Health Minister Dr Shane Reti says Health New Zealand missed warning signs ahead of its gaping deficits

The agency went from an expected half-a-billion dollar surplus to a 1.4 billion dollar deficit in April - now expected to blow out to 1.76 billion dollars.

Reti says the board lacked monitoring procedures to see what was going on.

He says no one was measuring the costs of increasing nursing recruitment against the budget.

He says the board had first visibility on the finances and responsibilities to report the issues to him and Treasury .