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A new report says the implementation of an electronic records system by Vancouver Island's health authority has been mismanaged and is now more than $54 million over budget.

The province has released the results of an audit of Island Health's IHealth system done by Ernst & Young, which found the project was not properly planned or implemented.

The government says in a release that Island Health will not be able to fully complete the project within the initial $173.5 million budget and health officials estimate an additional $54.1 million will be required, though Ernst & Young believes more will be needed.

IHealth was introduced after the health authority decided in 2012 to expand its electronic health record system, but concerns about the system were raised after it was implemented at the Nanaimo Regional General Hospital.

The province says in a release that the audit found a "general climate of distrust" at the hospital played a part in the problems and the system was implemented despite the facility not being fully prepared.

Island Health President and CEO Kathy MacNeil says in a statement that the health authority agrees with the audit's findings.

It's clear that the system is not at the stage it should be and that Island Health has not lived up to its commitments, MacNeil said.

"There is no one person responsible, this is about the health authority as a whole," she said in a news release. "It simply wasn't good enough. We must do better — and we will do better — and we will do that by working together with our staff, physicians and other key partners."