A task force sent to resolve problems at Western Isles Health Board found its spending plans had been running at £4.5m more than the authority's income.
The running of health services is being overseen by a task force
Cuts have been made by the Scottish Executive-appointed team to bring outgoings under control.
Further constraints include a freeze on vacancies and reducing the number of staff allowed to place orders from 52 to six.
Malcolm Wright, interim chief executive, said work was continuing.
He said: "What we have done since we have come in is really look at all of the budgets on a line-by-line basis and it became apparent that there was actually more money sitting in budgets than there was income to cover it.
"We have done a very full analysis of that position and, yes, it did transpire that some £4.5m was put into people's budgets that there wasn't income to cover - that's quite a serious issue."
Mr Wright said discussions have been held with budget holders and spending plans pulled back to match the income coming into the organisation.
He added: "Budget holders know the financial targets that they need to hit and we are working very, very closely and intensively with budget holders to make sure that happens."