A Health Ministry investigation into the high level of cash reserves held by primary health organisations (PHOs) would be welcomed by most of those organisations, a representative says.

It was reported yesterday that about $115 million of public money was being held by PHOs in either cash or investments.

The money is supposed to be spent by health clinics on public health programmes with a non-profit intent, and Health Minister Tony Ryall said the issue needed to be investigated.

PHOs have defended their operations, saying funding is provided up front and there is a lag before projects are ticked off by the district health boards (DHBs) which provide the funding in the first place and oversee health programmes.

PHO Alliance chairman Hamish Kynoch said , for example, some of the money provided for community health services needed to be directed to Maori and Pacific patients and to people in poorer areas.

"Those services are not always easy to design and to deliver effectively," he told Radio New Zealand.

He said it was not always easy to get DHB sign-off for some programmes which PHOs would like to initiate, and they sometimes had to contract for services over a period of one to two years.

Mr Kynoch said money held in reserve was always earmarked for health services already in place.

PHOs did not have an ability to borrow or go into debt, and most had contracts for expenditure which were only slightly less than the cash reserves held.

"The money will always be spent directly on health. I think the ministry and the minister would be much more worried if PHOs had large debts."

Mr Kynoch said PHOs would welcome moves which enabled them to use their funds to provide more and better primary health care.