Capital & Coast District Health Board in Wellington says it has cut costs but hasn't managed to keep to its savings plan.
The DHB is the country's most indebted, and its board members heard on Friday that it's $2 million worse off than it should be at this time of the year. Its deficit is forecast at $40 million.
The cost of clinical supplies and personnel were key reasons for two consecutive months of adverse results.
Among other measures to tackle the debt, all vacancies for non-clinical positions are being reviewed and deferred in cases where core services won't be affected.
Chief operating officer Chris Lowry says they'll also seek to use operating theatres and wards more effectively.
The Public Service Association says not filling some non-clinical and adminstrative vacancies is a risky move that will mean more work for doctors and others.