The Office of the Auditor-General says the Ministry of Health is improving in its management of Christchurch's hospital rebuild.
The office heavily criticised the ministry's involvement in the $450 million acute services project late last year.
It said serious leadership flaws were creating a tense and unpleasant environment and it was threatening to delay the project's completion beyond 2018.
A senior performance auditor, Kate Williams, told Parliament's finance and expenditure committee the Ministry has put an action plan in place.
She said they had to make it clear what everyone's role in the project was.