Mistakes were made in forecasting how much the Ministry of Health's head office refit would cost, says director general Chai Chuah.
The Ministry budgeted $24 million for the refit in 2014, but later asked the government for an extra $18 million after a financial forecasting error.
Mr Chuah said extra funding was now being secured through a leasing agreement, without the need for any additional funding from the government.
The Health Minister said while the events were before his time as Minister he had made it clear to the director general that the handling of the matter was unacceptable.
Labour's health spokesperson, Annette King, said Mr Chuah should offer his resignation over the debacle.
The Ministry expected the project to be completed by the end of the year.