Board members, including Mr Thomson, had been given until 5pm on Thursday to respond, but - at the board's request - Mr Ryall has now extended this to 5pm next Monday.
In a follow-up letter to Mr Thomson, who had sought more information about the basis on which Mr Ryall wished to dismiss him, the minister expresses serious concern about the adequacy of the board's audit and risk and fraud awareness systems between 2001 and 2006.
Mr Thomson has been under threat of dismissal after he refused to resign last week.
Mr Ryall responded to his refusal by consulting board members and Mr Thomson, as required under the New Zealand Public Health and Disability Act, saying he was considering removing Mr Thomson from the office of chairman over the fraud.
Mr Thomson then sought more detail on the basis for Mr Ryall's concerns.
Mr Thomson said the board's anti-fraud and audit measures in place between 2001 and 2006 would not have been fundamentally different from other boards.
Board deputy chairwoman Susie Johnstone said the board would discuss Mr Ryall's letter in closed session at its first meeting for the year this Thursday.
Board members had been communicating about the issue over the weekend and there was much support for Mr Thomson's leadership, she said.
In other developments yesterday, two health leaders expressed concern that the aftermath of the fraud will see big spending by boards constantly checking health workers' honesty.
Dunedin Hospital consultant surgeon and clinical leader in intensive care Mike Hunter, in a letter supporting Mr Thomson, said destruction of trust might be the worst legacy of the fraud.
Mr Hunter said boards would be forced to spend more and more health dollars on checking and no-one would be trusted again.
"Everyone will be spied on behind their backs, and this will, of course, take a small army of bureaucrats, accountants and auditors.
"And what an irony this will be, with National's pre-election promises of cutting bureaucracy and getting health dollars back to the 'coal-face" being shouted the loudest by none other than Tony Ryall."
New Zealand Nurses Organisation industrial adviser and Otago Council of Trades Union convener Glenda Alexander said she was worried some of the processes to prevent future fraud seemed a " little bit over the top".
It was sad to see that all employees would come under suspicion because one employee had carried out a major fraud.
She was concerned that money would be spent on introducing elaborate processes when boards could tighten up their basic existing procedures such as checking referees when people applied for jobs.
Some claims rejected
•The Office of the Auditor-general has rejected some claims made by the Otago District Health Board in its briefing paper to Health Minister Tony Ryall on the $16.9 million fraud which were reported in Saturday's Otago Daily Times.
Late yesterday afternoon, the office issued a statement saying a number of comments in the briefing paper about the external auditors [Audit New Zealand] and [auditor] Bruce Robertson were "not correct and are potentially harmful to the reputation of the office and individual auditors".
"We are communicating directly with the board to ensure that it has an accurate understanding of Audit New Zealand's work and that it does not make any further factually inaccurate public comments."
Audit NZ was rung by the ODT on Friday and a message left on Mr Robertson's phone seeking comment for publication on the briefing paper.
