result.

"All health services have been stretched over the last couple of years - we are no exception, and it will continue for some time," he said.

"We feel well prepared for that challenge but nonetheless, it will be a challenge.

"Portland District Health is one of the oldest hospitals in rural Victoria in indeed the state of Victoria. This is a proud record and it will be continued."

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