The HSE is reviewing all “insourcing” activity after €2m worth of contracts were awarded to firms connected to health service staff without open competition, writes Sarah McGovern.
Just over €1.5m of this sum went to businesses linked to two staff members at University Hospital Limerick (UHL), with auditors raising concerns over value for money.
Public Expenditure Minister and Fianna Fáil deputy leader Jack Chambers told the Dáil yesterday that the health service has paused any projects whereby existing staff are being “hired or paid by a separate entity to work on initiatives in their own place or type of work”.
“Tender processes were not appropriately followed,” Mr Chambers said.
“The CEO of the HSE [Bernard Gloster] has instigated a review of insourcing across the HSE, not just because of the above audit but also due to broader concerns about how it operates and value-for-money considerations.”
It comes after an internal HSE audit, completed in June 2024 and recently released to Aontú leader Peadar Tóibín, found UHL consultants “set up private companies and referred patients to their own companies”.
The review was ordered to examine outsourcing practices in three Irish hospitals: UHL, Galway University Hospital (GUH) and Tallaght University Hospital (TUH).
It found that €14.2m was paid out to third-party providers by UHL in 2023 without open competition under a Government initiative to reduce waiting lists.
Of this sum, €1,633,972 was awarded to two separate companies which were owned or part-owned by HSE employees.
A further €391,142 was awarded to a third company which listed a member of HSE staff as a director.
While auditors found “no evidence” of the employees in question being involved in the awarding of the contracts, they did receive confirmation from UHL management that the hospital had “no dedicated procurement function”.
“Awarding contracts without competitive tendering increases the risk of undisclosed or unmanaged conflicts of interest and reputational risk regarding the integrity of the process,” the auditors stated.
The review raised concerns that contracting existing staff could have legal ramifications and result in higher costs than if the hospital paid the staff directly through overtime, meaning “value for money is not achieved”.
Mr Tóibín described the report’s findings as “shocking”.
The TD said the audit “corroborates” allegations brought to his attention that consultants “are creating their own private companies and diverting patients from public waiting lists to their newly created private companies”.
“That report states that the Government was getting a handle on it, but we are actually hearing of this happening in real time at the moment,” he said.
Mr Chambers said the audit findings are “very serious and need to be properly and thoroughly followed through by the HSE”.
“The HSE’s CEO, Bernard Gloster, I understand, has, at the request of the Minister for Health [Jennifer Carroll MacNeill], initiated a detailed survey of all sourcing activity in the HSE,” the minister told the Dáil.
Mr Gloster has also issued an instruction that “all insourcing where existing staff are hired, engaged or paid by a separate entity to work on initiatives in their own place type of work must now be paused”.
Mr Chambers said: “Having been made aware of this issue, it is serious and if appropriate procedures have not been followed, there has to be full follow-through from the HSE.
“All dimensions of the respective financial frameworks should be followed by anyone working in the HSE regarding sourcing and outsourcing.”
The audit found that while staff providing “insourcing” services “are not acting as HSE employees”, they are still allowed to use “HSE facilities, medical equipment, their staff system access, and log-ins”.
The auditors found that this situation “could have revenue and legal implications for the HSE”.
