District Health Boards considered a vote of no confidence in senior leadership at the Ministry of Health over a $38 million blunder in the sector's funding.
The matter was raised in Parliament today and an urgent debate was held about it.
Last week it was revealed $38 million from the Budget was incorrectly allocated to District Health Boards, and Minister of Health Jonathan Coleman blamed officials.
Some DHBs were asked to return money to the ministry.
Yet several DHB heads have told RNZ that at the beginning of the month the Director General of Health, Chai Chuah, and the Director of Critical Projects, Michael Hundleby, rang them to say they could keep the money.
It's also been confirmed that a series of meetings were held in Wellington on 15 June, where the chairs and chief executives discussed their lack of confidence in Mr Chuah and his senior leadership team.
Labour Party health spokesperson David Clark has told Parliament Mr Chuah initially told DHBs they could keep the extra money, before demanding it back.
Minister of Health Jonathan Coleman has blamed ministry officials, but said he still has confidence in the Director General.
For most DHBs the error was worth between $1 million - $2 million, with 14 getting more than they should, and six getting less.
Dr Clark said Mr Coleman was a minister who did not care about his sector.
"It's a story of a ministry that is demoralised and struggling with senior leadership issues and it is a story about a sector that is growing incredibly frustrated as their efforts to provide health care to New Zealanders who deserve it, are frustrated time and time and time again."