The Health Minister has given a warning to the Hepatitis Foundation after an investigation found evidence of gross mismanagement and extravagant spending.
The government provides $1.5 million to the charity each year to help people with the disease.
The Foundation's board chair spent more than 128-thousand on travel over two years and the foundation splashed out on credit card expenses and lavish dinners at top restaurants.
After a Charities Services inquiry, the Ministry of Health did its own audit and discovered the foundation had a surplus of $380,000 left over from its taxpayer funding which it had been putting into a property trust.
There was no requirement for the foundation to give the money back, but that policy has now been changed.
David Clark says the behaviour was unacceptable.
Mr Clark says it's up to the Health Ministry, which supervises the Foundation, to say whether the Board Chair should stay in the role.
He says he's not worried about the year long delay before the report was published.
In a statement provided to RNZ the Ministry of Health says it will be formally writing to the Hepatitis Foundation to both express directly its concern and disappointment