The DHB's year-to-date operating deficit had already reached $900,000 and, if expenditure continued at that rate, the full-year operational deficit at the end of the financial year in June could be $8.6 million, the board heard at its monthly meeting in Queenstown on Thursday.
At the meeting, board members, led by Mr Butterfield, questioned management overspending in February.
It was the second month of overspending.
In January, the board had a medical wages spending "blowout" which prompted Mr Butterfield to tell staff he did not want a repeat.
He said on Thursday that until recently there had been "no indication" the January financial blowout was going to continue".
"Where's the forecasting? Where's the control and why did we not know earlier?
"Why has it happened if there were controls? If there were controls in place, it wouldn't have happened.
"Is this a result of gross mismanagement or is there some other explanation and will it right itself next month?"
Staff did not respond to his comments.
However, board member Tahu Potiki said there had been controls in place and the decisions made had been "conscious decisions".
An end of year deficit of $8.6 million would still be almost $2 million better than the board's "worst-case scenario" of $10.5 million, but about $2 million more than the deficit of $6.7 million the board had been aiming for.
The bulk of the February spending had come from medical outsourcing ($2.1 million), full-time equivalent positions and clinical supply costs ($1 million).
Board member Branko Sijnja was concerned spending was being controlled by the full-time equivalent workers, such as on-call and fill-in doctors.
"We are at the mercy of the locums."
The medical salary division was the largest unfavourable variance for the board's provider arm - SDHB-run services such as hospitals - at $2.4 million, costs shared by overtime and leave variations.
The majority of the $2 million unfavourable variance came from the Dunedin and Otago sites.
