New figures show the Health Service Executive deficit was €281m at the end of July, against an overall budget of over €16 billion.
The HSE told the Oireachtas Health Committee that the factors driving the latest deficit include providing specialist emergency care in acute hospitals, demand-led services, the growing population of older and frailer patients and other issues.
The comparable deficit figure for the same period last year was much higher at €485m.
Chief Executive Paul Reid said the HSE is showing a much strengthened financial performance this year.
In August, Mr Reid said he was determined that the service would stay within budget.
He has now told senior health managers to identify and put in place extra measures to limit, as much as possible, overruns within services.
This will include measures to limit spending on agency staff, overtime and staffing levels.
Meanwhile, Mr Reid told the committee that a number of cost claims have been lodged by the contractor at the new National Children's Hospital. But he said that nothing submitted so far has been accepted.
Minister for Health Simon Harris said that he has not been advised of any new cost issues, or a change in the timeline for the delivery of the project.
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Separately, the HSE is expected to submit a draft winter plan to the Department of Health in a few weeks to deal with emergency department overcrowding.
HSE analysis has shown significant levels of growth in emergency department attendance and admissions over the past winter seasons, outstripping population growth it says by over 2.75%.
As part of this year's winter plan, the influenza vaccination campaign will also be launched shortly.
For the first time, following a recommendation from the National Immunisation Advisory Committee, a quadrivalent influenza vaccine (covering four strains) will be used instead of the standard trivalent (three strains) vaccine.
Health officials say that the provision of a quadrivalent vaccine will offer a substantially greater level of protection to the population, when compared to the trivalent vaccine provided in recent years.
The seasonal influenza vaccination is recommended for people aged 65 years and older, health care workers and people in at-risk groups.