Hospital bosses admitted that they will have to make job cuts in order to help tackle their £10.1 million debt.
Shrewsbury and Telford Hospital NHS Trust employs 5,500 staff at the Royal Shrewsbury Hospital and Telford's Princess Royal Hospital.
Last night Tom Taylor, the trust's chief executive, would not be drawn on how many jobs would go or which departments would be affected.
An independent inquiry, commissioned by Shropshire and Staffordshire Strategic Health Authority, revealed the trust's reported financial position "had very little correlation with reality".
During 2004/05 the trust had planned to break even, until it forecast a £3 million deficit.
But an external audit by KPMG revealed the actual shortfall was £10.1 million.
Coupled with historic debts totalling £19 million, the trust now has a deficit of more than £29 million.
Mr Taylor said: "I am reviewing our managerial and clinical staff structure and I will have to reduce the number of clinical divisions, and therefore we'll need fewer clinical directors and managers.
"I will consult with all staff but there will need to be some job cuts. I am talking to them about a different structure, as we cannot run with the number of people we currently employ.
"As far as I'm concerned the key thing is to protect frontline services.
"What we want to have here is two financially viable hospitals, we want to keep both sites open.
"However, what services are provided on these sites is subject to the current review."
A month-long consultation exercise with key stakeholders will begin on November 21, followed by public consultation which is set to start in January 2006.
A similar exercise is already underway in Worcestershire Acute Hospitals NHS Trust, where plans to save £20 million include the possible downgrading of Alexandra Hospital in Redditch.
Concerns over the trust's were first raised by two nonexecutive directors in June 2004, but the true financial position was only reported to the board in March.
Former chairman Phil Homer and ex-director of finance Martin Herd both resigned ahead of the investigation, and former chief executive Neil Taylor had already left the trust.
David Nicholson, the SHA's chief executive, said: "This has been a major breakdown of board governance and the organisation was clearly very badly managed.
"The financial reporting was not as rigorous as it should have been and this applies across the board.
"There were people who understood the scope of this deficit but chose not to report it."