The Hawke's Bay District Health Board is looking to break even by June next year after a deficit of almost $7 million two years ago.
In February 2008, the then Health Minister David Cunliffe sacked board members, due to a deteriorating financial performance and a dysfunctional relationship with management.
Chief executive Kevin Snee says there has been a substantial improvement in financial performance since, and the surplus since July is $1 million better than expected.
Dr Snee says it is the result of hard work by staff and moves to tighten financial control and improve efficiency.
Savings in administration and management have also contributed to the financial turnaround, but there is no room for complacency, he says.