The board had budgeted for a $14.9 million deficit, but by the end of March was $8.5 million better off than expected.
At yesterday's board meeting in Invercargill, the board agreed to seek $6.6 million deficit support from the Government.
General manager of finance and funding Robert Mackway-Jones told the meeting this money would be required in June to allow the board to maintain its cashflow and capital expenditure programme.
Chief executive Brian Rousseau said the favourable financial position was because of a number of one-off payments rather than an indication the board's operational performance was "significantly better".
In March, it recorded a surplus of $1.7 million.
The key unfavourable area of expenditure continued to be rest-home care, Mr Rousseau said. It is expected to be $4 million over the $30.7 million budget by the end of the June financial year.
Acting finance and funding general manager David Dickson, in his report, showed March rest-home spending was $702,000 over budget, partly because of an extra 71 residents referred from Christchurch after the earthquake.
Mr Dickson said the additional cost had been offset by $186,000 from the Canterbury board.
For the first nine months of the year, rest-home spending was $3.18 million over budget.
The board's spending on disability support services was $900,000 over budget for the year.
But while rest-home costs were up, home support spending was under budget by $1.2 million for the year to date.
Mr Dickson said factors contributing to the favourable results for March included $1.8 million in funding for upgrading the linear accelerators' software, $800,000 extra revenue and $500,000 lower spending on infrastructure and non-clinical supplies.
It has also gained $600,000 as a result of doing more work than expected for other district health boards, and having to pay for fewer operations carried out by other boards for Southern patients.
Spending on community medicines was down $100,000 in March and spending on medicine was expected to be $1 million lower than earlier estimated by the end of the year.
