Acting chairman Paul Menzies says the board cannot afford the elective surgery it has been "overdelivering".
"We've got to get better control on our spending, and our ordering, and who's making the decisions, and the connections between them and the people who are paying the money out," he said.
The DHB, grappling with a projected 2011-12 deficit between $15 million and $15.5 million, is trying to cut costs.
Business services company PricewaterhouseCoopers has been called in to report on how the DHB's finance department got 2011-12 forecasts wrong.
Originally, the DHB projected a $10.17 million deficit, which for several months seemed overly pessimistic.
However, at the start of the calendar year, costs blew out, particularly on staff budgets.
Otago elective surgery case-weights were 11.4% more than in the plan for financial year to the end of May, last week's hospital advisory committee heard.
Electives were below plan in Southland by 6.2%.
There was scope for reducing staff costs, which accounted for about $560 million (about 70% of revenue) this year, Mr Menzies said.
Mr Menzies, while not giving a figure, said a modest percentage reduction could generate millions of dollars in savings.
The DHB has started restructuring for single clinical divisions, rather than duplications in Dunedin and Invercargill. Mr Menzies said this was a major piece of work, because there were widely varying arrangements in the two cities.
New chief executive Carole Heatly had a "baptism of fire" in her first few months in the job.
She had embarked on a reorganisation, a difficult task in any institution but probably even more so in health.
"She's well aware that our systems have a long way to go ...
and she compares that with some pretty tight stuff under the NHS."
Association of Salaried Medical Specialists executive director Ian Powell said exceeding targets was good, as it meant more patients were treated.
"If those treatments had not occurred, a number of patients would not have had the treatments and operations that they were entitled to, and needed."
Penalties introduced for DHBs' not providing elective surgery in a certain time frame might have had unintended consequences, he suggested.
It was hard to hit targets exactly, and some DHBs might be overshooting, he said.
Southern DHB Crown monitor Stuart McLauchlan said the main reason for overdelivering electives was outsourcing surgery ordered from Mercy Hospital recently, without the finance department realising the cost implications.
He said the PricewaterhouseCoopers report would shed more light on the situation.
Overdelivering against government targets could be positive, but must be done efficiently, Mr McLauchlan said.
The "horse had bolted" for 2011-12, but the DHB needed to get back on track in the new financial year, he said.
